Questions regarding buying an unbuilt, new construction home

In My Humble Opinion
1

The Mr. and I have been looking to “upgrade” to a bigger house as we have outgrown our little town-house which we are going to keep and use as a rental.

We have been looking at houses and are going out again this weekend to look at resale homes, but so far it has been frustrating and disappointing. The houses in our price point are almost all trashed foreclosure homes. Some of them need upwards of 20K in repairs (yikes). We have had two deals on good houses fall apart. The first was, after almost a month and a half of negotiations for a sale, the bank decided at the last minute to renege on the deal (bastards). The second- well really never happened, someone beat us with an offer- by hours. crap.

I came across a new development neighborhood going in - and the floor plans look appealing for what we want. However, at the current time, the floor plan that looks the most appealing (starting at 290K) has no available models at the current time. Even with the “optionals” we need (mostly the third garage bay), still falls within our price point.

Now, here is where the questions start.

What is it really like to buy a brand new home that you pick the lot and pick all the options?

Can you get concessions from the builders if, for example, I don’t want builder installed flooring on the first floor because I want to do stained concrete? For example, no 1st floor flooring for a discount on upgraded counter tops.

What are the important questions to ask during the design phase?

What kind of trickery should one be aware of from builders?

What sort of surprise fees should we ask about?

Can you ask that the house be set forward on the lot for a smaller front yard and a larger back yard? Who the heck hangs out in their front yard anyway?

Do you have to keep checking on your build site to make sure they are putting the right options in?

What sort of recourse does one usually have if there are problems during construction? (Um, yeah that railing is all wrong or Hey this is supposed to be a 3 car garage)

2

Get Everything in writing!
I know that it seems really, really obvious, but get a written description, with drawings, if applicable. Typically (I say this as a person who worked “behind the scenes” for several homeowners for over a decade) the builder has very commonly asked for changes. Anything else needs to be very meticulously documented. If you have an idea of what you want the finished product to be, bring in magazine photos, millwork samples, paint swatches, whatever. Your ideal of a “mission style fireplace mantle” may be nothing at all like your builder’s idea.

Most builders that I’ve worked for really aren’t dirty scoundrels looking to pull one over on you.

In my experience, most builders will be happy to allow you on site to check progress. Often they’ll want you to go with a company employee and during a lull in work (like evenings). This is pretty reasonable, as a working construction site can be fairly dangerous.

As for the positioning of the house on the lot, those setbacks are usually set by the city or county planning office. The builder will likely have zero opportunity to change that.

If the railing is wrong (Yup, in every house at least one thing is going to be wrong.) then get out your paperwork showing that you ordered the maple square spindle railing with the routered groove detail in caramel stain and glossy finish. However, when you are signing off on your selection, find out if the maple square spindle railing with the routered groove detail in caramel stain and glossy finish is actually the one you want. Most homebuilders will have a selections studio with little mock ups of railings, books of carpet samples, light fixtures, you name it. Take your time in making selections, and double checking the sales person’s work. This is your time to be picky and ask questions. Don’t let them rush you. Remember, the color choices that you sign off on become part of the specifications, which is a legal document.

If the builder makes an appointment for you to come in an pick colors, make sure that you can make it. Some color changes (such as kitchen cabinets )may need 4-6 weeks of lead time. Not making decisions by the deadline can lead to delays of getting your home.

If you want to make a change after signing the purchase agreement, you will and the builder will write up a “change order” or “purchase amendment”. GET A COPY SHOWING THAT THE BUILDER SIGNED OFF ON IT. Keep these copies.

A word of advice, unless there are already a dozen planned for each room or something, get more electrical receptacles, phone jacks, cable outlets. Order them with any electrical changes right away. They cost almost nothing to put in first, but can be a bit of a pain in the butt to put in later.

To sum it up - get every freaking thing in writing. Keep every single copy of paper realted to the purchase.

