ABA Family Legal Guide

Buying and Selling a Home

The Steps of Buying and Selling a Home

Home Inspections

Are there any special considerations when you are buying new construction?

A buyer purchasing a new home from a developer may or may not work through an agent. If you are not working with an agent, you may want to consult your lawyer to ensure that the purchase contract with the builder contains no surprises. In addition, you may want to consider having the finished structure inspected notwithstanding that it is new. Remember, it is the quality of the construction, not its newness, that is important. An independent inspection can give you this assurance.

If you are contracting with a builder on a home that is not built or finished, you will want to make sure you will get what you think you are buying. For example, model homes typically include optional upgrades, rather than standard features. Along with superior windows and siding, these could include better-quality kitchen cabinets, higher-grade carpeting, and more expensive lighting fixtures. Make sure that the builder provides you with a complete list of standard and optional features. If you are choosing options, make sure the purchase contract includes the specific cost of all options.

You will want to know other facts as well, such as the type and extent of any landscaping to be provided by the builder, known plans for the development of surrounding property, and the exact provisions of any warranty from the builder. If possible, you will want a warranty that is insured by an insurance company, rather than a warranty guaranteed only by the builder. Finally, the builder should provide you with evidence that there are no mechanic or construction lien claims. The seller's contractors, subcontractors, and material suppliers can file such liens in the event the builder does not pay them for their work.

The purchase contract should address certain issues unique to newly constructed homes. For example, specific dates for completion and occupancy should be included if the home is not yet built. Although it is difficult to negotiate, the buyer can try to provide for a penalty or for the right to cancel the contract if the builder exceeds these dates. In addition, the contract should cover the method of prorating real estate taxes. It is also very important to visit the site frequently. The only person in the entire project concerned with your best interests is you. Errors, delays, and other issues are much more easily dealt with and corrected if caught early.