Buying a property before it’s built can cost less. But to land the best deal, you have to know what you’re getting — which can sometimes be confusing.
Blueprints, for example, don’t always give an accurate picture of what the finished condo or home will look like, according to the New York Times. Likewise, RealEstate.com notes that all the fancy upgrades you see in the model version may not be included in the base price and can actually cost tens of thousands of dollars more to add.
It’s important to know exactly what’s included — and what isn’t — in any property you buy. If you’re thinking of purchasing a pre-construction home, ask the following questions before you sign on the dotted line:
What size will it be? Don’t just assume the builder’s marketing materials are telling the whole story. Square footage can be calculated in a number of ways, according to the New York Times — including measuring from the exterior walls (factoring in unusable space) or counting an exterior balcony or basement storage space, which can add 10 to 40 percent more to the total. Find out how your potential home’s space is being calculated.
Are there any pending lawsuits against the builder? For background information on building projects in your area, the National Association of Home Builders suggests looking in your local paper’s ads and articles to find out what builders work locally, what projects are underway and how they’re priced. The Better Business Bureaurecommends checking out the developer’s previous projects to assess the quality of their landscaping and other amenities. You can also walk around recent developments and ask residents if they feel the builder did solid work, according to Zillow, and look up service providers in your area that are on the Better Business Bureau’s website to read reviews and check for alerts.
What amenities are included? Make sure any value-adding “coming soon” extras touted by your builder — like a pool or golf course — are really planned for the community you’re moving into and will eventually be built. According to Bankrate, it is a good idea to check with your local building department, an attorney or a real estate agent to see if the builder has posted a bond for the unbuilt amenity. The Better Business Bureau also recommends including any home upgrades in your pre-purchase contract, along with a stipulation that lets you visit the site for several scheduled appointments to see how things are progressing.
What percentage of the homes or units have been sold? Maintenance and upkeep can be a struggle for multi-unit buildings and communities that are undersold. Realty Times recommends asking how much of the total project is under contract — not just in the reservation phase.
Another pre-construction best practice: Don’t automatically assume the builder’s agent is your best bet.
While builder-provided real estate agents can provide valuable services, such as explaining upgrades and floor plan differences, they represent the builder’s interests, according to the National Association of Realtors. To ensure your needs are front and center, consider getting your own real estate agent to help handle the transaction.
And — when it’s finally time to close — don’t skip the home inspection stage just because the property is new. You may find defects or other problems that need to be corrected.