Buying a New Construction Home: What You NEED to know

so you're buying a new construction home today we're going to be talking about what I talk about with my clients when they're buying a new construction home so for anyone new to the channel I'm licensed in 48 states and when I'm talking about new construction I'm talking about working with a builder who the Builder owns the land they're going to build the house and then your loan's going to close I'm not talking about construction loans okay so the first thing I always tell people when they're like I want new instruction I'm like great the first thing you need to do is Google the builders you're looking at and the word lawsuit mhm yeah look it up it's very interesting you know I've I think I said in a prior video I spend a lot of time on Reddit probably too much but what I'll see is I'll see someone that's that's showing a builder Nightmare and they're like look at this there's mold there's this or that then you go on a different Channel and someone's like hey has anyone ever heard about this Builder it's the same same one and you're like wow like a quick Google search literally will show you guys everything you need to see to make an educated decision now to be fair the biggest builders in the company in the country do most of them have lawsuits yeah they budget for it they budget for the lawsuits um so if you're looking at a bigger Builder what I've seen is that it's really Market by market there may be a certain part of the country where they're really good and that's tied into who's managing the instruction who the actual workers are and then there's other parts of the country where it's a train wreck and I think once again that goes down to who the workers are and who's managing them as someone who's dealt with two remodels I can tell you it is all based on who's managing them and who the workers are now the other thing's materials okay so you want to make sure that when you're doing your research you're going to Google the Builder's name the word lawsuit you're going to dig in you know really spend some time and most people are good doing this but sometimes they're like well I don't I don't really care you should care you should care because some of the stuff you'll see you'll be like hell no uhuh not doing it not doing it and I'll talk to specific real estate agents where they're like yeah I won't even show that Builder mm nope I don't want the problems down the line because they know that it's put together like crap I hate to say that but it's true there's some new construction because people assume it's new it's beautiful it's going to be better than something someone else already has lived in no guys it could be put together really really poorly you know sloppy construction is a real issue across the United States so you really want to be making sure you're paying attention so number one lawsuits um number two I would always say like if the development's already in place I would try to get on the homeowner's Facebook group there's always like a local Facebook group or something I would be trying to get all the dirt you know and sometimes you'll go on there and everyone's happy and there's barbecues and you're like I can't wait to move here and sometimes you'll go on there and you'll see that they're all plotting to do a construction defect lawsuit because they're having issues or they'll be saying oh yeah they haven't gotten back to me about the warranty that's the other thing people are like oh but it has a warranty guys a warranty is only good if someone actually honors it and when you start digging into a lot of this like spend some time on Reddit you'll see that sometimes certain Builders try to sweat people out and what that means is they try to push it past the timeline or they just don't respond at all yeah yeah it's like a real thing so I think that if you're doing new construction it can be a great experience but I do think you need to go into it doing your research and a lot of people buy new construction without ever doing a home inspection which I understand why because everyone's like well it's new it's in perfect no it's not it's not guys and that's the thing so if I was personally buying new construction I would have a home inspector go out there before I closed 100% And if they wouldn't allow a home inspector in no way would I buy that place and his zillion years what are they trying to hide why are they scared of a home inspector if everything's going to be new and perfect they should be fine with me choosing a home inspector to look at the property okay period make sure if you're negotiating up front that you're saying hey I'm going to want a home inspection I'm going to want to pick the home inspector I want this in the contract because I went down an Instagram Rabbit Hole recent I'm on social media a lot guys I'm here for you I'm researching and this inspector was doing this whole series about a big Builder that wouldn't let him on properties and I've seen his videos like the stuff he shows like yeah if I was the builder I'd be embarrassed but the fact that they're banning him tells me they're not looking at the videos saying yeah we should do a better job they're saying hey you're a troublemaker this is how we do stuff okay so definitely get a home inspection and I would say look before that home warranty is up get another home inspection so you know everything that's wrong so you can try to take advantage of that warranty now in terms of financing most Builders are going to have a preferred lender and they're going to be like oh if you use your lender we're going to give you so much money I have videos on this look sometimes you get a killer deal if you're getting a killer deal it's usually because they can't sell the house any other way it's that simple you know as people are like oh but Jen they're doing a 5% rate guys they're doing that because they can't sell the house at 6 or seven which tells you the house isn't actually worth what you're paying for it I know that's very disappointing for people to hear but that's the reality 2020 2021 2022 when the market was hopping Builder weren't giving away below Market rates you know they weren't giving out $60,000 in concessions you have to understand that what a builder is always trying to do is they're trying to keep the list price as high as possible the reason they want the list price as high as possible is because they have other houses they have to sell so let's say this one's 450 if they sell this one for 430 all these other houses are now at 430 right whereas if they sell sell this one at $450 and they give you $20,000 worth of curtain upgrades who the heck knows right then when these other houses if they can get people in at 450 and they don't have to give them anything or maybe they do they have this comparable sale at 450 is it really 450 I mean they had to bribe you with 20K of stuff so I would argue no but that's the way comparable sales work so I know it seems like I'm being very negative I'm not it's it's just you know there's so much like I'll see such a distortion of it especially on social media like I'll see some of the new home sales agents and they're like we just do all of this cuz we care and it's like Barbara I saw you two years ago like people were coming to try to buy a house and you slam the door in their face because you had too many buyers like this isn't your Vibe girl like I'm not buying it so as a buyer you just want to know what you're getting into like you don't want to end up and some mold nightmare where they don't honor the warranty they won't let your home inspector come you know Barbara said she's going to give you 20K towards all these different things but now you just found out it's for a shower curtain that Barbara picked up at Walmart on her way to work so you really want to be proactive with all of this so you know the Builder lender were always happy to look at their loan estimates for you guys and tell you like yeah that's great or yeah you can do better you know there is a lot of gamemanship with them um so look I am here to help you guys that is the stuff that I would suggest over what I've seen the last few years do I close meaning do I do loans on a lot of new home construction absolutely yes I do but I also making sure that my buyers have their eyes wide open because the last thing I ever want is someone to get into a house and be miserable I've done that you know I've bought that property that was a disaster it's horrible so I hope this video has been helpful do some of that research and if it all comes back good you can be confident in what you're buying and if it doesn't well you may have saved yourself a headache thanks for watching

Channel: Jennifer Beeston

Views: 4,694

Keywords: jennifer beeston, top mortgage originators, Guaranteed rate, mortgage lending, first time home buyer, real estate, VA loan, VA Mortgage, mortgage, home loan, financial education, mortgage lender, builders mortgage lender, New home, new construction homes, new construction home, buying new construction home process, pros and cons of buying new construction, new construction vs resale, benefits of new construction, new construction, dallas texas new construction homes

Id: RRHjjZbwQlc

Length: 8min 40sec (520 seconds)

Published: Thu Apr 11 2024