 Article Archive
Getting The Most For Your
New Home Dollar
You're in the market for a new
home. Not just a different home from the one you own now, but a brand new home. Unlike
potential buyers looking for a resale home, your situation entails some specific
house-shopping considerations that you should be aware of before you jump into the
process.
Martin Turk,
author of The New-Home Buyers Guide (National Book Network, 800/462-6420), explains that
there are a number of ways consumers in the market for a new abode can assure they get the
home they want -- for the best deal. He offers these tips:
- Begin by doing research. "Many times people know the
name of the builder, but what they don't realize is that builders form partnerships and
corporations that make them hard to check out And often there are no existing models of a
home available; there's only a person in a trailer with information." Turk recommends
asking this person the location of the builder's last project, and visiting it to see an
example of his or her work. "Go there, knock on the door, ask how these people's
experience was. Ask how their contract negotiations went. Most people will open up and
give you information, especially about whether or not the builder was willing to negotiate
on price."
Turk also suggests calling your local office of consumer
affairs or Better Business Bureau to check for complaints lodged against the
builder.
- Turk recommends working with a buyer's agent who is
experienced in new-home sales as opposed to a regular real-estate agent. This way you
interests -- not those of the seller -- are represented. "Whether you already have a
builder in mind that you want to research or if you're still searching for one, a buyer's
agent can help."
- Be aware that when buying a new home, what you see isn't
necessarily what you get. "New-home models are often loaded with options ad
upgrades," says Turk. "People don't always understand that all of these things
aren't automatically included in the price of their home." He recommends taking
scrupulous notes about what will or won't be included in your new-home package; ask
questions.
Also keep in mind that "with existing homes, you can
see it, and you know you'll close within 30-60 days," says Turk. With new
homes, the close time can be significantly extended due to the building process.
Builders' contracts are often heavily loaded in their
favor. Take a close look at yours. Turk to two specific areas: First, most contracts say
the builder has the right to substitute materials. "Make sure you make that
comparable materials," advises Turk, "so you don't end up with cheaper
substitutes." Also, the builder will most likely write into the contract a provision
that allows for late delivery-sometimes up to one year late. Turk advises a "not
later than" date, or making sure he or she "agrees to start your house within 30
to 60 days. The longer the process goes on, the more he's going to pay -- therefore he'll
be motivated to finish."
Finally, Turk says that the best time to buy a brand-new
house is right at the beginning of the project. "This is also the riskiest time, so
you'll have to do your research. But builders are in the business to make money, and
they'll raise the price at any time. It could be a couple thousand dollars at this stage,
a couple thousand at that stage. You'll want to get in on the ground floor."
To contact Turk for more information, write him at 6715
Little River Turnpike, Annandale, VA 22003.
YOUR MONEY
October/November 1994
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