Thursday, September 2, 2010

If You Want to Purchase a Newly-built Home in New Jersey, Here are Some Ideas

Newly-built homes, often in recently developed communities, are much more affordable than in years past. New homebuilders are using desirable, open floor plans in smaller sizes, and helping buyers purchase new homes, with incentives and financing options.  Use these important tips in a new home transaction to ensure that your hopes become reality.

1. Choose a Realtor Who Has New Home Sales Experience

Hire a buyer’s agent to represent you, act as your fiduciary, and disclose the positives as well as the negatives about the transaction. Builder’s agents don’t discuss drawbacks.  They want to move their inventory.  If your contract contains a contingency to sell your existing home before buying, hire your own seller’s agent to list your home.

I have experience and local knowledge of all our builders, in Mercer County and surrounding areas.  This expertise is free to you, the buyer.

2. Carefully Evaluate the Builder’s Lender before Committing

Builders often prefer their own lender because the builder will be kept fully informed of your personal progress; it’s one-stop shopping for a builder.  Builders will offer huge incentives to get you into your new home; sometimes up to 15% of the value of the home. However, they will often put one big stipulation on those incentives – that you use their lender. There are many problems that may crop up when you pigeon-hole yourself to one lender – higher rates and higher closing costs are the two biggest.

Ask to see a copy of your credit report and FICO cores. You can also order your own free credit report before shopping for a new home.

Insist that your lender guarantee its Good Faith Estimate. If the lender balks or makes excuses, go elsewhere. Reputable lenders will honor that request, even though it’s not required by law.  I can recommend several qualified, reputable local lenders familiar with new construction in New Jersey.

3. Check out the Builder’s Reputation

If a buyer has a bad experience with a builder, word spreads rapidly. However, accurately and fairly assessing a builder’s history is the appropriate path.  Check public records for lawsuits or complaints and evaluate their resolutions but, again, if you hire a local Realtor familiar with the builders (me), he or she can be a goldmine of information.

Talk to the neighbors and scrutinize the construction quality of surrounding homes. Is the builder consistently building same-sized or larger than existing properties, or are homes shrinking in size, which could reduce neighborhood value?

Learn if the builder limits investor purchases.  This ensures that the neighborhood doesn’t turn into a “rental” neighborhood, which may appear less well-maintained and reduce property value.

4. Hire a Home Inspector

Many people who buy new construction homes don’t bother to get a home inspection. Most new homes come with a one year “bumper to bumper” warranty that includes everything, and many home buyers feel that they can find out if there are any construction flaws during those 12 months. The problem is that many problems won’t surface until well after the 12-month warranty has expired.  An inspection provides education about the property, and offers the validation of a trained, independent third party assessment of the structure and systems.

If the inspector calls for further inspection by another professional contractor, find out if the inspector is telling you there could be a serious issue or if the inspector isn’t licensed to address that issue.

5. Obtain Legal Advice before Buying a Brand New Home

All of our New Jersey purchase contracts go through "Attorney Review."  Make sure you understand what you are signing and what contingencies protect you, the buyer.  Ask questions about removal of contingencies and your cancellation rights.  A knowledgeable local Realtor - me - can protect you and explain the contract. 

Find out if the materials used by the builder contain chemicals that are hazardous to your health. If your contract contains a warning about health issues, it’s probably because it’s a valid concern and other buyers have gone to court over it.

Your best course of action is to be represented by a local Realtor who knows the builders, their product, their reputation, and what is available in the area where you want to live.  I have that experience.  Call or email me so you can start looking and move into your new home in New Jersey before the cold weather.

Joe Giancarli, SA
Real Estate Advisor

(read more at RISMedia)

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