FEATURED LISTING: 1090 Griffith Ln, Brentwood, CA 94513

1090 Griffith Ln, Brentwood, CA 94513

$885,000

5 beds 4 baths 3,080 sqft

Charming, comfortable and spacious single story by Pulte in the Botanica development built in 2017! Large living, dining and family rooms with a pleasant decor. Neutral throughout with appealing tile flooring. Very open granite kitchen with farm style sink and goose neck faucet. Large island doubles as a breakfast bar and serving counter. Gas cooktop, stainless steel oven and microwave for the culinary enthusiast. Also included are deep, pull-out drawers and a large walk-in pantry. Enjoy morning coffee in the cheery breakfast nook overlooking the back yard. The lovely master suite is complemented with its luxurious bath. The four secondary bedrooms can also have multiple uses, serving as an office, media room or any other need to complete any other lifestyle. For your convenience, there is also an electric car charger. This a great find for a beautiful home!!

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7 Risks of Selling a Home Without an Agent

Selling a home is undoubtedly an expensive endeavor, but it can be even more costly if you go it alone. Without the help of a real estate agent, you could find yourself making some expensive mistakes and missing out on lucrative opportunities.

Sure, agents charge commissions, which is the main reason why sellers might consider selling their homes on their own. But there are plenty of reasons why they shouldn’t, and here are just a few.

1. You’ll Waste a Lot of Time

Selling real estate is a full-time job. It’s not something that can be easily or successfully done when doing it a few hours on the weekend or whenever you have the time. Instead, selling homes requires full-time attention, which you likely don’t have time for.

It’s a widely-held misconception that selling properties is just a simple matter of putting up a few images and description of the property online and waiting for the offers to roll in.

Instead, selling real estate requires a lot more time and effort than the average person may not realize. There is a ton of work that goes on behind the scenes, and it can be extremely time-consuming.

Unless you are a full-time agent yourself, you likely won’t have enough time in your schedule to dedicate to all the ins and outs of selling your home. In this case, your best bet is to leave it to the professionals to handle it for you.

2. You Might Not Present Your Home Appropriately

It’s one thing to clean up your house and keep it tidy while it’s on the market, but it’s quite another to understand the buyers in your area and know what they’re looking for in a home. Professionals know the buyer demographic in the areas they work in. Using that information, they can effectively guide homeowners in prepping their homes in such a way that it is more attractive to a larger pool of buyers.

At the very least, your home should be neutralized and de-personalized, which means eliminating any personal artifacts and decorating in colors that more buyers would be attracted to. Real estate agents either know how to do this on their own or have connections with professional home stagers who do this job for them.

As a home seller, will you know exactly what to do to make a positive impression on buyers? If not, you’d be better off having a seasoned realtor help you to ensure this impression is a good one.

3. You’ll Have Far Less Marketing Reach

How exactly will you get the word out there that your home is listed for sale? Sure, you can put some images on free websites out there, or even paid ones. But are you able to advertise your home across several websites and social media channels to attract buyers and their agents on a local and even national level? 

Real estate agents have the knowledge and experience with using specific marketing tactics and analytics to ensure your listing is communicated to a targeted audience. They’ll know which type of print media would be appropriate for your listing in order to maximize every advertising dollar spent. They’ll know exactly which type of images will produce the greatest amount of attention.

Real estate agents are also able to access to the Multiple Listing Service (MLS), which is a database of properties on the market. It’s managed for real estate agents, by real estate agents who pay a fee to have access to it. The MLS offers the largest database of homes on the market, and since all paying realtors have access to it, your property will get a lot of attention if you are represented by a realtor.

If you go it alone, your marketing reach will suffer a great deal, which can have a negative impact on your ability to find the right buyer who is willing to pay what your home is worth.

4. You’ll Miss Out on an Agent’s Extensive Network

Agents know other agents. They might know of an agent who is representing a buyer looking for a home just like yours. They’ve always got their fingers on the pulse of what’s happening in your market and can use the connections they have with other professionals in the industry to help make a sale happen.

Real estate agents also network with related experts in the field, such as photographers, home stagers, lawyers, home inspectors, contractors, and mortgage specialists who can all play a role in a real estate transaction.

If you don’t work with an agent, you’d likely be missing out on this extensive network of professionals that can make your sale a lot smoother.

