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10 Questions to Ask When Building New

New builds are the Angelina Jolie of home buying: glamorous, alluring, sexy and perfectly-coiffed, but at the same time, inscrutable, unpredictable, prone to man-stealing and potentially not worth the high paycheck. When you first see them all dressed up for the Oscars looking like the unattainable fantasy of all men (and 75% of women), those model homes are hard to resist. It’s important to keep in mind, however, their history of wearing blood in a vial on a necklace and that time they passionately kissed their brother at a televised award show. These things can influence your decision, is all I’m saying.

Here’s how a visit to the new build models has a tendency to go:

The large colorful signs and banners draw you in on your way home from lunch Saturday afternoon. You may not even be seriously considering purchasing a new build. You might not really be in the market for a new house. That won’t seem to matter when you glimpse the circus-like atmosphere of the model home center. It’s inviting and fun. They’re begging you to stop by. Why not just take a look?

You walk in the door to the sales office and are immediately inundated with floorplans, color choices and a subdivision layout all over the walls. There’s a smiling, friendly salesman who acts so familiar you wonder for a split second if you already know him from somewhere, but you don’t.

You’re struck dumb. It’s sensory overload. You know these houses and the things in them must cost money, but you don’t see prices anywhere. You become tense at the possibility that it’s wildly out of your price range. What if you ask about the prices and they’re embarrassingly far out of your financial universe? That would clearly be humiliating and should be avoided at all costs, you decide.

You throw out a test question: Do you have a list of what’s available? The smiling agent turns to you and pauses. You see a deadness in his eyes. The silence is just long and awkward enough to make you realize how stupid you are for asking something like this. The answer must be utterly obvious, but you don’t know what it is. It was a terrible, stupid question. The sales rep finally answers, Well, why don’t you tell me what you’re looking for and I’ll let you know what we have that would work for you. This is where you conclude you should just let the agent tell you what he wants to and avoid all uncomfortable conversations.

By the time you’ve left the new build office, two hours later, you think you’ve agreed to something, but you’re not sure what. You registered and signed your name on some document, but it was only presented to you long enough for you to scrawl your signature and then was whisked away. You remember remarking that a 6 bedroom, 8 bath home with a basement and both and indoor and outdoor swimming pools was a nice house and you wonder if you’ve agreed to buy it. The agent seemed really excited when you said you liked it. And you’ve got free bottles of water in your hands. That has to mean you’ve purchased something.

It doesn’t have to go like this. Don’t be afraid to ask the sales agent specific questions. He’s the dumbass, not you. To help you navigate the reality of buying a new build house, I put together a list of 10 questions you should never be afraid to ask.

1.    What is the average build time?

This will vary depending on the builder, the market and the availability of materials, but you can expect an answer of anywhere from 90 days to 8 months.

2.    Do you have any available specs?

A spec home is a newly built house that’s already had everything in it picked out by the builder and constructed. These are also referred to as ‘inventory homes’. They are usually ready to close in 30 days and they have a set price.

3.    Is there a lot premium?

New build pricing can be ridiculously confusing. There is usually a price range each floorplan ‘starts at’ (the range is for the different elevations), and then the upgrades increase the price from there. With some new builds all of the lots will have a cost or a ‘lot premium’. This will be higher if the lot is larger or in a better location. With other builders only the really great lots have a lot premium.

4.    What is the average amount people are spending on upgrades?

The builder isn’t going to be able to tell you how much you’re going to want to spend on upgrading the counters and the flooring and what have you, but usually the sales rep can give you an estimate of what other buyers have spent. This is sometimes in the form of a percent. So, if they tell you the average buyer is spending an extra 10% on upgrades, and the house you’re considering ‘starts’ at $300K, then expect to be up between $330K and $350K when all is said and done including upgrades and lot premiums, elevation and the like.

5.    How much earnest do you require?

Every builder will have a different amount required at the time of writing the contract to secure the lot and start the building process. This is usually not a negotiable figure. It’s also not usually refundable once building has begun.

6.    What are your incentives?

Most of the time (just to further confuse things) the builder will have some sort of incentive program that takes money off of the price. This is usually fairly convoluted and difficult to understand. Make sure to ask as many questions as it takes to feel like you are comfortable with what the incentive is and how it can be used. Sometimes they will have a $25K incentive to upgrade options that cannot be taken off the price. So you need to realize that you will have to use all of the money at the design center to get it. You can’t reduce the base price using the incentive.

7.    Does your preferred lender have any incentives?

Sometimes the preferred lender of the builder will have additional incentives for using them. Make sure you get all of the rules on this as well.

8.    What are your HOA fees and what does this include?

This seems like an obvious question, but you often get caught up in the whirlwind of all of the other info and forget to ask this one. It’s an important one.

9.    What is standard with your properties?

Different builders have wildly different base standards. With a KB home, you often start at a pretty low price, but that price includes 8 foot ceilings and laminate flooring with gold metal transitions to the carpeted areas. With a Blandford home, your base price is going to feel high, but you’ll usually get granite counters, 18 inch tile and lovely plumbing fixtures without spending a dime extra. It’s important to know where you’re starting. Ask the sales rep for a tour of the model and ask which things are standard with that model and which are upgrades. You’ll probably be shocked. Much of what’s in the model isn’t even available for the actual buyer.

10.    Is landscaping (front or back), appliances, blinds or paint included?

This is another one that will vary from builder to builder. Front landscaping is pretty commonly included, but still often not at all. Meritage had an EI package at one point that stood for ‘Everything’s Included’ (blinds, landscaping, appliances). Sometimes these things are not included, but can be added as an upgrade at the design center.

Or hey, better yet, call your agent and she’ll run interference with the sales rep. Your agent will be happy to meet you out there at a moment’s notice. She doesn’t get paid unless she goes with you the first visit. And it’s nice to see the sales reps get a little nervous when they’re evenly matched. If I’ve learned anything, it’s that deadeyes are countered with a steady gaze, an eyebrow raise and a head tilt.

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