Buying new construction is a different process than buying your typical pre-built home in Minnesota. What’s included, what’s not, and what’s in the contract depends on the builder that you use. As with any situation, it’s important to go in prepared – and that means asking the right questions.
The first interaction you’ll have with the builder will be with your Real Estate Agent and the builder’s sales representative. These early meetings are your chance to ask all of the questions you might have regarding costs, labor, and other essentials that you need to know about before signing a purchase contract. Write your questions down before you go in so that you can be sure not to forget anything important, and don’t be shy about getting the answers that you need. Buying a new construction home is a major purchase, and you don’t want any surprises later.
Not sure exactly what you need to be asking about? Please find below 9 questions you might want to ask when buying a new construction home.
Is the lot cost included?
When you’re exploring new construction options, you’ll see that each floor plan comes with a base price. This is the cost of the structure itself, as well as base interior and exterior features (we’ll get into those in a little bit). What may not be included is the cost of the land, so be sure to ask if the lot cost is figured into the base.
If the lot cost is included, ask if there are premium costs for certain lots. It’s possible that the base cost does include the lot, but the remaining lots in the development all have added costs for certain features that you can’t opt out of, such as look-out windows in the basement or wider yards. If the lot cost is not included, ask what it is (and whether there are additional premium costs) and factor those into the base price for the house.
How long will building take?
It’s important to know what you’re getting into pertaining to timing with a new construction build, particularly if you have a house to sell first or you’re going to be renting. While the building process is prone to delays and it’s important to ask how long the build will take. At that time, you’ll be able to get a general idea of what you can expect. Be sure to also ask if the build time includes the time it takes to get the permits, since those will typically take about 30-45 days to obtain.
What warranties are provided with the house?
Just because a home is brand new doesn’t mean that no problems will arise. Fortunately, most new construction homes come with one or more warranties that protect you. Ask what the warranties include and how long they last. While you can always buy your own home warranty, you should expect that the builder will cover you in some way for at least the first several years.
What are the standard finishes?
Does a base cost look too good to be true? That might be… However, the builder offers upgrades for an additional cost. Such as wood floors, granite or quartz countertops, etc. Ask what types of finishes are included, and better yet, go through the model unit with your agent & the builder’s sales representative and have them point out what’s standard and what is an upgrade. You likely won’t meet with the design center until after you’ve gone under contract, so it’s important to figure out early what sorts of finishes and appliances you can expect to be included in the home’s base price.
Are you allowed to purchase your own appliances or materials?
Had your heart set on high-end countertops, but the builder doesn’t offer them? It’s possible that you may be able to purchase them yourself and then have the builder install them. Alternately, some builders won’t let you purchase your own materials, but they will let you bring in your own appliances, even on items that are included in the sale. Keep in mind that, in terms of appliances, you probably will have to make some purchases on your own, such as washers, dryers, and refrigerators.
Is landscaping included?
Depending on the size of your yard, landscaping, including sodding and putting in trees and plants, can set you back several thousand dollars or more. Is that a cost you’ll have to factor in on top of the home purchase? Some builders include your basic yard work, while others leave you with unfinished land that becomes your responsibility to landscape (and generally must be completed in a set amount of time, per the contract). Ask whether landscaping is included, and if so, what that entails and if there is any sort of warranty on the materials so that if your newly sodded grass dies right away or some other mishap occurs, you’re not responsible for fixing it.
Does the contract include a cost escalation clause?
New builds are notorious for last minute surprises, but you don’t want to be on the hook financially if it happens. A cost escalation clause allows the builder to charge you for any unanticipated costs that arise as a result of necessary labor or materials. So, if lumber prices go up before the builder has purchased the materials for your flooring, or an unexpected delay adds a few weeks onto the build, you’re on the line for those costs. If you’d rather not deal with the stress of unanticipated costs, find a builder that doesn’t include a cost escalation clause in the contract.
Are there any homeowners’ rules or regulations?
Even if there is no homeowner’s association for the development, the builder may still set some guidelines as far as what’s allowed and what’s not on your property and/or development. For example, you may not be able to use a particular type of fencing or install a shed in your backyard. It’s better to ask this question early, so you know what to expect than to just move in.
Are there any financial incentives for using the builder’s preferred lender?
Some builders offer discounts on closing costs if you obtain your mortgage through a company that they have a relationship with. Ask if these sorts of incentives are offered, but don’t make your final decision about where to get your mortgage based on the discounts alone – you may still be able to find a better deal through other lenders. It’s still good to know however if there are benefits to working with the builder’s preferred mortgage company.
If it’s your dream to build a new construction home in Minnesota, go in to the process with an open mind and a clear idea of what you can expect. The more questions you can ask in the beginning, the less surprises you’ll potentially face in the future.
Be smart, ask the right questions, and at the end of the day (or fine, year) you’ll end up with a beautiful home built just for you.
If you’re looking to buy a new home in Minneapolis, Saint Paul, or the surrounding areas, please feel free to call, text, or email Shannon at your earliest convenience.
Shannon Lindstrom, Realtor®, AHWD, CRS, GREEN, MRP, VCA
RE/MAX Results
Direct: 612-616-9714
[email protected]
[email protected]
www.ShannonLindstromRealtor.com
www.ShannonLindstrom.info
