Hey everyone! We are back today with the next step to the process of buying New Construction: Deciding on your homesite and builder!
There are three types of new construction: spec (short for speculation) homes, tract (or production) homes, and custom homes.
Spec Homes: Homes “built on spec” means the builder has purchased a single lot and built a home on it not knowing who will purchase the home. Typically, the builder will list the home with a real estate agent to market and sell. Since the home is usually finished, or almost finished, when it goes on the market, the buyer does not have the opportunity to make changes in features.
Tract Homes: Tract homes are homes built in a development where all the homes are built around the same time, or in phases, by the same builder. The builder has selected floor plans and uses the same features in each model. Often buyers can purchase a tract home prior to completion, in which case they may be able to make changes in the features within the builder’s budget or for an upgrade fee.
Custom Homes: When the buyer purchases their land and then contracts a builder to build a home of their choosing, they are building a custom home. The buyer chooses their floor plan, or has an architect draw one for them, and chooses all of the features, sometimes with assistance from the builder or an interior designer.
Here are some things you need to consider on choosing the neighborhood or development where you build include:
· Who is the builder(s) for a planned development?
· What are the builder’s deed restrictions, and how many years are those in effect?
· Is there, or will there be, an HOA?
· Are there, or will there be any community amenities?
If you are looking at a planned development, find out if there is one builder or if the developer allows you to bring in your own builder. If you are looking at building on a lot that is not restricted to a particular builder, it’s important to research builders in your area to find one that is reputable and stands by their work.
Unfortunately, some builders fail to deliver on their promises, cutting corners on materials, or even failing to finish certain details. Meet with different builders before you make your selection.
It’s important that they are organized and communicate well. Make sure the builder has someone that is communicating with you through every step of the build so you know when your choices must be made and when each phase will be completed.
Check out your builder before signing anything. Find out if there are any complaints registered against them and ask for references from other homeowners. Find out if you can tour a model or a recently completed home and bring someone who can judge the quality of the workmanship.
I’ve compiled a list to ask your potential builders before hiring them, Visit the link in my bio! Stay tuned for step number 3!
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