Real estate after coronavirus will ‘bounce back very quickly’: NAHB CEO
NAHB CEO Jerry Howard discusses how the coronavirus is impacting the real estate market.
Everybody has a dream of one day owning a perfectly built, brand-new home. Of course, I'd need to win the lottery for that to happen. However, in case there are some lucky people reading, here are some of my suggestions for buyers.
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Hire a real estate agent who is not only knowledgeable about values and area locations but also one who has experience dealing with new homes and a number of builders.
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Not every builder has a known track record. Some are new in the neighborhood and are building for the first time. Other builders have an established reputation. From this group of builders, some have a very good reputation based on workmanship quality and customer service. Others have a reputation for using substandard materials or having pending lawsuits and bankruptcies.
Hire a qualified inspector to inspect the newly built home and, if applicable, the geology and hillsides. Even though your builder will provide a certificate of occupancy and provide city sign-off cards, that is not enough to prove that the house has been approved for quality control. Hillsides are particularly tricky; don't skimp on your inspections.
Go through the property thoroughly yourself and, with your real estate agent, prepare a punch list, in addition to a more sophisticated list that will be provided by your home inspector. Pay close attention to proper and adequate ventilation and waterproofing. Drainage is also very important and must be verified.
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Perhaps you are buying a house that is not 100 percent complete and you wish to make upgrades. Making upgrades will personalize your home and can be very beneficial if you have specific needs and desires. Be aware, however, that when you stop the progress of the developer/builder, you are not only making him restock items, which is expensive, but you are also slowing down his timeline.
Builders usually borrow hard money and are paying high rates of interest. As you slow the process down, the builder is going to expect to be compensated for that delay. Be sure to nail down a timeline and a fixed price for the cost of the upgrades. Get the commitment in writing from your builder so that the upgrades don't suddenly end up costing you more than your handshake agreement. Confirm any replacement item with the manufacturer's stock and model number.
Have your contract reviewed by a lawyer. Any agreements that are cumbersome should be analyzed for clarity, avoiding ambiguous or poorly written and unenforceable commitments.
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Personally check out the builder's reputation. Check with the Better Business Bureau, and read online reviews. Ask your real estate agent and other agents in the community, and call individuals who purchased their home from this particular builder. A quick conversation or email communication will let you know if this is the right builder for you.
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Go back to the property on at least two or three occasions, and if possible, visit the property during various weather experiences. Here in California where I am based, it is difficult to analyze a property in the rain since we have so little. However, it would be very opportune to examine the property yourself or with a physical inspector after a heavy rain. Rains tell many stories including those of moisture and water penetration. Test the air quality. Also have a mold specialist, if you are suspicious, investigate the property.
Review all disclosures from when the land was purchased, provided by the previous owner. If possible, meet the neighbors to be sure they seem like good people. Neighbors can be an occasional nightmare, so why not introduce yourself as potential neighbor in advance and exchange a few words?
Take all of these items into consideration before submitting an offer, but do not overlook the opportunity to buy the house of your dreams. There is nothing more exciting than owning a brand-new home.
Ron Wynn has been among the top 100 agents in America for over 10 years, as noted on REAL Trends/Wall Street Journal. Ron has represented over 2,200 sales totaling over $1.5 billion in sales volume in his 30-plus-year career as a real estate broker in California.
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