5. Your Emotions May Get in the Way

It’s not uncommon for sellers to be emotionally charged when selling their properties. Many sellers have a tough time detaching themselves from their homes, and these emotions can get in the way of a successfully negotiated deal.

To sellers, properties are homes where they’ve built memories. Dealing with the emotions involved in putting their home on the market can prove to be difficult.

If you allow your emotions to get the better of you, it’s possible that the sale of your home will suffer. That’s why it’s always best to have a professional real estate agent act as a buffer between you and the buyer. That way all negotiations will be handled in a professional manner without allowing any emotions to cloud the process. 

6. Your Negotiation Skills May Not Be Enough

Once you receive an offer from a willing buyer, will you know how to respond to it? Will you know what to look for in an offer to make sure it’s a good one? Are you savvy when it comes to working with buyers and knowing what it takes to ensure a meeting of the minds?

This is where a seasoned real estate professional can be extremely useful. Agents have the skills and experience negotiating real estate deals to make sure their clients’ best interests are protected while working with buyers’ needs to result in a successful deal. Negotiations can be an intricate process, which is why you’d be in a better position if you have an agent working in your corner to achieve the outcome you’re looking for. 

7. Your Listing Price May Not Reflect the Current Market

As a seller, you obviously want the most money for your home, but you’re not going to get it just by listing your home at a random high price. Getting top dollar for your home requires careful strategies, one of which includes choosing the right listing price. In fact, it’s the listing price that plays the most important role in a real estate transaction.

If you price too high, you’ll scare off prospective buyers. In turn, your home will sit on the market, wasting valuable time. The longer it sits on the market, the more of a stigma it will gain. Buyers will start to wonder what’s wrong with the home, and you may be forced to reduce your listing price at some point in the future.

That’s why picking the right asking price is so important. Do you know how to come up with the right price? What type of resources will you look at to help you determine this crucial number?

It’s not enough to simply look at what other homes in the area are currently listed at. What they’re asking for doesn’t necessarily reflect how much they will realistically get. Not only that, you need to make sure you’re comparing apples to apples, as the listing price of a home that’s dissimilar to yours won’t give you much to go on.

Real estate agents will be able to conduct research on similar homes in the area that have recently sold to come up with a listing price that accurately reflects the current market. By doing so, you’ll be in a better position to attract prospective buyers in your area and sell your home sooner rather than later.

The Bottom Line

Going solo when selling your home is a big mistake, and you’ll likely realize that shortly after listing without an agent. Trying to sell your home without a professional isn’t the best way to try to save some money on real estate commissions. Instead, a real estate agent can be your best ally when it comes to getting the most out of your transaction.

Should Sellers Have a Pre-Listing Home Inspection Done?

Home inspections are typical in a real estate transaction. After all, buyers want to know exactly what they’re spending all their money on and will usually want to order a home inspection before they commit to the home.

But as common as home inspections may be after an offer has been accepted, they’re not always the first thing sellers think of as a pre-listing task.

The question is, should you invest in a pre-listing inspection before your home hits the market? Or should you just wait until the buyer orders one after an offer has been accepted?

There are specific advantages to having a home inspection done before listing your home for sale, including the following.

You Might Actually Save Some Money

Sure, an inspection will cost you a little bit of money up front, but if you end up discovering certain issues that call for repairs, it might actually save you some money when all is said and done.

That’s because buyers will be more likely to renegotiate and ask for a price reduction if they discover a problem after their own inspection has been conducted. Or, they could request a credit to cover the cost of the repairs. If you can rectify any issues before the buyer discovers them, you may actually end up saving a little bit of money.

It Might Help the Deal Close Faster

If you are proactive about uncovering any problems with your home and making the necessary repairs before you list, you could help move your transaction along after offer acceptance. Several things can drag out closing, including issues with a home inspection.

Rather than deal with these problems during escrow, you can get them out of the way before marketing your property for sale. Having a pre-listing inspection done and fixing any issues can speed the process up and help avoid any extended negotiations.

You’ll Identify Issues to Rectify Before Buyers Do

It would be much better for you to know about any potential flaws in your home before buyers do. Having your home inspected before a buyer’s inspector scopes the place out can help you avoid any unpleasant surprises.

One of the biggest stresses for sellers is waiting to find out what buyers’ inspectors have discovered about their homes. These are valid concerns, as many real estate deals fall through as a result of an unsatisfactory inspection report.

