Many people will Build or buy new homes from custom home builders. Here are some important questions to ask BEFORE making the decision to buy…
What is the builder’s reputation?
This may be the most important research you can do before buying from a custom builder. Check any prior home/subdivision/condominium projects that they have built in the recent past. Look at the Austin Luxury Group
website for a list of quality custom home builders in the area and check Home Builders Association
(HBA) to see that they are in good standing and a member, whether they have won any awards and the number of recommendations and/or complaints, if any, made against them.
Austin Luxury Group
is a private corporation which brokers transactions with new and resale custom homes in the Austin and Central Texas areas.
Are you ready to own a custom property? Most custom homes go over budget during the process of building (its just a fact of life) so be prepared to spend between 10%-15% more than you think when its all said and done, especially if this is your first time to build. A good experienced agent can help reduce this additional exposure by offering suggestions and ideas before contract to be sure less is forgotten in include.
Is the builder contract unfair to buyers?
In many ways the “builder” contract favors the builder. For example, the builder usually has the right to extend the closing date, change the layout or square footage of your home and also many of the finishing and there is little the buyer can do about it. This can cause real problems if the delay affects your child’s new school year or your employment plans. Again, remember to ask prior buyers if their home was delivered on time, and whether they received substantially what they were promised.
What extra charges will a buyer have to pay?
When you buy a new custom home, the price quoted to you should be based on your architects plans. Sometimes the builder will try and save you some money by suggesting you consider using re-use plans or builder altered plans. This can cause issues and change orders are expensive. Its best to have your own architect on your side to think of the subtleties in the design that the builder might miss. How much will you be charged for change orders, do you even need a change order? Who pay for mistakes, defects, etc? Is this a cost plus scenario or a one price scenario. These are all very important to completely understand and get comfortable with. Each scenario has pluses and minuses so be sure BEFORE you pull the trigger.
Builders in general make a lot of profit from upgrades which they offer to buyers for finishing in the home. Here is where you may want the assistance of a professional real estate agent, who will tell you in advance in which rooms these upgrades will make the most difference on any re-sale. An agent can also offer helpful advice about which lot or unit location and layout will have a higher re-sale value.
Can a buyer transfer the agreement before closing?
When you sign your builder agreement, the home may not be ready for 1-2 years down the road. Things change. Try to negotiate right away the right to transfer or assign your contract to someone else before closing if your circumstances change. Some builders will not allow it, others permit it for a fee, while some will permit it one time only, for no fee.
Ask the right questions before you buy a home from a builder and you won’t be disappointed later.