I am planning to buy new build from a national builder and use their lending to take advantage of incentives. Are there any pitfalls or issues I should be wary of regarding contract, warranty or closing?

TIA

Mortgage rates now are not what rates will be when you close. Could be worse or better but its hard to plan for when the fed keeps messing with rates.

Have built twice now, once with Newmark and recently with David Weekley. Nothing necessarily wrong with Newmark but the experience with David Weekley from start to finishing was excellent.

Get a second and maybe third opinion on the financing required to take advantage of the incentives. Frequently they're built in to the financing so you end up paying for the incentives and maybe more.

Hire an inspector to perform phase inspections if you can, finals and pre warranty at a minimum. I'm in SA and new builds are my jam.

mwp02ag said:

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Hire an inspector to perform phase inspections if you can, finals and pre warranty at a minimum. I'm in SA and new builds are my jam.

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I'd love to hear your thoughts on some good inspectors in the SA area. I am about to do a new build in SA.

Take advantage of double incentives when pairing a Red Pear Realty agent with your new purchase. Give me a call if you have any questions. My number is in my profile.

Shoot me an email at goodguysinspections@gmail.com

Anecdotal, but last year some friends bought and built with Weekley. I can't remember the exact details but someone on the builder's end dropped the ball and their loan rate didn't get locked in. There were delays in the subdivision that pushed back their closing quite a bit (not that Weekley could control) and they ended up with quite a bit higher rate.

Overall I like all the folks at Weekley that I've dealt with.

mwp02ag said:

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Hire an inspector to perform phase inspections if you can, finals and pre warranty at a minimum. I'm in SA and new builds are my jam.

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Know any inspectors in Fort Worth? I'm looking in that area this summer

Xpert Inspection Services is who we use. Ask for River: 817-901-5669

My partner moved up to Rockwall last year. I'll see if he goes that far or who he recommends.

Agnlaw said:

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I am planning to buy new build from a national builder and use their lending to take advantage of incentives. Are there any pitfalls or issues I should be wary of regarding contract, warranty or closing?

TIA

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On contract, just review terms and make sure it's all in writing. If not in writing, it's not part of the deal.

Warranty - should be a 1-2-10 warranty. Different builders have differing reputations about going "above and beyond" when dealing with warranty issues. Most are pretty good. Get a GREAT real estate agent to represent you. They can help put pressure if needed to get warranty items taken care of.

Closing - again, have a good agent that can advocate for you, attend closing with you, review docs with you.

Lending - if you go with "preferred", that's fine...but again, have your agent shop the terms they offer when it's time to lock. If they give you a $5000 incentive, but the rate and fees they offer can be beaten by $5000, they gave you nothing at all. Make sure you actually GET the incentive.

I'm an agent (broker)...if you don't have one, call me. I'd love to help you. If you do have one, make sure they are familiar with working with new construction (it's a bit different than pre-owned). Many people think an agent isn't necessary on new builds. I've seen so many instances where a great agent was worth their weight in gold when dealing with builders.

Any questions at all, feel free to call my cell of 972-365-0432. Even if you have an agent, I'm happy to help a fellow Ag...I don't have to make a buck to help someone.

Gig'em!

Cody

NoahAg said:

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Anecdotal, but last year some friends bought and built with Weekley. I can't remember the exact details but someone on the builder's end dropped the ball and their loan rate didn't get locked in. There were delays in the subdivision that pushed back their closing quite a bit (not that Weekley could control) and they ended up with quite a bit higher rate.

Overall I like all the folks at Weekley that I've dealt with.

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Heard something similar but worse yet buyer has a large deposit down they couldn't get back.

Absolutely hire an inspector. We had inspections done at least three times during our build 16 years ago. Worth every penny, IMO.

Make sure your builder doesn't have a clause allowing them to cancel your contract for "convenience". Buyers lose home when homebuilder raised a little-known clause in the contract that allows the builder to cancel the sale for any reason.

Gigem_94 said:

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NoahAg said:

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Anecdotal, but last year some friends bought and built with Weekley. I can't remember the exact details but someone on the builder's end dropped the ball and their loan rate didn't get locked in. There were delays in the subdivision that pushed back their closing quite a bit (not that Weekley could control) and they ended up with quite a bit higher rate.

Overall I like all the folks at Weekley that I've dealt with.

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Heard something similar but worse yet buyer had a large deposit down they couldn't get back when they had to terminate the contract.

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In your situation, you don't need a real estate agent or broker - you already found your property (so be sure you aren't paying the builders agent some big fee either). You need a real estate lawyer - will be much cheaper than an agent that charges a percentage of the closing sale and the lawyer gets paid at closing so not out of pocket. Agents cannot advise you on anything legal. They can only fill in a form contract and cannot legally help you with writing any special provisions. Also very few agents can help review a title commitment or your HOA restrictions. (Granted I'm a real estate lawyer so I'm biased but I've seen more than a few buyers get stuck in a bad situation because they thought their agent was doing what a lawyer would do.)

definitely hire a real estate attorney to redline the **** out of the national builders standard contract. Seems like a good use of time and money.

I'm neither a Realtor nor a RE attorney but I feel certain the production builders have Realtor costs built into their marketing budgets. That's seems to be built into the price of the home whether you have an agent or not. I have also seen them offering significant bonuses for Realtor driven business including cash, nice vacations, etc.

From what I can gather all these costs typically are split between the price of the house and the financing. It's pretty typical for how they recoup these "incentives".

Builders understand Realtors are their biggest source of qualified, motivated buyers so I cannot imagine a large production builder pricing a home differently with or without an agent.