Instead of waiting for the buyer’s home inspector to find out the condition of the property, sellers can take a proactive approach and find out first. That way they can get a head start on making arrangements to have issues remedied if necessary, which brings us to our next point.

You’ll Have Time to Make Repairs

If buyers find out about problems with a home after an inspection has been done, they have several different choices to make: they can either walk away from the deal, renegotiate for a lower price, ask for credits to cover expenses related to making repairs, or ask the seller to take care of the repairs before closing. In terms of the latter, sellers can find themselves scrambling to make the repairs to make sure they’re done before the closing date arrives.

With a pre-listing home inspection, you can take your time making the repairs without having to rush.

Buyers Will Look More Favorably on Your Listing

A home in good condition will leave a better impression on buyers, which can help boost the odds of a solid offer coming in sooner rather than later. If you’ve managed to uncover certain issues and deal with them beforehand, your home will be in better shape for the market.

Not only that, having a pre-inspection in hand will show buyers that you’re serious about selling and are willing to take whatever measures are needed to offer a quality home to a willing buyer. This will help make buyers feel more confident about your home and be more certain about putting in an offer.

Are There Any Cons of Pre-Listing Inspections?

Although there are definitely some benefits to having your home checked out by a professional before the first buyer walks in, there may be some cons to think about:

They cost money – While you may be able to save some money in the long run by having a pre-listing inspection done, they still require upfront spending. Inspections can run anywhere between $250 to $500, depending on the size and condition of the home, as well as your location.

You’ll be on the hook to disclose known issues – In California, sellers are legally obligated to disclose all known issues with their properties to buyers. Once you have an inspection done and issues are uncovered, you have a responsibility to communicate them to buyers, which could make it harder to sell your home.

You’ll likely have two inspections done – While buyers will certainly appreciate your proactive approach to inspecting your home before listing, they’ll still probably want to have their own inspection done. It’s always possible for your inspector to have missed something, only to have the buyer’s inspector discover it.

The Bottom Line

The decision to have a pre-listing inspection conducted before you put your home on the market is solely a personal one. There really is no right or wrong answer, as having one done has its potential advantages and disadvantages. Chat with your real estate agent about the possibility of having an inspection done before listing, and see if it’s the norm in your particular market. If it is, you might want to at least consider it, but only do so on the sound advice of your realtor.

How Much Notice Should Sellers Request Before Showings?

When you put your home on the market, expect to have a lot of strangers visit. After all, buyers will obviously want to check out your home in person before deciding if it’s the one for them.

But it would be very unpleasant to have someone book a showing at the last minute, leaving you scrambling to get the house in order and make plans to be out of the house for the next hour or so. That is, unless, your home is vacant and you’ve already moved out. In that case, buyers should be free to schedule a showing any time, as long as it doesn’t overlap with another showing. In this case, they can get their realtors to access your home via a key in a lock box on your property.

Otherwise, you should be given a reasonable amount of notice before a buyer shows up for a scheduled viewing. That’s why it’s important to specify how much time is required before showings directly in your listing description. That way buyers and their agents will know exactly when they can expect to see your home after making an appointment.

That said, how much notice is appropriate before you allow buyers to show up? Not enough time will leave you with a very tight window to clean up and get out, while too much time can frustrate buyers and even result in a lost lead.

So, how much notice is considered reasonable when you’ve got your home on the market?

What Happens if You Ask For Too Much Notice?

If you happen to be in a market where homes are snatched up just as fast as they’re listed, then you could be doing yourself a major disservice if you ask for way too much notice before allowing a showing. If a buyer is able to book some showings for other homes before your window, you might lose out on a potential buyer.

As a seller, you really need to carefully consider how much time you realistically need to get ready for buyers. Ideally, your home should always be in showing condition, ready for last-minute showings. That means your home should be clean, free of clutter, and freshly scented. Sure, this can be a real pain, but it can mean the difference between snagging an interested buyer and missing out on a potential deal.

As far as a reasonable amount of notice is concerned, any more than a few hours is probably too much. In general, 24 hours or more is simply far too much notice for buyers to have to provide. Usually, buyers will see a listing they’re interested in and want to book a showing that same day. If you’ve got a 24-hour notice in place, that same buyer could skip over your home and look for another property that is available to be seen with shorter notice.

Buyers usually book a series of showings one after the other, and but listings that require too much notice can make scheduling these showings a nightmare. Essentially, asking for too much notice will simply make it more difficult for buyers to see your home and will throw an additional obstacle in front of them. It may seem irrational from the perspective of the buyer to have to give sellers so much time to get ready for a showing.

