There’s no better feeling than moving into a new home. Buying a new build home is very exciting! The moment you walk into that home, the open floor plan with a big master bedroom and huge walk-in closet, you’re going to fall in love. New construction hits on everything today’s buyer wants. But it’s important to ask the right questions before getting TOO excited.
That’s exactly what we’re talking about today. What are some of the most important questions to ask new construction home builders in Northern Colorado?
What inventory do you have?
Today’s builders are doing things a little differently than normal. Across the country, across builders and across cities, builders could be operating completely differently than one another. Many new construction builders would historically let you pick the lot, pick the elevations, structural upgrades and go through the design room. Today, due to lack of supply and labor, many builders are “spec’ing” out homes. They are carrying inventory and selling the home closer to when the home is complete and their COSTS are known.
So going into a sales office of a builder at a development, one of the first questions you are going to want to ask is what inventory do you have and ask to see an inventory sheet.
What phase of the development are you in and how many phases will there be?
Most new developments have around three to four phases. If you’re in the first phase, you’re probably going to be in the construction zone for the next 2 to 3 years. But if you’re in the last phase, you can expect everything to be done in the next six months to a year. You won’t get to enjoy AS MUCH appreciation as those that were in phase 1 and 2, but you will NOT be in a construction zone very long. So, make sure you ask your builders about the number of phases.
What are the builder/lender incentives?
Make sure you also ask about the builder/lender incentives. These could be paid HOA expenses, free upgrades, free AC, or thousands of dollars in design center options or closing costs, etc. The next step would be to go to your original lender to see if they can match or beat the builder/lender incentives. When a builder and lender team up, the lender has economies of scale and can offer incentives to their clients. It is a nice perk!
What is the earnest money?
When you are buying existing build homes in Colorado, your earnest money is very protected. Pretty much for any reason, you can get your earnest money refunded if you object to the home that is under contract.
With new constructions, you can generally get the earnest money refunded in the first seven days for any reason. Otherwise you typically have 30 days from going under contract to get approved by the lender. If you do not get approved you can get the earnest money refunded.
After that time frame, it’s pretty much an egregious act from the builder that will allow that earnest money to be refundable. Otherwise, you can say goodbye to that earnest money.
What is the build time frame?
Ask them what you can expect in terms of build time frame, permits, breaking ground the expected timeline, etc. Houses in today’s market are taking longer to build and the builders are for lack of a better word overconfident on their abilities to deliver a home on time. Make sure to give yourself room on the back end for delays.
Other questions to ask home builders
Here are other important questions to ask your new builders.
- What supply shortages are they seeing and how are they combating those?
- If those supply shortages impact the housing price, is there an escalation clause in the contract?
- What standard features does the homes include?
- From the base price, what do you see typically as an increase to the final price?
- Are there any additional fees to pay while under contract? Design Center percentages due to the builder?
- Home warranties? 1/2/10? Craftsmanship/Major Systems/Foundation
- What meetings are there? Home Introduction, Final Walkthrough, Pre Drywall?
- What is the final deadline to make ANY changes? Generally before drywall.
- Is this house a part of an HOA or a metro district? Can I see the CIC docs
- How big is the builder? Smaller builders carry larger risks because they can take your money and run (hopefully not). Or smaller builders could be amazing!
So there you have it! Those were the key questions to ask your new home builders. If you need any help, I would be happy to help.
If you have any questions, feel free to reach out to Soukup Real Estate Services! We’d be happy to help.
In the meantime, check the full video below:
