Buying a home, especially when it’s new construction, can claim your lifelong savings and a lot of your time. So, how can we step into the world of real estate without having a crystal clear concept of every in and out of new construction, without spending every free moment researching? Ed Constable has put together some information for you about new construction and what to know to save you some time!
When buying new construction, the home generally remains under a manufacturing warranty for one year. This means, if within one year there is an architectural fault or breakage in the new build, the construction authority is responsible for repairs. But, this is completely different from an insurance issue. The home warranty is strictly limited to architectural defects and construction issues.
Bargaining is not always the best way of economic settlement. If the new construction property you are interested in is from any decent construction company, they will not bend in terms of the sales price. Instead, you might be able to ask for a free installation of a gadget in your new build property, a little extra accommodation in a different appliance package, and so on.
Non-Refundable Earnest Money
Money is always an important subject to understand. In every contract of any new construction, a certain amount of money is taken from the buyers by the construction firm. They call it ‘non-refundable earnest money. This money ensures that if the buyer backs out of contract in the middle of the construction, the company will not lose money.
Design choices are made to fit the buyer’s needs that may not fit another buyer’s desires, causing the company to lose money if the original buyer backs out. When putting earnest money down on any home, it is done to show the sellers you are serious about purchasing the home and are willing to lose that money if you can’t hold up your end of the deal to make it happen!
Get Everything in Black and White
Don’t spare a single penny without a written understanding of where you are going to invest your lifelong savings. When investing in new construction, keep in mind to read everything before signing any contract, check all of the payments due, when they are due, and if they are refundable, the expected completion date of construction and various progress points, name of associated banks, and so on.
Research the Builder
Before signing any real estate contract, especially for any new build, do thorough research on the builder. Research over the internet, ask your agent how much he knows about the enterprise, visit other real estate projects, and try to talk to other buyers and see if they would have chosen anything differently with their home.