What is Considered a Reasonable Amount of Notice?

Generally speaking, 24 hours’ notice is simply too much. Even 12 hours may be considered too long for buyers to have to wait before being able to schedule a showing. Of course, there may certain situations whereby more notice will be needed, such as if there is a tenant living in the home who requires advance notice of their home being shown. In this case, the owner is obligated to provide 24 hours’ notice to their tenant before a prospective buyer can show up.

However, under normal circumstances, anywhere between 2 to 4 hours should be enough to time to put a few things away and get yourself out of the home before the buyers arrive. If you’re at work or are already out for the day, you should always leave your home in showing condition before you leave in case a showing is booked while you’re out. It would be a major hassle to have to run back home to prep the place if a buyer requests to see your home during the time that you’re away.

At the end of the day, you want to be competitive in your market. Take a look at other listings in your area and see what appears to be the standard amount of notice required. If 12 hours is the norm, then perhaps that might be a reasonable amount of time to ask for. If you’re asking for far more time than any other seller on the block, you’ll lose your competitive edge.

The Bottom Line

There’s no rule written in stone that dictates how much notice you should request buyers to give before scheduling a showing. But it’s important to keep in mind that more notice will likely have an impact on the number of showings you end up booking, which can inevitably impact a sale. Before you decide on a time frame for notice, be sure to consult with your realtor and heed their advice about how much notice you should request from interested buyers.

SALE PENDING W/MULTIPLE OFFERS!

165 Winged Foot Pl, San Ramon, CA 94583

$1,359,000

4 beds 4 baths 2,871 sqft

A single story stunner beyond compare! Remodeled and redesigned with elegance and class. Every detail has been carefully crafted to please those of discriminating taste. Not your typical remodel!! Located in a desirable San Ramon neighborhood overlooking the tenth fairway of the San Ramon Golf Club with pleasant and peaceful vistas in a wooded setting. This “dream home” features heightened ceilings, an abundance of natural light and gleaming Brazilian cherry wood floors. The living and dining rooms are adjacent to the open kitchen, providing a great room concept. The granite kitchen includes a complementing glass tile backsplash, cherry wood cabinets with several glass inset doors and top-of-the-line appliances. The large master suite includes a 2-way fireplace, walk-in closet with built-ins and luxurious bath with a steam shower and heated floors. In addition, there is a guest suite, media room, an office, an exercise room and a laundry room. Beautiful grounds with a pergola and stamped concrete.

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6 Reasons to Come Up With a Large Down Payment

Buying a home is undoubtedly a massive purchase that requires a substantial amount of money up front in the form of a down payment. But it can be tough to come up with a lump sum of money. As such, many homebuyers choose to buy homes with minimum down payment amounts, such as 5% down, 3.5% down, and even 0% down in some cases.

But there are a number of benefits associated with coming up with a larger down payment. By putting 20% down on a home purchase, you’ll have plenty of benefits to take advantage of. Here are some reasons why coming up with a large down payment for a home purchase will work to your advantage.

1. Avoid Paying Private Mortgage Insurance (PMI)

If your down payment is less than 20% (for a conventional mortgage), you’ll need to pay Private Mortgage Insurance (PMI). This amount is typically added to the monthly mortgage payment and is required by lenders to reduce their risk should you ever default on your loan payments.

This can be a big chunk of money added to your monthly payments. The amount added to your payments will range from 0.5% to 1% of the property value annually, depending on how much you actually put down. This can add up to thousands of dollars spent on mortgage insurance every year.

For instance, you could be paying as much as $3,000 a year – or $250 a month – based on a 1% PMI fee on a $300,000 mortgage. That’s a lot of money, and can add up very quickly over the term of your mortgage. If you’re able to come up with a hefty 20% down payment, you could be saving all that money year after year.

2. Reduce the Loan Amount

The less you have to borrow, the less you have to pay back. It’s that simple. You can effectively reduce the amount of money you need to borrow to finance a home purchase by coming up with a larger down payment. And the less money you have to take out, the smaller your monthly payments will be.

Let’s say you agree to buy a home for $500,000. If you put down 20% – or $100,000 – you’d have to borrow $400,000. If, on the other hand, you only put down 5% – or $25,000 – you’d have to borrow $475,000.

