Checklist for Buying a New Construction Home

Below you will find a list of important considerations to be mindful of when considering new construction investment or preconstruction investment. Please feel free to contact us by calling or filling out the form below for more information and advice about real estate investment.

For more information on your investment real estate in your area, please fill out the information below and an agent or expert will contact you shortly. We Value Your Privacy. Read Our Privacy Policy
Email:
Name:
Phone Number:
Price Range:	Less Than 100k 100k - 300k 300k - 600k 600k And Up
Specific Location:
Additional Comments or Questions:

New Construction Checklist

• Get a real estate agent, someone impartial and professional who does not act as a salesperson for the developer.
  
  
• Ask for the price of the model before any upgrades.  Usually the cost of the unit as is will be drastically different from the developer’s asking price after the structure is completed.  Make sure you have all the information about the real value of the home.
  
  
• Research the developer.  Just as when you do business with anyone else, make sure that the developer is reliable.  Ask for references and previous projects to avoid shady practices and developers who don’t finish projects.
  
  
• Find out how much is the project has actually been sold.  Developers tend to exaggerate the appeal of their projects by labeling all potential investors—even those who have informal reservations rather than hard, binding contracts—as having actually purchased a unit.
  
  
• Get an attorney to review the contracts.  Developers are weary of investor resale practices and put clauses prohibiting this activity in their contracts that can often be one-sided deals in their favor.  Have an attorney assure that the agreement is fair to both sides.
  
  
• Research property taxes.  Quite often developers will underestimate the expenses of property taxes as tax assessors do not appraise blueprints.  Contact your local taxing authority for a more accurate estimate and a worst-case scenario.
  
  
• Inspect the home.  Although the property is brand new, there is always the possibility of defects and poor craftsmanship.  Go through the property with a professional at least a week before closing.
  
  
• Ask about the owner occupancy rate.  Often nowadays developers restrict flipping property by contract or demand that they occupy the property for at least a year after closing.
  
  
• Obtain a certificate of occupancy.  Necessary for the acquisition of a mortgage loan, the certificate of occupancy is issued after a property has passed all the local building inspections.
  
  
• Know why developers charge in advance for upgrades.  Some buyers will purchase a unit only with the developer-offered upgrades while others request their own personalized finished.  The latter action can pose a problem for developers if said buyer terminated his contract and he will probably not be refunded.
  
  
  
• Require an escrow account for your payments to make sure they are in neutral hands.  Therefore, if there are any problems with the real estate transaction, it will be easier to get a refund from a third party than the biased developer.
  
  
• Ask for blueprints, surveys, and floor plans just in case you decide to sell your property.  Also, see that your home has a parcel identification number from the taxing authorities.
  
  
• Get information on warranties.  Usually developers offer five to ten year warranties on structure and the manufacturers of each finishing and appliance that come with the home supply varied warranties on their products.  Avoid extremely short warranties, such as those for only one year.
  
  
• Ask about unfinished work.  If any substantial items are incomplete, have funds designated for their completion.
  
  
• Stay alert of all the progress during the construction process to catch any design mistakes that may not be noticeable.
  
  
• Be weary of low assessments.  Sometimes the developer with underestimate monthly homeowner assessments, so count on at least a 25% increase in the first year.
  
  
• Make a clear distinction between upgraded and standard features.  Quite often it is worth the extra costs to upgrade to higher quality features that last longer.
  
  
• Understand why developers offer incentives.  Those extra “free” features are usually not bonuses but are signals that the development is slow to sell and the developer is getting desperate.
  
  
• Know the risks of preconstruction investing.  Make sure that the developer is reputable and has gotten all the rights to start the project.  Buying a home before it is anything more than blueprints is risky, so verify the developer’s credentials to assure that the home will be completed.

Browse Our Site for More Information on New Construction Homes:

• Purchase New Homes
• New Construction Property
• New Construction Homes
• New Homes for Sale
• Buy a New Construction Home
• Information on New Construction Investment
• New Home Investment Information
• Invest in New Construction Property

 

Like this page? Email it to a friend.
	Your Name: Your Email: Friend's Name: Friend's Email: The information obtained in this form will only be used to notify the recipient of sender's identity.