10 Key Questions to Ask When Buying New Construction

Buying new construction can be exhilarating and fun. I mean, you get to design and construct the home from the ground up. And whether you are buying from a developer where you have limited options or going with a complete custom home on your own lot, there are some questions to ask before finalizing your new construction purchase. Here are 10 key questions to ask when buying new construction.

Buying new construction can be exhilarating and fun. I mean, you get to design and construct the home from the ground up. And whether you are buying from a developer where you have limited options or going with a complete custom home on your own lot, there are some questions to ask before finalizing your new construction purchase. Here are 10 key questions to ask when buying new construction.

#1. What previous homes and subdivisions as the builder constructed?

Has the developer or builder constructed other homes in the area? Can you take a look at those homes to see the quality and construction design? Do you have references from recent buyers of that new construction? It's a good idea to take a look at what a builder has already constructed so you know how they design, where they might cut corners, and what the homes look like when they're finished.

#2. Do you offer a warranty?

Some builders and developers will issue limited warranties on their work either within the sales contract or purchase agreement. This also might be a separate document so it's definitely worth asking. Some developers may not automatically offer it but will choose to offer as an incentive to close the deal. Many types of warranties offer one year for labor and materials, two years for defects to systems such as HVAC, electrical, and plumbing, and 10 years for any structural defects. However, should you move in and find issues right away, you could typically contact the builder and have them repair or replace items immediately.

Read More: The Importance of a Home Warranty

#3. Are there any modifications I can make before closing on the home?

Depending on the level of customization, you may or may not be able to make certain modifications and changes. Make sure you see the plans, specifications, and an itemized bid of certain materials and items so you know how much everything costs. Many additional fees can quickly lead to up charges changing your budget dramatically. Ask about modifications and how they will affect the bottom line price.

#4. Can I have my own home inspector?

We always recommend having an inspection on new construction even though it is a new home. You never know what builders and contractors might overlook or completely forget altogether. You should always be able to have an inspector examine the property prior to closing and most lenders will require a certificate of occupancy for newly built homes before you can secure financing.

More: How to Make an Offer on New Construction

#5. Can I back out of the contract?

Ask about how to terminate the contract. This is a question you want to ask early in the process and before you sign anything. Most real estate deals that involve a new build purchase agreement will allow you to renegotiate if the house appraises for less than the sale price or the home inspection reveals significant issues and hazardous problems.

#6. Who is the contact person in charge of construction?

An experienced company even with an experienced owner may still put someone inexperienced on a new project build. It's important to know who is your contact person, which may in fact be the real estate agent. Make sure everyone involved has the necessary expertise and is accessible to you.

#7. When are extras paid?

Many of those upgrades and extras can actually be paid up front and not built into the cost of the home. This may or may not be a benefit and an advantage to you so it's important to understand all the ways that you can pay for the upgrades. Some contractors may actually split the schedule depending on the nature of the extra. Knowing what's expected of you is crucial to making sure you're not surprised when these costs are factored into the final bill.

More: 3 New Construction Upgrades that Last

#8. What happens if the completion date doesn't happen?

Builders are usually good at keeping to schedules in general, but, not everything can be predicted. You never know when weather, shipping, and in today's unique pandemic climate, things might be delayed. You need to know what happens if a completion date is missed and how the builder is prepared to handle it.

#9. How do you handle the final walk-through?

A final walk-through on new construction isn't necessarily the end result. You may find that there's an issue that needs correction even after the final walk-through. You'll need to find out when this will be scheduled and how it will be written into the completion schedule if something is not finished.

#10. Ask what your role is in the transaction.

Building a home is a two-way street Between the contractor or builder and the homeowner. Builders will need to be able to rely on you to respond in a timely fashion when it comes to questions about materials, finishes, and colors. You'll need to find out a communication system that works for both of you and then respond in a timely manner.

Buying new construction can be fun, but it also helps to understand your role, their role, and what happens if expectations are not met. Use these 10 questions to make sure that you feel comfortable and confident with your new construction purchase.