Buying a New Home? Here are Five Things Your Builder Won't Tell You

By
Services for Real Estate Pros with Think Glink Media

Buying a home is enough of a stress without worrying about whether your builder is being upfront, but-especially in this market-builders may have incentive to keep things from you.

 

During the recession, a lot of builders have gone bankrupt. Remember, if the developer goes belly-up before the development is sold out, you run the risk that the bank will sell a portion of the development to a developer who will put up less expensive homes, cutting your future appreciation and perhaps depreciating your property from the price you paid.

 

Here are five things your builder may be hesitant to disclose:

  1. If I don't sell to you, I might run out of cash. The developer might promise you an amazing deal. But what he won't tell you is the company is short on funds to get the project completed. If the developer has to carry the property for two extra years before selling it, his profit might evaporate. That makes the developer desperate to offer you a great deal (good for you now), but they might have been skimping on everything else (bad for you down the line).
  2. You may have trouble financing your property. Before you make your offer, ask to meet with the head of the homeowner's association. You don't want to buy in a community where homeowners are already behind in paying dues, or you may have trouble financing your property.
  3. You future neighbors can tell you whether I'm good at building homes. One of the best ways to find out is a developer's homes stand the test of time is to chat with people who live in houses he has already completed.
  4. It's easy to spend more than you should on options and extras. You don't want to spend so much you wind up owning the most expensive and upgraded house on the block. Figure out what your budget is ahead of time, and then choose the options that will ass the most value long term.
  5. Your property may not appraise out. Before you sign the application to purchase the property, count the foreclosures in the subdivision. If there are more than a few, they could drag down the true value of your home so that it is worth less than what you're prepared to pay for it.
For more tips on how to handle builders, check out my blog post on today's Equifax Personal Finance blog: http://real-estate.equifax.com/2010/10/buying-new-home-here-are-5-things-your.html

close

Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Paul Walker 10/22/2010 03:26 PM
Topic:
Home Buying
Location:
Illinois
Groups:
1st Time Buyers
Advice for Buyers
Free Real Estate Tips and Information
Home Inspector's Corner
Real Estate Trends
Tags:
buying a home
home builders
foreclosure
real estate advice
personal finance advice

Anonymous
Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
410,608
Paul Walker
Equity Fifty Five Realty, LLC - Scott AFB, IL
Scott AFB IL Area Realtor

Very good things for all home buyers to consider before purchasing a new construction home.

It is very important that home buyers have a good, honest, and experienced Realtor to represent them.

Oct 22, 2010 01:32 PM #1
Rainer
197,982
Curt Baumgarth
Century 21 All Stars - Mesa, AZ
CDPE Realtor Serving the Valley of the Sun. 480 26

Good stuff. its always good to know the inside scoop on stuff:) Thanks for the list.

Oct 22, 2010 01:41 PM #2
Rainmaker
343,054
Sonja Patterson
RE/MAX Realty Center - Cypress, TX
Texas Monthly 5-Star Realtor Recipient for the Hou

Ilyce, great points you brought out in this post! Caveat emptor is true now more than ever!!

Oct 22, 2010 01:52 PM #3
Anonymous
Post a Comment
Spam prevention
Show All Comments
Rainmaker
362,682

Ilyce Glink

Best-selling author, award-winning TV/radio host.
Ask me a question
*
*
*
Spam prevention