There has been a lot of press lately about the extremely low inventory of housing across the country, but especially in & around Indy. We are at an all-time low of 3.9 months of inventory and, in some markets are as low as 1.3 months! 6-months is deemed to be a balanced market. As a result, many people are seriously considering building a new home. If you or someone you care about is considering building, here are some things to keep in mind before you first step into a model.
1. Have a clear understanding of how long the builder will take to complete the neighborhood…and then add 1-2 years to be safe. New neighborhoods are nice, but do have lots of construction equipment, noise, & traffic as a result. There will be very few, if any mature trees unless they were saved during initial development & vegetation will take time to mature.
2. Take time to research available lots & choose the best one available. Many people will try and save money on the lot premium, but spend it on upgraded spindles, trim, deck, appliances, etc. Your lot is the one thing you cannot ever change. Pay the premium for the best lot (cul-de-sac, lake, tree-line, nature persevere, etc.) and upgrade other features later, if you need to.
3. Be willing to take time to choose your structural & design center options carefully & stay involved in the building process. Building a new home takes much more time than existing, however you can get exactly what you want. From contract signing to final home delivery, it can take 6-12 months, depending on whether you are building production or custom. Be patient. Be willing to stick with the builder and visit your house during construction at least once/week. Visit the design center several times before making a final decision to ensure you are happy with your choices. Maintain an open communication channel with your builder and ensure you are receiving updates at least 1x/week.
4. New homes are closer to ‘perfect’ than existing, but there is no such thing as a ‘perfect home’. Most likely, your budget will not allow you to get everything you want. Know that is okay and very common. Choose wisely on your options. Know that your builder wants to exceed your expectations, but they are human and mistakes will occur. Good communication will go a long way-so will the occasional snacks & drinks brought to the job site! :-)
5. Pay for a 3-phase new construction independent inspection. Many people make the mistake of not hiring their own inspector who is familiar with the building process to ensure high quality. Builders have a quality control process & the municipalities have mandatory code inspections, but neither are a replacement for having your own independent inspection. Budget $800-$1,000 & make sure your builder knows of your intention to have one so he/she can make accommodations for your inspector.
6. Understand the structural & home warranties. Most builders purchase a 3rd party, 10-year structural home warranty for their clients. This is for structural issues only & the deductible can be $500 or more depending on the type of claim. Builders are required by law to provide a 1-year ‘bumper to bumper’ warranty on their homes, but some provide 2-year warranties. This includes anything mechanical as well as drywall cracks & nail pops. Ensure you schedule a 1-year walk-thru prior to expiration of your warranty to have your builder address any concerns & keep a list of those as they occur throughout the year so you don’t forget any. Many components of your house have their own warranties that last longer, such as furnace, roof, windows, water heater, appliances, etc.
7. Know the HERS (Home Energy Rating System) score. Every year, new technology & building practices improve & homes are more & more energy efficient. You can literally save hundreds of dollars each month in energy costs with a new home versus an older one. When deciding on new or existing, factor this into your budget as it can have a significant impact on your monthly expenses.
8. Take time to research floor plans you like & don’t like & visit builder models. Builder models are a treasure-trove of information. Take time to walk through several and note what you like and don’t like. New homes are designed & built to the needs of today’s consumer (think open floor plans, hearth rooms, outdoor living, etc.) and flow much better than many older homes. If you buy an older home, will you have to make any significant improvements out-of-pocket that you could get included by building new?
9. HGTV is not real! HGTV is great to watch and you can get a lot of good ideas, but it is sensationalized and fictionalized. You only see what the producer wants you to see. There is far more to the story that what you see. Please don’t set your expectations according to what you see on TV.
10. Professional representation does not cost you more. Having an experienced agent who is well-versed in building is a huge asset. They can help guide you through all of the above & assist in making wise decisions as well as take a lot of pressure & stress off your shoulders. Contrary to popular belief, builders do NOT charge less if a real estate agent is not involved. In fact, in many cases, agents can help you get a better deal than not having one involved. Real estate agents are involved in new home builds between 75-92% of the time, depending on the builder. Our fees come out of their marketing budget & have nothing to do with the price you pay for your new home. The best time to involve a real estate agent is at the very beginning of the process before you set foot in your first model home. Builders are very happy to work with experienced agents, but they need to know you are working with an agent at the very beginning of the process & it is best if they accompany you to the model for the first time. All builders have registration forms they will ask you to complete. Make sure you write the name of your agent on this form and your relationship with your agent will be protected. We have built our own homes as well as almost 100 production & custom homes for our clients over the years and have earned the Certified New Home Specialist designation (along with 10 other certifications & designations) held by the top 3% of agents specializing in new construction. We have saved our clients tens of thousands of dollars & countless headaches.
If you or someone you care about are even considering building, give us a call today so we can sit down and consult with you about your options and help you make a truly informed decision, including which area/neighborhood is best for you, which builder is the best fit, lot choices, upgrades/options, & an overview of the entire building process from beginning to end. We specialize in selling homes that are contingent on selling before your new home is built. This is one of the biggest concerns people have when deciding to build. Let us walk you through some solutions and see which one best fits your needs.
We are honored to have earned the Angie’s List Super Service Award for 2015 & are a 5-time recipient of the 5-Star Real Estate Agent award, both recognizing exceptional commitment to client service. Finally, come join us at an upcoming Happy Hour! They take place the 3rd Wednesday of each month from 5-6:30PM at Matt The Miller’s in Carmel. Food & drinks are on us!!
Call us today to schedule your private, no-obligation new construction consultation!
Your Personal Real Estate Consultants…for Life!
Steve & Jack Rupp
Keller Williams Realty
www.Welcome2Indy.com
317-573-1880
Steve@Welcome2Indy.com
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