3

I agree with everything Jimmy said.
I just wanted to add, if you do delete the floor covering, do not expect a perfectly flat shinny smooth floor.
In a tack built home, they are probably pouring and finishing a dozen or more home in a day. Since the cement finishers know that the slab will be covered with carpet or hardwood, they are not attempting to do a 100% perfect job. they are doing a just good enough to get by job.
This isn’t to say that you won’t be able to stain said floor, just don’t expect perfection.

4

JF, It’s good to know that all homebuilders aren’t rotten bastards looking to screw people over… If they were- they probably wouldn’t be in business for very long (one would hope).

Also, thanks for the tip about not delaying the “picking out” appointments and documenting and double checking everything and getting stuff signed off on.

Thanks for pointing that out, though, we know we will have to do floor prep to do it. We have/had plans to do that in whatever house we end up buying. I just don’t want to pay for flooring that I am just going to rip out :slight_smile:

5

re: the floor

I think a stained concrete floor is a nice floor, but I doubt that the average buyer would. Your banker or FHA/VA or other mortgage guy might not allow you to not put in a standard floor. If you don’t make the payments and they have to reposses the house, they will likely want to put it onto the market without investing any money into it. Putting in carpet would be an investment that they would have to put up, and thus they may not allow you to do that. I had a friend who wanted to save some money by doing his own trim. He eventually got them to agree to it, but he had to work it for awhile.

Not saying it can’t be done, but anytime you move outside the norm, you can expect some difficulties somewhere. Good luck!

6

Visit a model of your floor plan if at all possible.
Get cable and electrical outlets everywhere. Ceiling boxes for fans/lights are expensive but worth it. Putting them in after the house is finished is a pain in the ass, and you will have wished you paid up front.
Make sure there are enough air ducts to each room so that a room isn’t a wildly different temperature from the rest of the house.
Make sure the range exhaust fan is vented outside if you do any regular cooking at all.
Get the names/numbers of all the subcontractors that the builder uses on your home. These are useful even after the warranty is up.
Make sure they put Tyvek wrap around the house before the siding goes on.
See if they will do sod, or add topsoil before spreading grass seed.

I had my house built in 2004. I put my deposit down in March, and we moved in September. Feel free to email/PM me about any questions you might have.

7

Boy do I understand your frustration, LVgeogeek. I’m in a notorious bubble-area myself and though there are a million homes on the market, they’re still way too inflated to tempt.

My advice, FWIW, is wait another year – especially since you don’t have to sell your current house. I think this slide, particularly in your area and mine, has only just begun. You don’t want to wind up in a new home that, next year will be worth worth 80% of what you paid for it this year – or worse, in a partially built and/or abandonned subdivision.

Ko
Gloom and Doom Housing Bear

8

Couldn’t agree more.

9

We had our house built, and we made a few minor changes to the plan…extending a half wall, adding a closet. It was very nice to pick out everything from the get go…faucets, paint color, cabinetry, etc.

You will be paying a construction loan, interest only, until the house it complete, then it will be converted into a traditional mortgage. We also picked out our own appliances…our builder told us when we needed to have them delivered.

All in all, it was a fairly painless experience, and I will do it again. We saved money by painting the interior and exterior ourselves, but I won’t do that again.

10

I’m amazed that you can afford a new home but not a decent resale one. On the other hand, with the LV housing market tanking, I guess you can get a good deal.

I haven’t bought one, but I went through my office mate buying one, and a bunch were constructed a block from me, so I have a few additional suggestions:

look for tricks when looking at the model. The models down the street were set up without doors on some of the bedrooms, making them look bigger, a tiny bed in the bedrooms, making them look bigger, and no curtain on the window in the bathroom making it lighter. Look at the model with a skeptical eye, since builders are more clever at staging than your average seller.

My officemate had an electricians license, and still had problems. His house was a one-off, and he found he had to visit the site every day, to make sure he caught it when they put the door where the window was supposed to go and vice versa. I think it would be a good idea to get permission to check up to make sure they’re using the right materials, and that the fit and finish are good before the pre-closing walkthrough.

And, what koeeoaddi said.

