Your Trusted Real Estate Advisor

What comes next after you decide to buy a builder's new home? It depends. At what stage of the process is that new home you want to buy? Is it complete, ready to close? Is it at the "drywall stage", where all the structural parts of the home are done and what remains is the "finish" work? Or is it a "dirt start"?

The last three builder's new homes I have helped my clients buy were all complete and had been sitting a while. Today I will start with this situation and leave other stages for later.

This is really the best stage at which to buy a new home if getting the home at the lowest price is your primary motivation. Builders are sometimes stuck with "spec homes" (homes without a known buyer built on the speculation that they will sell sometime before the home is complete). Other times a buyer has contracted to buy the home, has picked out the upgrades they want, and then for some reason can't complete the deal.

In both cases, the builder wants to get rid of the home, even at a heavy discount if necessary. You get a home that is ready to go, and you can see what you will get. The main disadvantage is that you don't get to pick the colors, upgrades, and options. What you see is what you get.

At this stage, here is what comes after your decision to buy the home:

• You sign the contract and a lot of other documentation (mostly these are acknowledgments that you have received certain records such as a soils report, affiliated business arrangements, warranty disclosures, HOA documents, etc.). You'll also give an earnest money deposit as required by the builder. Each one differs on the amount and other requirements. This will be applied to your down payment and closing costs.
• The builder's sales representative forwards the contract and other documents to the person who has the authority to bind the builder on the contract (such as a "vice-president of sales"--the sales representative's signature does not imply final acceptance by the builder).
• You apply for a loan. You will probably be offered incentives to use a lender (and sometimes other businesses) affiliated with the builder. You can use whatever lender you want, but the incentives are usually only available if you use their lender.
• The builder schedules an "orientation walk-through" and the closing. At the orientation walk-through the construction superintendent goes over some further information, walks through the house with you to explain what you need to know to keep you home well maintained, and also marks any items either of you sees that might need some attention before closing. Those items are listed on a "punch list" so both you and the builder agree on what will be done.
• I always recommend that my clients have an inspection of their own, with an inspector they hire, prior to this walk-through. It is worth the extra expense to get a professional inspector (who knows what to look for). Even though the builder will have had multiple inspections of their own, it is possible for something to have been missed by everyone who has previously gone through the house.
• After your loan is approved, the title company and lender reconcile their figures and notify you of the final amount you need to bring to closing. You will need to take a cashier's check (not a personal check) in that amount to the closing.
• Just prior to the closing you will have a final walk-through with the construction superintendant to make sure all the work on the punch list has been done. Because of timing, some items may not have been done, so you will get something in writing stating when it will be done after closing. For example, weather might delay final landscaping until days or even months after closing.
• At closing you sign more papers, receive even more documentation, and hand over your cashier's check for the rest of your down payment and closing costs. You are then given the keys to your new home.

I am with my clients at each stage of this process, from the first visit to the builder's site through the contract, each walk-through and closing. This is one more reason to ask me to be your agent--even in the purchase of a builder's new home.