The advantages of new construction are pretty appealing. Everything is brand new and shiny – no worn carpet or strange smells, lovely new paint, the latest model appliances, and home automation systems that actually work correctly. And even better, nobody has ever lived in the home before. You are the first resident, and you get to break it in. As attractive as new construction may be, there are definitely some things you need to be aware of, and others for which you need to look out. Here are 5 things you should know about buying a new construction home in Boston.
1. Builders Differ Greatly
Many people seeking to buy a new construction home in Boston simply assume that all builders know what they are doing and do a good job. Oh how wrong that is! Some builders are meticulous and develop an amazing reputation over time. Others cut corners, whether with materials or the caliber of the subcontractors that they hire.
The experience of building new construction varies, because policies, skills, and options available vary widely among builders. You might encounter a builder with less proven experience, and you need to be wary about who you choose. When selecting a builder for your new construction home, look beyond the pictures on their website, ask around and seek out more information to ensure you’re making the right choice. Speak with other people who have bought homes from a particular builder and investigate any complaints filed against them.
2. Negotiating Room Is Much Less
Another thing you should know about buying a new construction home in Boston is that there is far less room for negotiations than there would be with a pre-owned home. Unless a builder is losing money on the project or under unexpected financial stress, you will have trouble landing a sweet deal on new construction. With a pre-owned home, fair market value and the seller’s wants determine the price. And often that price, as well as many concessions and contingencies, is negotiable. It’s just an accepted part of the process.
When you’re buying new construction, however, what you see is typically what you’re going to pay, plus any upgrades. Builders don’t like to lower the base prices on new construction condos because that alters the comps of the development and will result in more buyers looking for ways to negotiate downward. And this is another reason why a good agent can be a valuable ally – to help with what negotiation may be possible.
3. Understand Your Warranty and Get Inspections
Just because a [market-city] new construction home is brand spanking new doesn’t mean everything is as it should be. And that means you need to understand your warranty and get inspections.
New home warranties typically offer limited coverage on major items like the HVAC system. But some builders’ warranties are more limited than those of others. So be sure you find out exactly what is and isn’t covered.
In addition, that same newness doesn’t mean you shouldn’t pay for inspections – they are not for existing homes only. Not all builders are fully qualified, and more than a few cut corners. So have inspections done to protect yourself, whether to point out construction issues or defects, or simply to help construct a punch list of items that need to be completed (and likely would be), but worth listing. Make sure to add a home inspection contingency in your sales contract, just as you would with an existing home. This way, you can back out of the deal of something major is wrong.
4. Shop for a Lender
Buying a new construction home in Boston also means you should shop for a lender. Because new construction typically costs more and there is less room for negotiating, you need to get the best mortgage rate and terms you can. You also might find that some lenders’ mortgage products will not apply to new construction. One of our clients had to shift from a 30-year fixed-rate loan into a 5/3 ARM because all of the units in the building were still under the developer’s control and the lender needed other units to have closed first in order to offer the 30-year fixed-rate mortgage product.
Any time we speak with a client who is going to buy a new construction home, the first thing we recommend to them, after education, is to speak with lenders, get pre-approved, and “go shopping for money.” Literally. A fraction or two of a percentage point can save you thousands and thousands of dollars per year over time.
5. An Agent Can Save You Money
As important as finding the right lender is, finding and hiring the right real estate agent is even more important when it comes to buying anew construction home in Boston. A qualified local agent can be an invaluable asset in checking out builders and negotiating the best deal when negotiations are difficult. In addition, your buyer’s agent costs you . . . nothing.
At NextHome Titletown Real Estate, we are experienced in negotiating with builders and agents who specialize in new construction. So if you’re thinking about buying a new construction home in Boston don’t make the mistake of not searching out a qualified local agent. Find out today how our agents can help you with your new construction home.
Contact us today before buying your new construction home in Boston! Give us a call at (617) 657-9811!
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