If you want a place that truly feels like your own and meets your specific needs in every regard, then buying a newly constructed home may be the right choice for you. However, this process is not always as simple as you'd hope, and many buyers make mistakes along the way that complicate or delay the purchasing and building process. To ensure your home buying process goes smoothly, make sure you avoid these mistakes.
Mistake #1: Assuming the base price is the price you pay.
Generally, when you work with a building company to purchase new construction, you will tour a model home that represents the homes being built in the community. That home will probably have a price tag listed. However, you should not assume that's the price you pay. Each customization option you choose will likely add to that price. Before long, what you thought was a $150,000 new build is a $200,000 one. So, make sure you leave a lot of wiggle room in your budget. Don't sign a building contract when the base price is barely within your price range; the final cost of your home will probably exceed your budget.
Mistake #2: Not getting pre-approval from a lender first.
You should never sign a contract with a builder until you have been pre-approved for a mortgage. It's hard to say how much you'll be approved for, and if you sign a contract for more than the bank is willing to lend you, then you might be in hot water legally. Always go to the bank first so you know how much you can afford to pay. And don't assume you have to spend as much as the bank is willing to lend. If you have a good income and good credit, for instance, they might agree to lend you up to $500,000. But buying a $250,000 home will leave you a lot more wiggle room.
Mistake #3: Not trying to negotiate.
Many buyers don't realize that they can negotiate with a builder. The price they initially offer you does not have to be the price you pay. Feel free to offer then $10,000 less than what they are initially asking. They may come back with a price that's still $5,000 under their initial asking price, in which case, you've saved money just by asking. Builders set their prices with the idea that they're going to negotiate, but so many buyers never do.
For more information, contact a business such as RE/MAX ESSENTIAL.
