Things To Keep In Mind When Buying A New Home

By Raynor James

We all like new things, from cars to gadgets to clothes. That being said, there are some things you need to keep in mind if you are considering buying a new home.

A new home is a glorious paradise. Don’t believe me? Well, just go look at a model in one of the new developments. It is heaven on earth. The carpets and furniture is tremendous. Did you see that kitchen? The yard would be fit for a Sultan. Man, where do I sign the purchase agreement? We have to buy before all of the homes are snatched up!

The above represents a developer’s dream, but isn’t necessarily a good scenario for you. First off, it is very important that you understand what a model home represents. It represents a sales pitch and nothing else. The developer stands to make millions off of the sales of tens or hundreds of homes in the development. How much money do you think he or she is willing to spend on the model home? A lot. While it looks like the Taj Mahal, you have show some discipline and try to picture your stuff in the home. Also, you might be surprised to learn that the marble counter top isn’t a standard feature in the homes for sale. Heck, your home may come with a dirt yard. In short, what you see is rarely what you get. Buyer beware!

Another thing to keep in mind when considering a new home is the cost. Unless the developer is really hurting, you are going to pay more per square foot than with a used home. Much like cars, this is true even when the new home is compared to one that is six months old. There is nothing wrong with paying a premium for something new, but you should be aware you are doing it.

Homes in new developments also can come with some high hidden costs. Many areas now require the developers to build amenities to support the new housing. This can range from new roads to schools for kids. Guess what the developer does with those costs. Yep, he or she passes them through to you in the form of fees and assessments. Examine the purchase agreement very closely because they are often given innocuous names, but can add hundreds or thousands to your monthly payment.

For many buyers, it is a new home or nothing. There is nothing wrong with this approach. Just make sure you educate yourself on the costs and have a realistic understanding of what you are getting compared to the model home.

Raynor James is with FSBOAmerica.org - get a free one month real estate listing.