The Twin Cities Metro area new home communities are more popular than ever! With good reason-new home builders are using popular, open floor-plans; including appliances, sod and blinds, and helping make it easier than ever to get into a new home with little or no money down.  New home transactions typically seem a lot easier, as well.  If a Buyer chose to, they could get through a new home transaction without contacting anyone except the on-site-sales agent! However, this would open you up to HUGE losses. Take these simple steps to protect yourself in a new home transaction, and to ensure that yours is a success.

Top 10 Tips for Buying and Building New Construction Homes-

1.) Hire an Agent who Has New Home Sales Experience-When you hire a Realtor to represent you when Buying a new home, the commission is paid by the homebuilder. Your Realtor will use their knowledge and experience to assist you in floor plan selections, upgrades, mortgage pitfalls, basic do's and don't, all legal documents, construction and closing process of your new home. Many people think that they can save money by not using, or don't need the services of a Realtor when buying a new construction home. This couldn't be further from the truth! New homebuilders typically try to monopolize a transaction-they only give you their attractive incentive packages if you agree, in writing, to use their lender, their title company, and sometimes even their insurance company! A Realtor will walk you through the transaction and will make sure that you're protected every step of the way. If you've agreed to use the builder's lender, your Realtor will make sure that you get a fair interest rate & fair closing costs.  Your Realtor will know what the industry standards are, and will make sure that the builder doesn't try and stretch beyond these. And best of all, a Realtor with new home sales experience will have established relationships with your homebuilder.  Because of this, the homebuilder will be on their "best behavior." The homebuilder doesn't want to run the risk of getting a bad reputation in the Realtor community, who can potentially bring lots of homebuyers in the future.

2.) Plan Your Timeframe-One of the biggest complaints you hear from customers  about their builder is, "it took 3 times as long to build the house as he said it would." Factors to think about are inspections and permits that get delayed, labor shortages, back-ordered building products, and severe weather conditions-a smart, responsible home builder will factor these elements into his/her building timeframe.

3.) Research Cities-Simply ask your Realtor and he/she will be able to provide you with lots of information about city plans that have been approved, and city plans that are still being talked about. These factors will dictate whether your new neighborhood will become the next "big thing" or the next "cheap thing".

4.) Research the Builder-Most builders are "good" builders. They take simple steps to protect their neighborhoods. Research your builder with your local Builders Association, or ask your Realtor if your builder takes these simple steps to make sure that your neighborhood won't instantly go down in value: A.) Limit the number of investor purchases-this makes sure that the neighborhood doesn't turn into a "rental" neighborhood and allows the "pride of ownership" to shine through. B.) Continues to build equal or greater value homes in the same and surrounding neighborhoods. Builders who avoid this create a "vacuum" in home prices and instantly devalue new home purchases.

5.) Don't Agree to Use Their Lender- Builders will offer HUGE incentives to get you into your new home, sometimes up to 15% of the value of the home. However, they will typically put one BIG stipulation on those incentives-that you use their lender.  There are many problems that will come up when you pigeon-hole yourself to one lender-higher rates and higher closing costs are the two biggest. The on-site sales associates will typically tell you that their hands are tied, you have to use their lender to get the incentives.

6.) Choose Your Appraiser-You're going to pay for an appraisal one way or another! The lender will require that you have an appraisal in order to loan you the money for the home. Additionally, most appraisers charge about the same money for the service-so why not choose your appraiser or one that your Realtor has experience working with? Ask for a copy of the appraisal and read it. Call your appraiser if you have any questions. This will give you an indepth knowledge of the market area-and it's something you would pay for, regardless!

7.) Title Companies-Make sure you get a lien waiver and title insurance.

8.) Don't Sign ANYTHING Until You've Worked Out Every Detail of the Sale-Buying a home can be very emotional-and it should be. You're not simply picking out a house; you're picking out where you'll spend holiday's next year, where your parents will come visit you, and where you might raise your children. However, the on-site sales agent will try and play on this emotion and get you to "write up a contract so that no one else can get your house." That's just fine, as long as you understand that you're signing, and everything is okay with you.  Just remember-no matter what is said, everything will be done as it is outlined in the contract.

9.) Be Extremely Clear About Potential Extras! A.) If this is a contract home, is the builder responsible for excess fill requirements to properly backfill and grade the lot, or are you? B.) If a private septic system is required, are you responsible for any overage if it's a more expensive system than the builder planned on? Septic systems can range $4,000 to $30,000 depending on the water table and soil. C.) Are all permits, connection fees and impact fees included? D.) Is the landscaping allowance truly sufficient to be as breathtaking as the model home you looked at? Be sure to get a good idea of what the allowance can be expected to cover. $5,000 in landscaping may sound like a lot to some of you, but it might do less than you think. E.) If a home is being considered a "sales model" under the premise that this is what they could build for you on a "contract" basis-just pay attention to what's "standard" or "spec" for what's being quoted to you-just because the model has air-conditioning, don't get upset that it may not be a standard feature-expect there to be a few "extras" on your price list-there always are...period. 

10.) Get A Home Inspection And Warranty!!

Before you make the decision to Buy, Build or Remodel let the experienced team of Constance Koopman and Sue Marshall work with you from start to finish. Our mission is to build life long relationships with our client's one at a time. Starting with you.

We will work with you to find the builder or remodeler best suited for your budget and home floorplan. For more information and research on finding a home builder or remodeler in your area visit the Builders Association of the Twin Cities website at: www.paradeofhomes.org.

Happy Building and Remodeling!

Constance KOOPMAN, Realtor

SFR, CSP

612-490-3861

Sue MARSHALL, Realtor, Broker

MIRM

612-701-HOME