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Want to be the first on your block...period? The first to live in the brand-spanking new home of your dreams? And in a new development - a neighborhood-in-the-making - as well?
Buying into a subdivision is a larger-scale venture, of course, but it can offer the same exhilaration you feel driving off in a brand-new car. That is, as long as you take the time to plan your route carefully, from the first decision to buy, to that day some weeks away - when you can step over the threshold onto your very own territory.
In between lie some potentially bumpy terrain, a number of important decision, and myriad opportunities to tone up your skills at negotiating and diplomacy.
Buying a new house in a new subdivision is like commissioning a work of art-in-progress: you choose an artisan whose craftsmanship you admire...you watch as the artwork materializes...and you can suggest certain changes along the way.
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Research the Developer
Overall, however, it's still the artist - or in this case, the developer - who plays the key role in your ultimate satisfaction. Which is why everthing depends on selecting wisely in the first place.
Base your selection on personal research. Start by asking for names of people who have already moved into the development, or another neighborhood by the same developer. Call them, or knock on some doors, and ask the owners one important question, 'Do you love your house?' Their personal feelings for the builder are not important. What you care about is finding out the following: Are they getting good service? Is the warranty work getting done? Does the builder answer the phone? Do you have an emergency number?
For added peace of mind, you could add the sub-constractors to your list. Take a drive through the development, and get the names and numbers from the vehicles. A good question to ask these folks is 'Does the builder pay on time?' A happy sub-contractor usually means a good developer.
While you don't have to invite your developer over for Sunday dinner, there's plenty of reason to stay on friendly terms with him/her, once you're committed to the project. Not only during the construction phase, but after the closing. That's when you can expect problems to arise. Remember that the developer can be very personally involved with the project. So try to be positive about it, even though you could be involved in hard negotiations.
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Room for Negotiation
There is - and there isn't always - room for negotiations. Usually, the base price is not negotiable. To be fair to previous buyers, builders must keep the base price equal.
Your ability to negotiate changes in the floorplans usually depends on the price tag of the house. Remember that the developer has based prices on volume to control quality and contain costs. If you are buying a house in the price range between $80,000 and $350,000, changes may be hard to come by.
Wtih pricier homes, for example, between $350,000 and $500,000, developers may offer what the industry calls "Flex-Plans," allowing the buyer to make add-ons in predetermined areas. One builder compares it to buying a loaf of bread. You can't expect white bread to turn into raisin bread for the same money.
Therefore, you must know in advance exactly what you will be getting for your money. Find out by scrutinizing the development's model home. Just don't mistake the model for the standard version you will by bying. Take a notepad and make a checklist of all the features you like, then find out which come for the base price and which are options. Ask specific questions: "Are real cherry wood cabinets standard? Will I get hardwood floors?"
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Get A Builder's Contract
Your preliminary shopping should include a blank copy of the builders' contract, which should spell out construction details. More homework may be required on your part so you can interpret what you read. It may not be enough for things to be built 'to code'. For example, an important thing is the size of the joists - bigger is better. Ask for specifics. And understand the energy package that comes with the house.
Bigger is not always better when it comes to judging the quality of the construction you're buying. Don't equate price with square feet. It's the quality of the square feet that counts.
The contract should also indicate how many times you will be allowed to bring inspectors to the construction site. For safety reasons, mainly, builders don't want 'civilians' on site, but a minimum of three visits is desirable: (1) When the framing is up; (2) Before the walls are closed off; (3) When the house is finished. Also well worth considering: Bringing in your own inspectors with special areas of expertise: in landscaping, for example.
Many people are confused about a builder's responsibility to complete a home on time. When you buy the land and hire a custom builder, they may submit to a completion date penalty - but expect a lengthy clause that protects them against "forces beyond their control," such as weather and material shortages. However, builders in subdivisions will not guarantee completion dates. They are already carrying the mortgage on the land and are hiring sub-contractors. They simply will not assume the additional liability.
You will also want advance information on the builder's warranty. They vary widely and are only as vaulable as the builder is reliable. Large builders with national reputations can offer quite comprehensive warranties; for example, covering everything in the house for the first year, then structural and working components for a total of 10 years.
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Research Your Surroundings
Along with the sample contract, you should arm yourself with background information on the development itself - is there a homeowners' association and what are its covenants, requirements, and restrictions? It might prohibit parking on the street, painting your front door without approval, and other details of daily life you want to know about in advance. Get a copy of any association's credo so you've a clear picture of what your're buying into.
Ditto for local government. Call the town or county Planning and Zoning Board and find out what's in the works for the area. Maybe the nice woodsy view will be turned into the newest shopping complex. One way to avoid such a rude surpise: Buy where you're already surrounded by development.
The reverse tactive - being the first on your block - also makes sense, dollars and cents. Usually the first phase of a development is the least expensive. Once the builder continues into the next phases, prices go up.
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Wise Advice
- Get all agreements in writing. If the builder won't put it on paper, be very cautious.
- Lock your rates. It works to everyone's advantage because it's a long time between purchase and possession.
- Close early. You can get a better deal with fewer points. And you get the choice lot.
- Walk your lot with the builder, if you can, or with the construction super who knows what will actually happen. Ask specific questions, like 'Which trees will you have to take down?" "Will my dining room windows face into the garage next door?"
- Do any additional work now. If you want to add a deck or finish off the bonus room, have the builder do it now and roll the costs into your first, cheaper mortgage.
- Inquire about "allowances" on interior decorating. You may be able to upgrade carpeting or light fixtures at little extra cost. Or borrow the builder's catalogs and go showroom shopping at his wholesale prices.
Now it's your turn to be the lead artist on this work-in-progress....time to turn a 'production' house into a highly personal, warm and individualistic home that was made for you...literally...from the ground up.
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