A $400,000 mortgage at 4% (assuming a 5-year, fixed-rate mortgage) would translate into monthly payments of $2,326.42, while a $475,000 mortgage with the same rate and terms would require $2,762.62 in monthly payments. That’s a difference of $436.20 per month, or $5,234.40 a year.

Borrowing less money obviously means that you’ll have less to pay back, leaving you with more money left over to spend on other things, including saving up for retirement.

3. Pay Your Mortgage Off Faster

Nobody wants to may a mortgage forever. That’s usually not the plan. Every mortgage is set up so that there is an end date at which point the entire mortgage amount will be paid off in full. It should be your goal to pay off your mortgage at some point in the future; ideally, the sooner the better.

Imagine the savings you’d realize if you no longer have a mortgage to pay. All that money going towards those mortgage payments could be put to much better use.

You can realistically pay off your mortgage a lot faster if you have less money to pay back. By putting down a significant down payment, you can effectively reduce the amount you need to borrow and subsequently reduce the amount of time needed to fully repay your mortgage balance.

4. Increase Chances of Mortgage Approval

Coming up with a large down payment shows lenders that you have the financial capacity to afford a home purchase. Not only does a big down payment amount reduce the amount you have to borrow, it also shows lenders that you’re able to save, which goes a long way for your creditworthiness.

Since a higher down payment reduces the loan amount, your loan-to-value ratio (LTV) will be lower. Lenders use your LTV for lending risk assessment purposes before approving or rejecting a mortgage. It basically represents the total loan amount relative to the value of the home you agreed to purchase. If your loan amount is a lot lower than the property value, your LTV will also be lower, which makes you less of perceived risk to a lender.

Ultimately, a larger down payment can help boost your odds of mortgage approval, which is exactly what you’re aiming for.

5. Improve the Chances of Getting a Better Interest Rate

In addition to increasing the chances of getting approved for a home loan, a larger down payment can also help you secure a lower interest rate. Lenders tend to offer lower rates to borrowers who present less of a risk to them, and coming up with a big down payment can place you in that category.

Lenders prefer to lend to borrowers who take out smaller mortgages. That’s because they’ll have a better chance of selling the property for more than what was borrowed should the borrower default and end up in foreclosure. As such, lenders will usually offer low-risk borrowers a better interest rate, and a lower rate can translate into tens of thousands of dollars in savings over the life of the loan.

For instance, a 4% interest rate on a $400,000 mortgage will require far less interest payments than a 6% rate on the same loan amount. At the end of a 25-year amortization period, you would have paid $372,927 based on a 6% interest rate compared to $233,309 with a 4% rate. That’s a difference of $139,618!

There’s no doubt that a lower interest rate can save you a ton of money at the end of the day, and a bigger down payment can certainly help.

6. Boost the Odds of Winning a Bidding War

The California real estate market continues to sizzle, and as such, multiple-offer situations are the norm. If you find yourself in this position as a buyer, you’ll need to ensure that every aspect of your offer is as strong as can be in order to come out the winner. While there are plenty of important factors that go into a strong offer, one of them is a large down payment.

Sellers will likely look favorably on bidders who are able to come up with a sizeable amount of money to be put towards the purchase price of the home. It shows a level of seriousness to buy, as well as the financial capability to secure a mortgage.

Failure to secure a mortgage is one of the biggest reasons why real estate deals fall through, and sellers don’t want to risk ending up having to get back in the market after a failed transaction. If you’re able to come up with a bigger down payment, you’ll be perceived as a strong buyer in the eyes of a seller, which can be particularly beneficial during bidding wars.

The Bottom Line

There are obvious financial perks that come with larger down payment amounts. Ultimately, you’ll be able to increase the odds of securing a mortgage, pay less every month, and pay your mortgage off faster. Of course, saving up for a hefty down payment can take a while, but it might be worth the time and effort based on the benefits you’ll be able to afford.

What Are HOA Transfer Fees and Who Pays For Them?

Whether you’re buying or selling a condo or other type of home governed by a homeowner’s association (HOA), there are few extra considerations that need to be made compared to the average freehold home.

No matter what type of home you buy or sell, there will definitely be a list of closing costs that you’ll have to pay. And when it comes to homes governed by an HOA, there may be HOA transfer fees to pay on top of all other closing costs.

HOA’s are responsible for managing the housing development and collecting fees from all homeowners in order to cover the costs associated with the community’s upkeep. They also establish and enforce a set of regulations that are meant to maintain the value of the community, and all homeowners are required to abide by them.

