Are you considering buying a new construction home in the Palm Springs area?
Do you need clarification on the best course of action? Do you want the best new construction home for your money?
Many new home construction neighborhoods are being built across all nine cities of the Coachella Valley. There is a big difference between buying a resale and a new construction home today.
How can you make purchasing a new construction home as successful and easy as possible?
1. Use a Realtor® to Represent You
Yes, we represent new home buyers all the time. Many new construction home buyers need clarification when they visit a model home and meet the sales rep. The sales rep answers a few questions. If the buyer uses the sales rep to represent them when buying the house, there is a problem because the sales rep works for the builder. Their loyalty is to the builder.
You need a representative working specifically for you and helping you get the best possible deal. You should pick a Realtor® who is familiar with the new construction home process. It is essential to choose your Realtor® before going to look at a new construction model.
If you go to a model home without your real estate agent, which happens often, just give them your agent’s name and number. Better yet, you could give them your Realtor’s® business card. If you find a house you love and your agent is not with you, call your agent and let them know immediately. Don’t let the builder’s representative make you feel you must act or sign something immediately. Just take a breath and call your agent. That’s what we’re here for.
2. Understand the Costs of the Home
There are different costs associated with a new home construction purchase. For example, you may see a sign that says new homes start at $499,000, but when you go into the model and look at everything available, the price is closer to $599,000. Although frustrating, this happens because the advertised price is the lowest-priced base model with no upgrades, and it’s not on a premium lot.
Let’s break down some of the costs. First, you have the base price of the home. That’s the cost of the floor plan you choose with no upgrades. Then, you may have an additional charge for a premium lot that offers a view or a corner lot. A premium lot is one the builder considers better than the others. The premium lot usually has a higher cost associated with it. Some lots are better than others; some back up to other homes, and some back up to a busy road. Ask about the lot you like and whether it’s a premium. Then, you have construction options. The builder may offer options like a bonus room, an extended primary bedroom, or turning the living room into a den. Make sure to distinguish construction options from cosmetic options. Every builder has construction options, and these costs can increase. The more you change the home from its original floor plan and include upgraded finishes, the more it will add to the basic plan price. You can see some of the upgrades’ costs in the Builders Design Center. Three areas to focus on are the flooring, kitchen, and bathrooms. These areas will be more expensive to remodel in the future, so it’s usually best to have these costs rolled into the mortgage. All of these costs make up the final price of your home.
3. Negotiate with the Builder
Most builders hold firm on their base price and prefer to avoid negotiating. Instead of asking for a $15,000 across-the-board credit, the builder may be more receptive to reducing the costs of upgrades in the design center. The builder’s willingness to give any credit depends on the situation and demand in the marketplace.
Consider looking at homes the Builder has already built but still needs to finish. If these homes are not sold, the builder may be more willing to negotiate because they won’t have to pay holding costs. Consider an inventory home versus a pre-construction home.
4. Be Aware of Closing Costs
Pay very close attention to the closing costs. New construction closing costs are usually higher than those of a resale home. If you use the Builder’s preferred lender, they sometimes offer a rebate that covers the increased closing costs. Many of my buyers use the Builder’s preferred lender because they want the rebate. I don’t blame them; money is money. Outside lenders may also be able to offer rebates and sometimes lower interest rates, so do your homework when it comes to choosing your lender.
5. Get a Home Inspection
Even though the builder usually offers a great home warranty, you should consider getting a pre-drywall inspection. This allows your inspector to look at everything inside the house before it’s hidden by the drywall. Then, we suggest one more inspection just before closing to ensure everything works correctly. This way, you can deal with any issues before you close, especially before you move in.
6. Know the Timeline
You never know how long it will take to finish the home, especially with supply chain delays and weather issues. Every Builder wants to build a house as fast as possible, but sometimes, things entirely out of their control happen. If you’re going to sell your current home or if you have to have a lease, consider a backup plan. For example, if you’re selling your current home, ask the buyer for a contingency to stay there until the new home is completed and ready. If you’re leasing, see if the landlord will consider a month-to-month rental once your lease runs out.
Let me know if you want to buy a new construction home in the Palm Springs area. I’d love to help you. Click here to schedule a call; I promise there’s no cost or obligation.
