Navigating New Construction: 5 Crucial Insights for Homebuyers

New construction sales have become a bigger piece of the market. Around 30% of the sales in the Sacramento Region this year have been new homes*. A lot of this can be attributed to the fact that resale inventory is at an all-time low. 

Purchasing new construction homes offers many benefits, from modern design to customization options. However, it’s important to be well-informed about the unique aspects of buying from a home builder. Check out the top five things you should know when purchasing new construction, ensuring a smooth and successful home buying experience.

1.  Hidden Taxes and Fees: Unraveling Mello-Roos & More

When buying new construction, it’s essential to consider additional costs beyond the base price. One common hidden fee is Mello-Roos, a special tax to fund the development’s infrastructure. Mello-Roos taxes are usually listed as a line item on the property’s annual tax bill. They could run from $1,000 – $4,500/year, depending on the development.

Make sure to inquire about such assessments and any other fees associated with the community, like homeowners association (HOA) fees, utility connection fees, and transfer taxes. Your realtor can help you understand and navigate these costs.

2. Builder Credits: A Potential Opportunity

Home builders often provide incentives to attract buyers, such as rate buy-downs, credits for closing costs, and design center allowances. These credits can be used to offset closing costs, upgrade options, or reduce the overall purchase price. Don’t miss out on potential savings when you’re purchasing a new build! Your realtor can help you negotiate and make the most of these incentives.

3. Project Timelines: Realistic Expectations

New construction projects have set timelines that can sometimes be affected by factors beyond the builder’s control, such as weather conditions and supply chain disruptions. While builders aim to stick to schedules, delays can occur. Be prepared for a flexible moving timeline and communicate with your builder and realtor regularly to stay informed about any changes.

4. Home Inspections: Ensuring Quality

Even with a new construction home, inspections are crucial. Hire an independent home inspector to assess the property’s structural integrity, systems, and overall quality. This step can uncover potential issues that might have been overlooked during construction. Address any concerns with the builder, ensuring that necessary adjustments are made before closing.

I helped clients purchase a beautiful high-end new build and during the home inspection, it was discovered that when the toilet was flushed in one of the bathrooms, the water would back-up and start coming up through the shower drain. Eeek! Luckily it was something the builder was able to fix and it was discovered before my clients closed on the property.

5. Realtor Representation: Your Advocate in the Process

Many buyers believe they can’t involve a realtor when purchasing directly from a builder, but this is a misconception. In fact, having a realtor by your side offers numerous benefits. A realtor can help you understand the contract, negotiate terms, navigate potential issues, and ensure your interests are protected throughout the process. Their expertise can be especially valuable when it comes to reviewing contracts, understanding warranties, and ensuring you’re getting the best deal possible.

Purchasing a new construction home can be an exciting journey filled with opportunities and rewards. By being aware of hidden costs like Mello Roos and other fees, understanding builder credits, setting realistic expectations for project timelines, prioritizing home inspections, and enlisting the help of a realtor, you’ll position yourself for a successful and fulfilling home buying experience. Remember, knowledge is your greatest tool in making informed decisions, so take the time to research, ask questions, and work closely with professionals who have your best interests at heart.

*Source: Sacramentoappraisalblog.com

Whether you’re buying or selling in Granite Bay or Loomis, I’ll make sure you have a competitive edge.