Among the rules that HOA’s may have in place are HOA transfer fees, which might have to be paid when a unit in an HOA is sold and thereby transferred to a new owner. But what exactly is this transfer fee, who pays it, and why does it have to be paid at all?

What Are HOA Fees?

HOA transfer fees are actually standard fees that may occur when a property is transferred from one owner to another. They are meant to cover the costs associated with preparing documents, handing out HOA’s rules to the new owner, dealing with property inspection records, changing names in the homeowner databases, changing security codes, creating new security cards, and other administrative costs.

How Much Do HOA Transfer Fees Cost?

HOA transfer fees vary from one community to the next and are established by HOA management. These costs are charged based on the specific types of services that the HOA provides to both buyers and sellers involved in a transaction. That said, these specific types of fees typically range between $100 to as much as $1,000, though the average is somewhere around the $250 mark.

While it’s the HOA that determines the cost of transfer fees, state laws can come into play to regulate them. For instance, California state laws only allow HOA’s to charge transfer fees for costs directly associated with gathering, copying, and distributing documents.

Buyers and sellers should be aware that HOA transfer fees aren’t always included in real estate contracts. That’s because it’s not a term that can be negotiated between the two parties as it’s a fee that is mandated by the HOA.

Having said that, HOA’s are sometimes required to disclose these transfer fees to all parties prior to the sale. In California, HOA’s must make certain disclosures to buyers and are required to provide an estimate of the transfer fees within 10 days following a request for disclosure documents. Buyers and sellers would be well-advised to get in touch with the HOA management team to find out about any transfer fees that may be charged.

Who’s Responsible For Paying HOA Transfer Fees?

In California, HOA transfer fees are usually the responsibility of the seller and are added to all the closing costs when escrow is complete. However, there may be cases where the buyer is billed for this expense.

It’s important for both buyers and sellers to determine who will be responsible for paying this transfer fee in order to budget for all closing costs accordingly.

The Bottom Line

It’s not uncommon for buyers and sellers to be surprised by certain costs by the time their real estate deals close, and HOA transfer fees can be one of them. Don’t let these fees come as a surprise to you and make sure you do your due diligence, no matter what side of the real estate playing field you happen to be on.

FEATURED LISTING: 165 Winged Foot Pl


A single story stunner beyond compare! Remodeled and redesigned with elegance and class. Every detail has been carefully crafted to please those of discriminating taste. Not your typical remodel!! Located in a desirable San Ramon neighborhood overlooking the tenth fairway of the San Ramon Golf Club with pleasant and peaceful vistas in a wooded setting. This “dream home” features heightened ceilings, an abundance of natural light and gleaming Brazilian cherry wood floors. The living and dining rooms are adjacent to the open kitchen, providing a great room concept. The granite kitchen includes a complementing glass tile backsplash, cherry wood cabinets with several glass inset doors and top-of-the-line appliances. The large master suite includes a 2-way fireplace, walk-in closet with built-ins and luxurious bath with a steam shower and heated floors. In addition, there is a guest suite, media room, an office, an exercise room and a laundry room. Beautiful grounds with a pergola and stamped concrete.

$1,359,000

4 Beds | 4 Baths | 2,871 SqFt

VIEW FULL LISTING

9 Things to Know About Buying Pre-Construction Homes

There are obvious perks to buying a brand new home; namely, new materials, the ability to customize to your liking, and the potential to buy at pre-construction prices. But as convenient as new home construction may be, there are certain things that buyers should be wary of when buying a new home from a builder.

Understanding all the ins and outs of buying pre-construction can help you make a more informed decision before being bound by the contract.

1. You’ll Need a Hefty Down Payment

When you purchase a resale home on the market, you can put as little as 5% down for a conventional mortgage (with private mortgage insurance), and even 3.5% for government-backed mortgages. But buying new home construction with a builder will require you to put a bigger down payment towards your purchase, typically as much as 20% or more of the final purchase price.

That said, the down payment isn’t usually due all at once. Typically, builders require buyers to submit a 5% deposit upfront, then pay the remainder in increments over the course of the next year or two. If you’re buying new home construction, be prepared to dish out a larger down payment for the property.

2. Delays Are Commonplace

When you buy a new home with a builder, your contract should stipulate the completion date of construction. However, it’s very common for these completion dates to get pushed out a few times and by several months or more.

