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Buying A New Home


Whether you are buying a new home in Chandler, Gilbert or any other area of the Valley, we at Buyer One have more than 30 years’ experience representing hundreds of new-home buyers negotiate their dream home.  The following is a simple timeline of the process. 

The notes below assume you’ve already made the decision to purchase a brand-new home.  While doing it you will need to make more and different decisions than when buying a preowned home.  You will be able to choose elevation, colors, lot, floors, cabinets, etc.  One important thing to remember is that the advertised prices is the “base price” and it does not include any extras or upgrades.  These items could increase the base price by 20-30%.  We will discuss this further under upgrades.

As you have heard, the three most significant considerations of purchasing a home, new or preowned, is its “location, location, location.”  When buying a new home, you will have a greater chance to select the best location possible.

The search
It is very easy to find new homes-for-sale ads everywhere.  You find builder ads in newspapers, magazines, websites. There are many new home listings in the Multiple Listing System (MLS), to which only Realtors® have access. Dedicated Databases such as Ultimate Information Systems include virtually every builder and subdivision in the Valley and it is only available to brokers through subscription.  At Buyer One we make this resource available for free to our buyers.

Visiting Subdivisions: two warnings!

  1. The on-site agents are ALWAYS looking out for the builder. They are either employees of the builder or they are a traditional broker that has been hired to handle the sales. In either case the salespersons you will encounter at any subdivision represent the builder only! Their loyalty is to their employer. Their goal is to get the most money and best terms for the builder, not you, thus the need to hire an agent to represent your interests only.
  2. When you walk into a subdivision you will see a sign alerting the buyer that in order to be represented by their own agent, buyer and agent must visit the subdivision together the first time. You will be asked to complete a registration; this registration is the evidence that you were there alone or with your agent. So, if you are visiting a subdivision alone, do not register! Just say you are working with an agent, and if you like anything, you will come back with him or her to register.

Commonly, the general area you choose will be dictated by personal reasons such as proximity to work, schools, church, relatives, etc.

Check builder ratings, walk the subdivision and talk to people who already bought. Ask them if they are happy with their purchase/home. Most people will be willing to share information, especially anything negative.

Visiting the models
Model homes are designed and decorated to impress and to sell.  They will be greatly upgraded and furnished by interior designers. If you notice, must model homes do not have doors so the rooms and layout appear larger. It is important that you have a clear picture of what is standard in the model.

This refers to  how your home will look from the street. Most builders offer three or four elevations for each floor plan.  Different elevations also add diversity to a subdivision.

Subdivision Report
This report is required by the Arizona Department of Real Estate to prevent fraud.  One of the toughest in the nation, it requires builders to disclose ALL material information about the subdivision.  It is very important that your agent guides you to a full understanding of the information contained in it.  

The word is derived from speculative and refers to homes that are completed or under construction and not yet sold. One of the advantages of these is that you can move in sooner. A disadvantage is that you are very limited in the changes you can make.

Base Price
Base price is the starting or basic cost of the home without any upgrades or changes.  Sometimes what is considered an upgrade at one builder may be included in the base price of another. 

HOA Fees
These are fees charged to owners monthly to pay for the cost of maintaining the common areas of the subdivision such as landscaping, pools, club houses, parks, gates, etc.

Lot location
The location within the subdivision is very important. Orientation, surroundings and size are some of the aspects that define the value of your lot. A single level surrounded by 2-story homes may affect your privacy. A lot backing to a new street may sound quiet now but once the area is developed it may be very noisy. The desirability or size of a lot may add significantly to the price of the home. Your agent should guide you on the pros and cons of a given location.

Lot Premium
An additional charge to your base price for the enhanced value of a given lot. An example would be a larger lot in a cul-de-sac.

These include access to a community clubhouse, gym, park, pool or golf course.  Again, the cost of maintaining these facilities will be included in you HOA monthly fees.

Starting with the lot premium, the selection of upgrades can significantly stretch you monthly budget beyond your original plan. You will have countless choices of flooring, cabinets, plumbing and electrical fixtures, just to name a few.  Here is where you will need help from your agent to weigh out what adds value, and more importantly, what does not.

The contract
A builder’s purchase contract consists of a pre-printed portion written for the benefit of the builder. Thus, it is critical that you fully understand the terms of the sale. Here’s where your agent can be extremely valuable in navigating through the agreement.  It will require you to deposit earnest money. Most builders will require that you have been pre-qualified by a lender before writing the contract.

Earnest Money
Earnest money will depend on the price of the home.  Customarily the builder will require approximately 1% of the purchase price.  Unlike most transactions of a pre-owned home, where the earnest money is deposited with an escrow service, these monies will usually go directly to the builder’s account. 

Most builders have an arrangement with a lender to handle the financing. Some will give you a choice of lenders.  Larger builders may have their own mortgage companies. They will usually offer an incentive to use their preferred lender which makes it improbable that you can get a better deal with an outside lender. A few builders will give you a set amount towards your financing if you decide to use you own lender. 

Decorating Center
This is the builder’s upgrades store/showroom.   Here you will select flooring, lighting, cabinets, counters, appliances, etc.  By the time you get here, approximately 3-4 weeks after signing the contract, you will know the maximum mortgage you can obtain and how much you can spend on upgrades.  After you select your upgrades an addendum will be added to the original contract to include these costs and determine the total purchase price and loan amount.

Construction time
There are a few things that determine the time it takes to have a production home built such as the availability of supplies like wood and cement, the availability of labor and the size of the home. Currently (2020) it takes a builder an average of 7-10 months to build a home from the ground up.

Customer Orientation/Walk-thru
Once your home is built and about one week prior to the actual closing, you will do a walk-thru to make sure the home has been finished to your satisfaction. On this day, a representative from the builder walks the home with you and goes over the warranty information, etc. On this walk-thru you will make note of everything that does not meet your expectations.  The builder then has a week to take care of all of these items. On the day of closing you will go back to the home and verify that all repairs have been completed and get your keys later the same day. Again, it is very important that your agent be there to help with this inspection. 

The closing takes place at a title company.  Your agent should attend to go over documents and charges. 

One-Year Punch List
At the expiration term of the one-year warranty you will have a chance to submit to the builder any and all defects you’ve found during this time, material or cosmetic, for repair.

New Homes Database (UIS)

New Home Building Resources

Arizona Registrar of Contractors

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