Purchasing a New Build: What Your Realtor Wants You to Know
Rick Coyne
In the last year, we have arrived at what Realtors call a “low inventory” market and what experts call a housing crisis. In lamen’s terms, this means that there are not enough houses available for the number of qualified buyers out there looking. This fact has many buyers looking to build rather than buy, however, the process for purchasing a new build is quite different from your average real estate transaction.
If you’re thinking about this path to homeownership we’re sure you have questions galore. So we asked veteran EXIT Realtor Jason Vennard, “What are three things you wish your clients knew when buying a new build?” His answers did not disappoint.
- Every builder and every process is different; from the type of financing that is needed, to the type of contract they use, their specs, the time to build, and their view on change-orders. EVERYTHING IS DIFFERENT FROM BUILDER TO BUILDER!
Our advice: Be sure to ask a prospective builder about their process. They should be able to provide any policies and procedures in writing. Then when choosing a builder be sure to take the difference in these policies into account.
- With the fluctuating cost of materials, some builders are using addenda to protect themselves from increasing costs. That means that you could agree on a cost to build, but the builder reserves the right to increase that cost if the builder's material cost rises beyond a certain amount. Normally the buyer also reserves the right to walk away without penalty in this scenario as well.
Our advice: Consider a build under what you are approved for to accommodate any price fluctuation or hold off on any upgrades until after you’ve moved in or you know your final cost.
- In Maine, contractors are not required to be licensed in any way. Make sure you hire a reputable builder with a strong portfolio and good references.
Our advice: Ask around for builder recommendations and do your own research. When meeting with a builder don’t be hesitant to ask to see examples of their work and for references. Anyone reputable will have this information readily available.
The prospect of building a new home is both exhilarating and frightening. The financial, legal, and practical choices can quickly become overwhelming. If you’re embarking on the purchase of a new build don’t try and go it alone. Hire a competent EXIT Realtor to guide you every step of the way.
