The Steps to Purchasing a New Build

1) Find a great agent.

Since the seller/builder typically pays the commission, it costs a buyer nothing to be represented by a real estate agent. Be sure it’s someone who has experience in new construction and is NOT affiliated with the builder. All Agents waiting for you at the builders site or model home represent the builder, not the potential Buyer. A good Agent will help you evaluate the neighborhoods, the builders reputation, assist with the unique paperwork, and guide you through the process and provide you with the necessary representation. Be aware that most builders have site registration policies that require your Agent to be present on the first visit to a builders community site. Failure to do so and you will forfeit your right to representation. Merely alert your Agent to which communities you are evaluating and wish to visit as he/she may be able to register you online or via phone so you can visit the model at your convenience. But otherwise, just arrange a time to look at the community with your agent the first time, thereafter you can visit that developers build site as many times as you wish, still retaining your representation.

2) Be creative during negotiations.

Builders are often reluctant to set a precedent for negotiating prices since future buyers, or your  friends and family evaluating the development, will expect similar discounts. Instead, consider asking for the builder to pay closing costs, concessions, perform some upgrades at no additional charge, or at the very least, discounted. Consequently, builders are often more likely to negotiate “on the back end” rather than “the front-end”. Once on-site the Agent will usually start the process of determining the builders incentive plans, buy-ins, concessions, etc. 

3) Get everything in writing. 

Don’t sign anything until everything has been negotiated, agreed upon, written into the contract, and you understand what you are signing. If you’re considering purchasing a home that is not yet complete, it’s very important to spell out how the home will be finished, on what time frame, what will happen if construction is not completed on time, and the deadlines for decisions that will occur through the process. Verbal conversations are not binding, so everything important must be put in writing and signed by all parties. It is important to know that builders often use customized purchase agreement documents in place of standardized State forms. Ask your agent to get a copy of the builder’s documents to review in advance, or have them drawn up for the purchase, then pause, read, review, and finally sign. 

4) Look to the future.

Check with the city to see what is planned for the surrounding area. If you have a view to the city lights, or the mountains, will it still be there in five years? Most builders put the responsibility on the buyer to be aware of neighborhood or community dynamics related to other development in the area like traffic planning, and the development of neighboring parcels, etc. Many new communities also have homeowners associations (HOA) that can impact your potential new home as well. Ask your agent about writing in a review period for you to investigate the area, or plan to do some research before submitting your offer. The “Arizona Buyer’s Advisory” is a detailed document on evaluating many of the factors of a community in general, and a home specifically in the State of Arizona: it’s the best place to start. Request a copy from your Agent at your first meeting. 

5) Due diligence to examine the builder. 

Do your research and know the reputation of your builder. Visit other developments and talk to homeowners – how is the builders follow-through after completion? Check review sites, state licensing boards and the local court records to see whether the builder you're considering has run into any trouble, including lawsuits, complaints with licensing agencies and disciplinary actions by state and local agencies. Any concerns that you deem important should be covered in the purchase agreement documents. Ask your agent if they’ve worked with the builder in the past or are aware of their reputation.

6) Get a guarantee.

Most builders offer warranties on materials and workmanship. Pulte and its companies Centex and Del Webb, for example, offer a one-year warranty on workmanship, a two-year warranty on mechanical and electrical elements, five years on water leaks and 10 years on structure. Be aware of some builders using third-party warranty companies. In some cases, the manufacturer of certain products, like windows, may have a separate warranty or guarantee and the builder might refer all issues with those components to the manufacturer instead of handling any issues directly. The builder should be able to provide details on which part of the home is covered by which policy. Make sure you understand what is and isn't covered and what process you need to follow to get something fixed. Ask your Agent to obtain warranty information early on when ‘zeroing’ in on properties to Offer on, as one warranty might situation might be substantially different from another, making the decision easier for you. 

7) Get the home inspected!

You may think you don't need to have a newly built home inspected. But getting an independent Home Inspection before closing is always a good idea, and you want to be there so you can learn more about the home. Newer homes can have just as many problems as older homes, and it's always better to know what you don't know before the last piece of paper is signed. In the case of a newly built home, a good home inspector can help identify problems before a builder's warranty expires. Your Agent will provide you with recommended companies that they utilize on a regular basis. 

8) Maintain your investment.

Just as with any home it is important to remember this is probably your largest investment – maintain it and it will pay dividends long into the future.