New construction houses

JenGin74 · March 2012

Tim and I have been searching for our dream home for well over a year with no luck, so we decided to go with new construction. We went with our realtor last weekend to look at some models and then she took us to meet with the builder yesterday. We told him everything we want and the proposal should be ready sometime today.

The builder and our bank make everything sound like flowers and sunshine, but I'm still a little worried because I have no first hand experience with new construction.

Does anyone have any insight they could share about glitches that could possibly pop up?

barbbhoww · March 2012

Hi! Miss you girls over here...

We are currently building. It started with a 9 month long wait short sale that fell through and we were devestated. When we couldn't find a house we both liked that was in our price range, we opted to check out new builds. DH was SO against it, but my parents always built and it is what I remember from my childhood.

The BEST part about building is that you can pick EVERYTHING in your house. The house will come with basics and then you can upgrade those basics. Remember that they upcharge most upgrades throughout the house..that is where they get you. The base price could be 169 and you end up paying 190 in the long run.

Our bank is paying our PMI for us for a .1 higher interest rate. We also asked for free upgrades and they gave us some. Builders have one thing they need to do-build.

We are SO excited and VERY happy with our decision. We broke ground in late January and it should be done within the next month. It is also super fun to check the progress being made day by day!

JenGin74 · March 2012

Hi barb!

So it sounds like everything has gone pretty smooth for you? My bank told me that the only real difference with the loan was that it will be interest only until the house is built and then it will switch over to conventional when we move in. Do you know if that's standard practice?

ceh789 · March 2012

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_new-construction-houses?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:a2f936e8-53c1-4660-a008-5a08cd113323Post:b392354a-b8ab-41b7-b130-753a7b1acb85">Re: New construction houses</a>:
[QUOTE]Hi barb! So it sounds like everything has gone pretty smooth for you? My bank told me that the only real difference with the loan was that it will be interest only until the house is built and then it will switch over to conventional when we move in. <strong>Do you know if that's standard practice?</strong>
Posted by JenGin74[/QUOTE]
For my company (very large mortgage banker) it is.

JenGin74 · March 2012

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_new-construction-houses?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:a2f936e8-53c1-4660-a008-5a08cd113323Post:53ab6e8b-7af3-4276-ba83-475f05599d06">Re: New construction houses</a>:
[QUOTE]In Response to Re: New construction houses : For my company (very large mortgage banker) it is.
Posted by ceh789[/QUOTE]

Excellent! Thank you :)

barbbhoww · March 2012

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_new-construction-houses?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:a2f936e8-53c1-4660-a008-5a08cd113323Post:b392354a-b8ab-41b7-b130-753a7b1acb85">Re: New construction houses</a>:
[QUOTE]Hi barb! So it sounds like everything has gone pretty smooth for you? My bank told me that the only real difference with the loan was that it will be interest only until the house is built and then it will switch over to conventional when we move in. Do you know if that's standard practice?
Posted by JenGin74[/QUOTE]

<div>We actually do not start paying until we move in. Our loan starts the day we close. I have heard of that though. </div><div>
</div><div>We also went with the builder's mortgage...it was less expensive, better interest rate and we know it will just be sold off somewhere like they all are. </div>

reils · March 2012

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_new-construction-houses?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:a2f936e8-53c1-4660-a008-5a08cd113323Post:b392354a-b8ab-41b7-b130-753a7b1acb85">Re: New construction houses</a>:
[QUOTE]Hi barb! So it sounds like everything has gone pretty smooth for you? My bank told me that the only real difference with the loan was that it will be interest only until the house is built and then it will switch over to conventional when we move in. <strong>Do you know if that's standard practice?</strong>
Posted by JenGin74[/QUOTE]

<div>Like PP have said this is fairly standard. You can have either a builders mortgage which is where the builder takes out the mortgage until you take possession. At that point the mortgage will be transfered to you. It sounds like this is the situation that PP has. Or you can have a construction mortgage. This sounds like what you are being offered. I have seen these mostly used for self builds or when you are hiring a general contractor to do a custom build but I don't think it's necessarily unusual that you are being offered this. </div><div>
</div><div>Do you know if you state has a new home warranty program? I know in Canada all new homes have a one year warranty offered through CMHC. I would look into that and ask your builder about how their warranty works if a program like this exists where you live. Some builders up here have excellent warranty service and some of them basically tell you to fvck off. That's something I would question if we were to buy through a builder. </div><div>
</div><div>I know some builders build houses really quickly. Like 45 days. Personally I don't trust that. At that point I have to seriously consider the quality of the house you are buying. </div><div>
</div><div>I think that buying a new house can be a great experience you can customize it up to a certain point and you get a brand new house, you just have to be smart about who you buy it through. Get references, ask around to get people's opinions, etc. I would for sure do some research on the builder that you are planning to buy through. I would look for someone who has been in business for a while as opposed to someone who is a newer builder. </div><div>
</div><div>Both H and I have worked for buliders in the past and work in the industry so if you have any other questions just let me know! </div>

JennaV26 · March 2012

I'm very pro new construction as my family has always built houses. However, I work for an engineering firm and the best wisdom I've gained from working here is to know your vendors. Find out who is doing the M/E/P, the engineering, etc., and do your research.

We draw plans all the time and then when we come out to inspect as the foundation is being laid or the framing is going up (which not all clients chose to do, BTW) contractors often (not always) take shortcuts and don't stick with the plans. This will cause problems for you down the road. Ditto with other vendors.

Find out who's working on every aspect of your house down to the landscaping and do your research. Be at your property as often as possible and ask lots and lots of questions. Honestly, I'm not very trusting so I'd be that annoying client that literally is hovering over my contractors. But hey, I don't want my foundation shifting like crazy in three years or my shower molding because someone took a shortcut and didn't seal the tilework.

FTR, I live in an apartment, I haven't even built my own home yet. These are just things I've seen at my job every day!

gailpete · March 2012

We've built 2 houses. As PP said, be there as often as you can to see what is happening. Are you comfortable reading blueprints? (some people aren't). If not, find someone that is and ask them to explain it to you so you can understand how what the plans say relates to what you want and what you see being built.

Spend a lot of time on the plans and questions before construction is started, it is cheaper to make changes before something is built than after construction has started. Change orders can be killer on a budget.

If you need to control expenses, spend on things that can't be easily changed later, and save on things that can be changed. For example, if you may want to finish a basement later, put a deeper basement and egress window in now. Countertops can be changed easily, so if needed, put in formica now and switch to granite after you move in and can afford it.

DH and I are both civil engineers, so we love the process and drove the builder's crazy, but if given a choice, I would always build.

PP is also correct about warranties. Things will crop up after you move in, so it is good to have the protection. Also, when doing your final walkthrough, be very picky. You are paying for a perfect house, not a "close enough house".

Have fun.

JenGin74 · March 2012

Thanks for all of the excellent advice!

The home comes with a 10 year warranty, which I think is pretty good. The builder said it would take 4 - 5 months from start to finish. If he had said 45 days I probably would have walked out of his office because that's just insane.

I searched the BBB and Google for anything negative about the builder and found nothing, so I think that's a good sign.

Tim can read blueprints (he has to for work) and the lot is only a two minute detour on my way home from work so I'll be dropping by after work to check the progress and ask questions.

We actually got the proposal back from the builder late last night and it's $10k over the maximum that we want to spend, so we're going to have to make a few cuts to our wish list.

New construction houses

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