Buying a Home Online
Home shopping is not something most people do every day. It can be a confusing, overwhelming experience especially in a hot market like the Triangle. New home construction can get even trickier because there’s more factors that aren’t there in resale homes, like the timing of construction and meetings with the builder. I am a New Home Sales Consultant for M/I Homes, a national builder, so it’s a world I live in daily.
When you’re comfortable and equipped with information, you can make much better choices. My goal here is to take some of the confusion and stress out of new home shopping. I have compiled this list based on my interactions with hundreds of customers. Eight questions to ask and five things to consider before walking into the model home that will put you steps ahead. I promise: new home shopping will be fun!
Questions to Ask
What Is the Builder’s Construction Like?
I’m talking about both style and quality. Of course, we all want a structurally sound home. When you walk through the model or finished available home, does it look like corners were cut in construction? Home construction is a messy process, but the finished result should be a beautiful, safe home. These homes are built by humans, so it won’t necessarily be perfect, but make sure you’re comfortable with the quality. You can get a feeling for the builder’s style by the design options and floorplan characteristics.
What Are the Included Features?
Typically, each neighborhood will have its own set of included features. These are the items that the builder includes at the base price, and “higher” options would be done at an additional cost. This is helpful to be on the same page about what you can expect and what you’ll need to add based on your needs and preferences. Things like granite countertops, hardwood flooring, and screened porches are common items that may or may not be included depending on the community.
What Are the Warranties Like?
There may be warranties from both the builder and various manufacturers. For the manufacturer warranties, you’ll likely need to register the item with the company for it to be covered, so make sure you have the information you need at closing and are clear.
Is There Post-Closing Customer Care? If So, What’s Covered?
Builder warranties tend to fall into this post closing care category. The sales consultant is your point of contact during the building process. Post closing there may be a designated customer care team. In an emergency you don’t want to be fumbling to figure out the right contact person, so it’s helpful to know who to go to for what ahead of time. Knowing what is covered by the builder’s customer care team will also give you peace of mind and correct action steps should something happen.
Are There Preferred Affiliate Partners? If So, What Is the Incentive to Use Them?
Builders may have an in-house or preferred lender. They may also have a preferred attorney or other affiliate partners to help with the home purchasing process. Usually there are incentives tied to using these partners that you wouldn’t be able to take advantage of otherwise. It should be your choice to use the professional you want, but understand you may not receive the particular incentive (such as $xx of paid closing costs with use of the preferred lender).
What Will Be Built in the Future?
This is an especially important question with a brand new neighborhood where construction is just getting started. What amenities will be built for the residents? If there’s open land nearby: who owns it? Are there plans for it? Is there a buffer that would remain even if the land use changed? Public information should be disclosed to the best of the builder’s knowledge.
What Is Expected of Me As a Customer?
Unlike a resale home, there are choices to be made throughout the home building process. Even when you are purchasing a quick move-in home, you don’t just sign a contract and wait for your closing date. There may be meetings with the builder, meetings with the New Home Consultant to finalize structural selections, and meetings with the Design Gallery to make design selection. Different builders may have different expectations about visits to your home during the process, so find out more about that. You can do inspections at your own cost, but be sure to coordinate with your builder team to ensure the home is ready for the specific inspection.
Are There Other Savings I’m Not Currently Taking Advantage Of?
The answer to this question should ideally be “no” because you’ve spent time working with the Internet Sales Manager and New Home Consultant and understand fully the costs and savings, but I still think it’s a good question to ask. Sometimes things may get overlooked in the moment, plus promotions change. There may be special incentives for teachers/first responders/military personnel, repeat homebuyers with the builder, or for specific home items like a basement.
Things to Consider
Clarity on Your Must-Haves
You may change your mind throughout the search process and that’s okay. But it’s extremely helpful to have clarity on your must haves. Clarity should be between the decision makers whether that’s just you or you and another person. This will make the entire process smoother and easier because it will help weed out things you don’t want/things that aren’t important to you. Consider how you want to live in your home. Do you like an open concept? Do you want a loft space or bonus room? Do you want your owner’s bedroom on the first floor? Do you need a flat backyard for gardening or the kids' play set? Must-haves are different for every person, but taking some time to think them through will greatly help. Maybe watch HGTV or scroll through Pinterest for inspiration. Talk to your friends and family about what they love or wish they could change in their home, but take it with a grain of salt. As I just said, each person is different, but the conversations may shine a new light.
Timeline
If you need to move immediately, you probably will be looking for a quick move-in (inventory) home. This is a home that is currently in progress or even finished and all selections have been made by the builder. If you have flexibility in your timing and/or are very particular about the selections being made, building from the ground up (presale) would be a good route. Timing isn’t always perfect, so this may mean renting for a bit while your home is being finished or extending a lease. It’s worth it though!
Down Payment Amount
Don’t forget about the money you’re saving while all the excitement is happening! It’s ideal to put at least 20% down so you can avoid PMI (private mortgage insurance). This is insurance for the bank and is paid until you have 20% equity in your home. I know that’s not reasonable for everyone, especially if this is your first home (we put 0% down on our home, so I totally get it). There are different types of loans that will require different down payment amounts – your lender can help find the best fit. With most builders, there is a builder deposit due to secure your home/homesite, and then your remaining down payment and closing costs will be due prior to closing. Your lender will confirm these details.
Buying Power
Consider your down payment goal, income, and any other savings you may have. Together with those numbers, consider the amount of monthly payment you can afford/want to make. A lender will be able to help with specifics for this, but there are many tools online to get rough estimates so you have a better idea of how much house you’re shopping for. Monthly home expense is made up of: Principal, Interest, Taxes, Insurance, HOA (if there is one).
Using a REALTOR®
Customers don’t always realize that the New Home Consultant represents the seller, aka the builder. This means that ultimately their loyalty is with the builder, but they still owe you honesty, fairness, and disclosure. Many people find it helpful to have a trusted real estate agent representing them on the buyer side of the transaction. There are people that purchase a new home without an agent and people that purchase with an agent. Do whatever makes you feel most comfortable.
You may think of many other questions aside from these. Don’t ever hesitate to ask! A home is the biggest purchase most people will make. Ask all your questions, even if they seem silly (I promise, they’re not). You will learn a lot and actually enjoy the process when you feel comfortable and educated.
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