You’re ready to purchase a home. That’s great! Now it’s time for you to decide if you want a newly-built or previously built home, and you’ve chosen to build a new home, designed specifically to your needs and desires. But now you have a million questions. Here are four simple questions to focus on first.
How Much Can You Afford?
It’s important to know how much you can really afford to spend on a new home. Not only should you know what you are qualified for, but it’s important to know how it will affect your monthly budget and your quality of life. It’s also good to keep in mind that all pricing you see from the builders’ brochures are “base’ prices and that “standard features” vary from builder to builder. When thinking of your mortgage limits be sure to leave room for upgrades that are important to you (flooring, counter tops, and cabinets are the biggest upgrade budget eaters). A general rule of thumb is count on spending, at a minimum) at least 10 percent of the base price. Also, keep money aside for the things that will make your house your home like window coverings and landscaping.
Find a good local mortgage company and loan officer and get pre-approved for a loan. There are a lot of free tools that will give you a pre-approval range based on your income and credit score, but having a mortgage company get you a pre-approval notice will give you a firm understanding of your price range and down payment requirement. (Hint: Springboard has vetted mortgage companies and loan officers to find the best. (no, we don’t get kickbacks or commissions from them). That knowledge will go a long way to researching all of your options as to which builder and plans to get serious about. Keep in mind that there will be closing costs which can range in the thousands (which are never mentioned in the builder’s brochures). Many people use all of their money as a down payment often forgetting closing cost fees which can range in the thousands. (Hint: Springboard New Home Advisors can help you pay your closing costs freeing up more money for your down payment, or buying down the rate of your loan or simply keeping some of your savings.)
What is Your Priority – Space or Location?
Armed with accurate financial information you can tackle the next set of questions: What do you want? A bigger yard? More bedrooms? A home office? A closer commute? Perhaps you are wanting to downsize but not down-grade or looking for a secure, “lock and leave” type of place. Since you are making such a large financial decision that will affect every day of your life, take the time to vet all of your options. Product type, lot size, street-scape, community amenities and the monthly cost of those amenities. Is proximity to schools, places of worship, shopping and entertainment important to you? These are important pieces of the larger puzzle that is building a new home. (Hint: Springboard will help you sort this out with executive-level research that even the builder will be impressed with. You’ll be armed with knowledge giving you peace of mind.)
Do you need to move immediately? Do you have a house to sell? When is your lease up? Keep in mind that the build-time on a new home can range from 6 months to a year. Should you consider a spec home (houses that the builder has already started on their own)? Where are interest rates trending? Is it a “buyer’s market” or a “seller’s market”? Which home builders (if any) are offering incentives or discounts? Will you have built-in equity in your new home? (Hint: Springboard will help guide you through the maze and uncertainty of finding the fairest deal on your new-build).
An Inspection is Still Necessary
Chances are that one of the reasons you decided to go with a new-build is the peace of mind that construction defects would not exist. Protect your investment and your peace of mind with competent, professional and independent inspections. A newly-built home – no matter the price – is one of the few things left in our economy that is literally built by hand. Factor in a labor shortage among the subcontractors and mistakes and misses will be inevitable. We have been home builders – trust us – it will happen and it can be intimidating. That’s why it’s important to have an independent, trained set of eyes at the walk through. Plan on hiring a certified home inspector at around the 10th month post closing. They can give your home a professional inspection within the warranty period so that the builder can’t claim that you are outside any warranty items that need repair (Hint: As a Springboard client this service will be included).
We hope that if you’re looking at buying a new home anywhere in the Phoenix area, you think of Springboard New Home Advisors to represent you in your purchase. We’re realtors who provide guidance in buying from home builders. Plus we can save thousands by helping you pay your closing costs. We’re available 24 hours a day, seven days a week by phone. Call now to see how we can help you 480-227-2218.