Considering new construction homes due to low inventory is a great option. Many builders use their own contracts and they look a little bit different.
What to consider when looking into new construction homes?
1- Look into the builder's reputation. There are many great builders out there to choose from, however doing the proper research may help when deciding who to work with.
2- Make sure you understand the contracts and what else is being added that may increase your closing costs. Many builders want the buyer to pay for the State Deed Taxes, usually paid by the seller. Some builders also requiere you use their title company or even their lenders.
3- Look into the quality of the build. I now that with new construction it may be tempting to skip the home inspection process. However, we never recommend waiving an inspection, not even for new constructions homes. Keep your eyes open and negotiate this.
4- Most builders offer an orientation for the buyer after having a signed purchase agreement. This orientation is very important and it gives the buyer the opportunity to ask for repairs if needed. Look at everything from the paint to the trim, quality of drywall work, finishes etc.
5- Buying new construction during the winter is great, but keep in mind that some items (mostly exterior) may not be finished by closing day. Builders escrow to finish these items as soon as the weather permits. Many cities have these requirements, and the builder may escrow with the city for completion.
6- Yes, there is a 10 year warranty for new construction homes. However, not all items have a 10 year warranty coverage. These warranties are imposed by law (Minn. Stat. ch. 327A) and they look like this:
a) During the one-year period from and after the warranty date the home shall be free from defects caused by faulty workmanship and defective materials due to noncompliance with building standards.
b) During the two-year period from and after the warranty date, the home shall be free from defects caused by faulty installation of plumbing, electrical, heating, and cooling systems due to noncompliance with building standards.
c) During the ten-year period from and after the warranty date, the home shall be free from major construction defects due to noncompliance with building standards.
7- Most newly built homes are sold with an unfished basement, but there are some options with finished basement available. Remember you are paying for finished square footage. Check the numbers.
8- You need a real estate agent even for new construction. Work with an agent familiar with new construction, this will ensure that steps won't be missed and that everything is done properly. You want someone by your side and representing you, someone that works for you and that you won't get stuck with "what the builder thinks is best " or an unfair deal.
Cities in Minnesota with new construction homes under 400k within 40 miles from the cities: Otsego, Saint Michael, Saint Francis, Zimmerman, Big lake, Anoka, Isanti, Cottage Grove & Farmington.
Some great options out there! Contact me for more information.
Maria Susana Huntwork
Realty Group Inc.
612.322.01322
mariashuntwork@mnhomemaster.com