11

We bought a new construction house from a builder 4 years ago. I’d agree fully with everything in JimmyFlair’s excellent post. The other things I’d add:

Make sure the Purchase & Sales includes a remedy that you’re comfortable with for anything you pay for, whether up front or with a change order, that they don’t do right - like “full refund of costs or post-installation, at the sole discretion of the buyer.” You don’t want to order and pay for a built-in vacuum system for $2000, have him order the parts for it but forget to install it, and only refund $1000, since he’s leaving you the parts in the basement. You’d be really well served having a lawyer look over your P&S. Also negotiate walkthroughs and put in the P&S.

Run cat5e/cat6 cable from each room (preferably 2 walls in each room) to the utility entrance in the basement for networking. Much nicer than wifi.

Remember that while the great majority of builders aren’t out to screw you, they won’t go out of their way to look after your interests either. If you pay to have something done, and it isn’t, make an immediate stink.

12

I’m a builder. Jimmy’s response pretty much hit the nail on the head.

-Try to get as much info as you can on the change order process. Changes are typically expensive, and they are for a reason. A change that you feel is minor could hold up several other steps in the process. Some builders calculate the cost of the change, then add 30% (if the change is minor) for the time and trouble.

-Consult with an attorney before you sign anything. Get a good one who has seen it all before.

-Most builders aren’t crooks, but many buyers approach them as if they were, which can put both parties on the defensive right away. It doesn’t help matters that some builders view the owner as a gigantic pain in the ass (which they may or may not be).

-Make sure you feel comfortable with the builder, or whomever you will be dealing with directly. This is very important.

-Anything is negotiable. Anything. Get as much of it done up front as you can.
For the record, I don’t build custom homes, but many of my friends do.

13

Inspect the place before taking posession! And during construction if possible. This is what the home inspectors are supposed to do, but last year I heard of a case where a crooked builder was installing insulation, getting the signoff, then removing the insulation and putting it in the next house before its inspection. People ended up with no insulation and then wondered why their heating bills were so high…

See whether you can get figures on operating costs, given the equipment and design of the house, the climate it’s in, plus the costs of energy. Multiple projections based on different price points for energy are good as well. Even better is a spreadsheet where you just plug in whatever energy costs you have.

14

Desert landscaping and dirt is what you get here. I wouldn’t put grass in anyways. It uses so much water. Outdoor irrigation in the Las Vegas area accounts for about 70% of a "households water use.

With the way the housing market went bat-shit crazy here, homes were selling for over-inflated prices, and values were pegged high people took out equity loans… so now you have banks trying to sell homes that have 500K+ owed on them for 300-400K… We are looking around the 300K price point but they all need work (new carpet, new flooring, new cabinets/counters) and some are completely trashed and only a wrecking ball would help. A 300K fixer upper opportunity that is not a good deal. If were going to spend that much, might as well get it new and not have to replace everything.

The development were looking in has been there since 2005, so it’s an established neighborhood. they are just building out the rest of the lots, still a decent place to look. Vegas is a weird housing market. Vegas will always have appeal, and the market sucks live everywhere else, but it’s not as bad as it is other places.

Even though sales have slowed, they haven’t stopped. People keep moving here by the thousands.

We are financially sound. We are pre-approved for a mortgage locked at 5.875%, Have 75K in cash for a down payment + improvements. So we’re ready to go. We could wait, but we have no room in our townhouse anymore- it’s too small for us. And plus we have been wanting to move to a new area for some time now.

The new home we are considering is rated energy saving, with a SEER 13 AC unit, Low-E windows, R19/R30 insulation, water saving water fixtures. It’s a desert here and gets hot as heck in the summer, so good insulation is a must. Our 25 year old town home costs us, in electricity at the hottest month of the year $250. and that is with an old AC unit. We already have a good idea what operating costs will be. 2-Story’s have 2 AC units that you set and run separtely for up and down. I usually have the thermo set at about 80-82F in the summer. and turn it up when I leave the house.

Thanks for all of the info and input so far.

15

given your location i would look into having solar panels. some developements don’t allow them. if you can have them, go for it!