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  • Brad Stringer, BA, MBA, CMI, CIE

New Construction Home Inspection: The Top 8 Things Home Buyers Should Watch Out For

Introduction:


Buying a new construction home can be an exciting experience that offers the promise of modern amenities, customizable features, and the satisfaction of being the first to occupy a brand-new space. However, amidst the allure and hype of a shiny, untouched property, there are potential pitfalls that savvy homebuyers should be aware of. In this guide, we'll look at what to watch out for when considering the purchase of a new construction home.


1.    Builder Reputation:

This one cannot be stressed enough! Before diving into the world of new construction, it's crucial to research the reputation of the builder. Look for reviews from previous buyers, visit completed projects, ask respected real estate professionals in the area, and inquire about the builder's experience in the industry. A reputable builder is more likely to deliver a quality product, as well as stand behind their work after the sale when issues may occur and require post purchase correction.


2.    Detailed Contracts:

Not all purchase contracts are created equal. Carefully review the purchase contract you are signing with your builder. Ensure it includes specifics about the materials, finishes, and any customization options you've chosen and any associated additional costs. Clarify the timeline for completion, and understand the consequences for delays, such as a potentially higher interest rate. A thorough contract can protect you from unexpected complications and provide a clear understanding of what you're getting. If you are having trouble understanding any portion of the contract, consider consulting with a real estate agent or real estate attorney to ensure that your interests are protected in the contract.

 

3.    Home Inspection:

While new construction homes typically undergo multiple code enforcement inspections by the local authority during the building process, code enforcement inspections are only as good as the municipality requiring them. Some rural construction homes do not even undergo a code authority inspection as they maybe outside the local municipalities jurisdiction.  Hiring an independent home inspector is crucial. An inspector can identify issues that may have been overlooked, such as poor craftsmanship, improper wiring, plumbing problems, or items not fully completed prior to closing. Don't assume that everything is perfect just because the home is new. Every home is built “by-hand” with multiple persons and trade contractors coordinated by a construction supervisor. (Another reason Builder Reputation is crucial).


4.    Model Home vs. Actual Home:

Builders often showcase model homes with top-of-the-line finishes and upgrades. Be sure to understand what features are standard and what comes at an additional cost. The actual home you purchase might not include all the bells and whistles you saw in the model. Just like a new car purchase, upgrades can sometimes put you way outside your budget when it comes to a new home purchase.


5.    Construction Timeline:

Delays in construction are fairly common. Weather, material shortages, sub-contractor availability, or other unforeseen circumstances can impact the timeline. While it's reasonable to expect some delays, make sure the contract addresses potential delays and outlines the builder's responsibility for timely completion.


6.    Warranty and Guarantees:

A new construction home should typically come with a one-year builder's warranty. Familiarize yourself with the terms and conditions of the warranty, including what is covered and for how long. A solid warranty can provide peace of mind and protection against unexpected issues that may present themselves after closing.

7.    Location and Future Development:

Consider the location of your new home carefully. Research the neighborhood and inquire about any planned developments that might impact your property value or quality of life. Proximity to schools, shopping centers, transportation hubs, and related traffic can also significantly affect your long-term satisfaction with the home.


8.    Home Owners Associations: (HOA)

 Almost every planned neighborhood will have a Home Owners Association. These associations typically have some type of annual maintenance dues for common area maintenance and upkeep. These can range from a few hundred dollars a year to a few hundred dollars a month depending on the neighborhood, amenities, and related costs associated with their maintenance. Make certain that you budget for these and any other miscellaneous costs that may present themselves as being part of a new construction neighborhood, such as annual neighborhood pool fees.


Conclusion:

While the prospect of owning a new construction home is exciting, it's essential to approach the process with a discerning eye. Thorough research, careful inspection, and clear communication with the builder are key to ensuring that your dream home doesn't turn into a nightmare. By being vigilant and informed, you can navigate the new construction maze and make a confident investment in your new construction home.

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