FHA loan limits increased for 2019WASHINGTON – Dec. 17, 2018 – The Federal Housing Administration (FHA) announced the agency's new schedule of loan limits for 2019, with most areas in the
Tips For Buying A New Home
Have you always fantasized about buying the home of your dreams, a brand new pristine home? Here are a few tips that can help you make the process a great experience.
Hire Your Own Agent
The builder's sales agents are paid to represent the builder, regardless of what they may tell you. Many will use high pressure tactics to persuade you to sign the contract. Many have sales quotas to meet and will do what it takes to meet theirs.
Hire a Buyer's Agent to represent you. In most cases your agent will be paid by the seller, if not your buyer’s agent can work with you for a small percentage. Even if you have to directly pay your agent it would be worth it because a good negotiating buyer's agent can save you thousands more than the commission.
Your own agent will represent you, and will disclose the positives as well as the negatives about the transaction. Builder's agents don't discuss drawbacks.
If your contract contains a contingency to sell your existing home before buying, again, hire your own seller's agent to list your home. Be aware that buying before selling is not always in your best bet, you may miss out on the home of your dreams if your home does not sell quickly.
Should You Use the Builders Lender
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. But a builder's lender might not offer you the best deal. Ask your buyer’s agent for a few names of local lenders and compare rates.
Shop around and interview your lender. Find a banker or mortgage broker whom you can trust and with whom you feel comfortable doing business.
Ask to see a copy of your credit report and FICO scores. You can order your own free credit report before shopping for a new home.
Ask questions about removal of contingencies and your cancellation rights. Make sure you understand your liability and commitments.
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.
Verify Option and Upgrade Pricing
Determine which options and upgrades you want. Bear in mind that for many builders, the profit margin is highest in upgrades. Some builders can sell a home for almost bare construction cost because they make the bulk of their profit in the upgrades.
Find out whether your lender will lend on all the options / upgrades you have chosen. If your lender will not finance 100% of your selections, you will be required to pay cash, often in advance.
Ask about cancellations and whether you will be held liable for items the builder cannot return to a vendor.
Some contracts give the builder the right to choose your upgrades if you do not submit your request within a certain period of time.
To save money, consider which upgrades you could purchase and install by yourself after closing. However, realize that some upgrades such as CAT-V, DSS or security wiring inside the walls are easier to do before construction.
Check Out the Builder's Reputation
If a buyer has a bad experience with a builder, the word spreads rapidly throughout a community. But you won't know if a bad rep is an isolated experience or if the builder repeatedly brings bad publicity to itself without checking and verifying the public records for lawsuits.
Talk to the neighbors and scrutinize the construction quality of surrounding homes. Is the builder consistently building identical or larger homes in the area or is construction lagging and homes shrinking in size?
Hire a Home Inspector
Always, always, always get a home inspection when you buy. Hire a licensed and accredited individual to perform the inspection. Be there for the inspection and ask questions because a new home can contain defects. The HVAC system might be too small or the plumbing could be installed backwards. Sub -contractors make mistakes.
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.
Judy Griffin is an experienced buyer's agent that has helped many buyers over the last 12 years. Call her today to see how she can help you!