Ideally, we would love for you to use us when purchasing your new home in the Dallas Fort-Worth area, but if you are not purchasing in Texas or choose to go it alone for whatever reason, here are five questions you should ask your builder.
Q: What is the current build time once we sign a contract?
Make sure you understand the time required for permitting, plus the actual construction time of your new home. Average estimates around Dallas are between 6-9 months, but most builders can take over a year are not be in default of their contract.
Q: Do I have to be approved by your lender to buy one of your homes? Are incentives tied to using your lender?
Builders take on a good amount of risk building a house and customizing it to your liking. If the deal falls through because you can’t get funding, they are stuck with a home that they might not be able to easily sell to another buyer. For this reason, many builders want you to use their lender. Their lender’s sole priority is being absolutely sure you can qualify for the loan – double and triple checking. Even if you can use your own lender, some may not give you certain upgrades or incentives. Furthermore, you may still have to prequalify with them even if you go with another lender, so be sure to ask these questions.
Q: Do you have a published option price list?
It’s easy to be wow’d by all the features in the model home which may be heavily upgraded. It may be easier to have a list in hand if you can get it, on how much certain options costs.
Q: Can I use my own home inspector? What happens if he/she finds things?
Most builders have their own inspection process. Nonetheless, spending an extra $500 on a $500,000 home may not be a bad idea if you want a second opinion. The bigger question is whether the builder will fix the things your inspector finds. You should expect your inspector to find some things – and you should expect your builder to not fix every single item. Building codes and construction processes are unfortunately like getting an opinion from two NASA engineers, you sometimes get three answers on the best way to do something.
Q: What is your home warranty?
Builders will often have warranties on various components of the home that last 1, 2, or 10 years. Almost everything is covered in the first year, with things more likely to get wear and tear to fall out of warranty after the first year. Ask about the roof especially; North Texas gets tornadoes and baseball size hail. Are they using shingles that will last? What happens if you get roof damage 6 months after you close on the house from a hail storm?
The best home builders welcome your questions and welcome you having a Realtor. It helps them set expectations and deliver on what they said.
In an on-demand world, having a custom home or even production home built from the ground up requires a lot of patience. As of July 2017, it takes a typical builder in North Texas at least 7 months to complete a new construction home. The reason for this is labor shortage and material shortages. In places like Texas, there is a boom of people relocating to the Lone Star state. Builders are having a hard time keeping up with demand and so trades are spread thin across many homes being built at the same time.
What many consumers don’t realize is that when you sign a contract to have your new home built, you will never get a specific closing date on the day you put your earnest deposit down. This is the exact opposite to resale homes where the contract states a closing date on or before a certain day. Sellers will even favor certain buyers who can close early. This is not the case with building a new home. There are too many variables for a builder to predict the exact date (or even week) your home will be finished regardless of how much you’re paying.
Many buyers are not dissuaded by this, as the excitement of getting their perfect abode outweighs the details of a closing date. A buyer who is living with family or maybe has a month-to-month lease has the added benefit of not having the financial pressure to move on a specific date. But if you’re the buyer having to sell an existing home or paying steep fees to break a rental contract, not having a guaranteed closing date can be a nightmare.
Did you know some builders can take up to 2 years to build your new home?
The bigger surprise that most consumers don’t realize until month 7 has passed is that a builder may go into month 8, 9, 10 and all the way past one year before your house is complete. In fact, some contracts state that the builder may have up to 24 months to complete your home. The builder wants to mitigate all risks of labor shortages, material backlogs, and even natural disasters like hurricanes and tornadoes in Texas. So this long build time allows them to not be in default of the contract if anything comes up during construction.
What can a prospective home buyer do?
There is not too many things a buyer can negotiate in a contract with a production builder and this is one of them. The best thing to do is go in with eyes wide open and understand your backup plan if things don’t finish in 7 months. What is your plan in month 8, 9, or 10? Also, think about the time of year. Would it be easier for you to handle a delay in the summer? If so, then you’d want to sign a contract 6-7 months prior to May or June. If you know it rains a lot a certain time of year, then plan 12 months ahead so that your home is not being built in the rainy season. Nothing is guaranteed, but you can make a proactive effort to try and mitigate risk on your end just as the builder does it on their end.
The blog for everything about buying new home construction (and resale homes).