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Buying A New Construction Home And Lot

By Elizabeth R. Elstien

You relish the thought of nobody living in a house before you, enabling you to give it your own touch before you even move in. You love the never-been-used-before appliances. A new-construction home is your answer.

To start, you've got to find a new-home community you like with basic floor models and pricing that fit your needs. To accomplish this goal, you can view home communities and model homes with your real estate agent or on your own. Be aware that strict rules exist when visiting communities with your real estate agent in order for that agent to get their commission for the purchase from the builder. Your real estate agent must accompany you for the initial community visit and officially register with the builder as the agent representing you in the sale. The registration is only good for a set period of time, after which your agent may need to re-register if you have not yet purchased your home.

When you head out to any new-home site without your agent for the first viewing and you decide to buy, the purchase agreement will be completed by the onsite builder's agent, who is working for the builder and must disclose that in writing. Unless you are familiar with the builder's purchase contract, it is best to be certain your agent is along on any visit to help you negotiate the contract. Remember, if your agent did not accompany you on the first visit to the community you wish to purchase from and register that they are representing you, don't bother bringing them along when it's contract-signing time, as the builder will not acknowledge that the agent is representing you in this deal.

A new-home purchase consists of reserving the lot of your choice by putting money down for the lot premium, which is like a lot down payment to reserve it until construction is completed. More desirable lots go quicker and cost more. Some lots only fit certain models. Then, you choose your home model and later you decide on the type of flooring and counters, paint colors, and other specifics. Final price depends on your lot and model choices along with your amenity choices (known as upgrades if you choose other than the standard builder amenities).

Specifics on the lot, model, amenities and homeowner association rules and more are written into the contract and its addendums, which differs from the standard California existing home contract. As with existing home sales, negotiation is always possible. Unlike existing sales, final construction may take months to complete with the time period specified in the contract. Also, a builder can use their own contract that may even specify the title and mortgage companies to use. Even with your own lender prequalification, there may be "incentive" advantages the builder can offer when you use their mortgage company to acquire a loan. Compare the offers and make an informed decision to save you money.

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About The Author

Elizabeth R. Elstien has worked in real estate for over 15 years as a real estate...

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