Since these “Random Things” are so popular, I thought I would write one about the stuff you need to take into consideration when you are building a new house in a new neighborhood:
1) Check the zoning of the undeveloped areas around you. Agricultural could turn to residential, but industrial hardly ever changes to residential.
2) Check to make sure that some of that land around you isn’t going to be high density apartments or commercial. Neither will benefit the resale value of your house.
3) Ask where things like utility stuff and telephone poles will be.
4) Verify the school districts for the neighborhood.
5) Find out what the Home Owner’s Association will be like? Rules? Fees?
6) Realize that things change. Have you seen those nicer, bigger houses near Wilson-Downing as you approach Belleau Woods? That whole neighborhood was going to be larger houses until the interest rates shot through the roof in the early 80’s. The builders then built the smaller houses that were selling. The same thing is happening now as sales of houses over $250k are slow.
7) All those lines on the blueprint for the lot mean something. Can you tell if there will be a storm sewer drain in front of your house? Are there any easements for utilities that will prevent you from adding on to your house later? Also, if the side yard setback is 5 feet, that means that likely the houses next to you will be 10 feet apart from your house.
8) As you pick a lot, think about what the traffic patterns may be like down the road. If there is a big street that abruptly ends, it is likely that it will keep going as more houses get built. Autumn Ridge Drive is a prime example. That was a nice quiet street, even though it was the main drag for the neighborhood. Who would have ever thought 15 years ago that it would become a cut through to Hamburg?
9) Think about how the water will drain from the lots around yours. You don’t want every body’s water to come to your yard.
10) If there are enough houses built, drive around and see what other models are built. You don’t want to pick the 4000 sq ft model and find out that most of the neighborhood is going to be 2000 sq ft houses.
11) Don’t go overboard with the upgrades. Most of them don’t add any value to your house when you go to sell. A few add value, but it is less that they cost. Pick them only if you are content knowing this.
12) Think about the future as you make your selections. Ever walk into a house that hasn’t been updated from the 70’s? The reality is that all that stuff that you pay for now will be out of style sooner than you’d like. Neutral is always better for resale.
13) These are tough times for builders. Avoid giving them a bunch of money to start the house. It is unlikely, but occasionally builder are robbing Peter to pay Paul. When it catches up with them they have no cash left to finish your house. Years ago there was a custom home builder who was taking huge sums of money from people to build their dream homes. Turns out he was using that money to live large.
14) If you don’t know much about the builder, ask for addresses of other houses they have built, check the BBB, check the PVA to see how many other lots they have, and check to see how many houses they have on the market.
15) Find out what kind of warranty they offer. Most will either do a 1 Year Written Warranty that they provide, or they will buy a 2-10 warranty that is kind of like insurance. It includes 1 year coverage for workmanship, 2 year coverage on the systems of the house, and a 10 year structural warranty.
16) Before you write the offer, check to see how many other houses the builder has on the market. They can only borrow so much money. Sometimes you can get them to be a little more flexible on price if they need to sell something before they borrow more money, but not a HUGE amount.
17) Read the contract!
18) Most of the contracts that I have see allow you to have the house inspected before the closing date. Some use wording that says you can ask for repairs, but then go on to say that the builder will fall back on Building Inspector for the decision. Guess what, the building inspector has already said it is okay if the city issues a Certificate of Occupancy. That means that they really are saying that they DON’T have to make any repairs!
19) I aways recommend an inspection. Occasionally something gets over looked in a house even with the best builders. The worst case I have ever heard of is where a house had no insulation in the attic! The owner didn’t find that out until he sold the house and the new buyer’s…………had it inspected!
20) A lot of builders like to finish minor stuff after you close. I always try to get them to get it all done before the closing. It is the only leverage that you really have. If it is a builder that I know nothing about, I insist.
21) Sometimes things don’t get done before the closing. Sodding is one of the most common items since it is a seasonal thing. Since the contract is consummated at closing, make sure that you put something in writing that will survive the closing. Most builders will come back, but I am not that trusting when it comes to your money.
22) Make sure that the builder has obtained a Certificate of Occupancy from the city. If you are getting a mortgage, odds are that you wouldn’t even be at this stage if there wasn’t one issued. The lender wants to make sure that the house can be lived in too.
23) I always recommend buying Owner’s Title Insurance. Especially for people that will have a lot of equity. Your lender has you buy Title Insurance when you get a mortgage, but it covers THEM! It is rare that there is a title defect, but if it happens you will wish you had spent a few hundreds bucks to protect yourself.
24) Close the deal
25) Move in and enjoy!