The American dream is home ownership, to have a place to call your own. Now more than ever since 2005 have folks turned to the builders to get their new home. As prices for resale homes climb in the Arizona market, folks are looking for other means to buy in a community already established! Here are some stats on one city in particular, Gilbert Arizona--the new home permits issued 1,896 since the beginning of the year. This trumps last year total of 1,545 for the total year! You can read in more detail about this by following this link; http://www.msnbc.msn.com/id/48885000#.UEWNUESSVMo
Now for the 5 things to watch out for when considering a new home;
*Be aware that in order to have someone to represent you in the transaction, you shouldn't just walk in to a showroom. Always have an agent you choose to represent you with you- at least for the first time...that is a good practice so the agent you know looking out for your best interests will be on your side during the signing and all the while the home is being built! So once you fill out a card or information sheet at the builder--what you don't realize is you have agreed to let the agent that solely represents the builder, help you buy a home. Now many times there is nothing wrong with this, but it is something you should be aware of as your best interests are not going to be taken into consideration.
*Your taxes for the first year are going to be based on the dirt the home is sitting on. This means your monthly payment- if you did get a loan with the taxes included in the payment will be lower for the first year...it will then increase for the new year as the assessor will add in your home. This could mean up from $100-500.00 a month more, but no one can tell you exactly how much it will be as it will be based on how much you paid for the home and what the assessed value of the home, only a ballpark based on what others in the community saw as a raise. (A good agent will be able to give you this data)
*Deposits should be held by an escrow company not by the builder. You want your money to be held by a third party to protect you. The Builder usually requires up to 3 different deposits. The first will be the "earnest deposit" usually not more than $2,500- based on the base price of the home. Then they have you go to the design center. This is where your homes price is adjusted by adding items you want in your home. Usually most builders have a "standard package" included in their base price which gives you a few choices of colors for the home that will include carpet, tile, fixtures, cabinets, electrical options, and so on, and so on. this is usually when they want the second deposit, and the third deposit is when the framing of the home and most of the other components of the home have passed codes and they are ready to do the finish work on the home. All of these deposits should be made out to the title company and if not, you need to ask how will the funds be used, and are they refundable.
*Make sure you are using a reputable builder from the start. Go to the registrar of contractor’s website to see if there are any claims against them and to make sure they are in compliance.
Finally and I would say most importantly, you should do is ask for the Public Report in advance of signing ANY documents. Your Realtor can get this for you, too!! This report tells you any and all things about the home, the soil, the water rights, are you in a flood zone (yes, there are some areas that will need flood insurance in Arizona) are you near an airport, anything you might want to know about the community and the plans for the community as well will be in this report. Read this document and fully understand what it is you are buying.
This is good standard of practice for making sure you know all you need to know when buying a home!! If you need help or have questions please let me know- I would be happy to help.