It should be no surprise that anything can happen to cause delays in the completion of construction. Even still, delays can be frustrating for buyers who have already made plans to move in by a certain date.

While delays with new builds are common, it would still be in your best interests to do some research on the builders that you’re considering buying from to see which ones have a habit of experiencing delays versus those who are pretty good at sticking to their schedules. Some builders are just better than others at foreseeing potential delays and taking steps to reduce their occurrences.

3. There Could Be Hidden Costs Involved

In addition to the deposit and purchase price spelled out in the purchase contract, be wary of plenty of other hidden fees that might not come up until well into construction. It’s possible for buyers to get hit with a ton of surprise closing costs, such as development charges and levies. These extra expenses can cause the overall price to soar.

Do your best to be diligent when inquiring about any extra charges that are likely to pop up right before closing so you can budget appropriately. If possible, set a limit of how much you are comfortable with paying from the onset so you don’t wind up stuck with a contract that will cost you more than what you expected. Ideally, these extra fees shouldn’t end up costing you any more than 2% of the purchase price.

4. Model Homes Are Usually Filled With Upgrades

The model home is probably what prompted you to buy from the builder, thanks to all the fancy upgrades and finishes that are typically used to create a stunning home. But don’t be lured into making a purchase after being mesmerized by the model home. Many of the finishes used in model homes are upgrades, which means they’ll cost extra.

Find out exactly what finishes and materials come standard with the home purchase versus those that are considered an upgrade and will require additional expenditures. It’s crucial that you fully understand what you’ll be getting with the base price and how much you would have to spend to get certain finishes that don’t come standard. Calculate exactly how much any upgrades will end up costing you so you work with a price that you’re comfortable with and won’t be unpleasantly surprised.

5. Builders Don’t Like to Negotiate on Price

It’s commonplace for buyers and sellers to negotiate on the price of resale homes, but builders typically expect to be paid the quoted price of their homes. They’re not in the habit of wheeling and dealing with buyers, because if they do, that will open the floodgates to more negotiations with future buyers, which they would much rather avoid.

That said, you can still try to lower the overall cost of the home purchase by asking the builder to cover some closing costs or throw in an upgrade or two. Builders may be more open to negotiating in this way while still keeping the purchase price as is.

6. The Home Should Be Inspected When Complete

Just because you’re buying a brand new home doesn’t mean it shouldn’t be inspected before you take possession. Even though new homes are often required to pass inspections from the municipality, you might want to bring in your own home inspector to check the place out in addition to the final walk-through that builders generally allow just before closing.

7. Not All Warranties Are All-Encompassing

New homes usually come with a warranty from the builder, but that doesn’t mean that the warranty you get covers absolutely everything. Many components of new homes come with their own warranties from contractors and manufacturers, such as those for windows, doors, HVAC systems, and so forth. In this case, you’d have to deal with third parties if issues arise. It’s important to find out exactly what is covered and when those warranties expire. 

8. Other Surrounding Developments Can Pop Up in the Future

Just because there may be greenspace surrounding the home you buy today doesn’t mean there won’t be other structures built some time in the future. Be aware that future developments surrounding your home and subdivision can be built, which could impact your enjoyment of your home if you’re not prepared.

Builders don’t necessarily have to tell you about what plans might be in the forecast, so it’s up to you to either find out if there are plans in the works for other developments or simply accept whatever pops up in the near future.

9. You Should Get Your Own Real Estate Agent

Builders typically have their own team of agents who are responsible for sealing the deal with buyers, but that doesn’t mean you have to go in it alone. Instead, you’d be well-advised to hire your own real estate agent to represent you in order to ensure the contract you enter is a sound one. The builder’s agents represent the builder, not you. That’s why you should have your own representation to look after your best interests.

A real estate agent can guide you about which features you might want to add for resale purposes. They’ll also be able to help you identify which features come standard versus those that are upgrades and come at an additional cost.

The Bottom Line

Buying a brand new home from a builder can afford you with the benefit of being able to customize the home to your tastes and not have to worry about repairing or replacing any materials or systems anytime soon. It’s also a great opportunity to buy at pre-construction prices and build some equity by the time the closing date arrives.

But buying pre-construction doesn’t come without its downsides. The earlier you’re made aware of certain potentially negative aspects of buying pre-construction, the better able you’ll be to make a sound buying decision.