Today we’re giving you the 8 biggest mistakes that we see home buyers make when deciding to build a home in hopes that you don’t make the same errors. The phrase “hindsight is 20-20” should never be used when referring to your new home build. Just saying.
MISTAKE #1: Being your own general contractor
A lot of homeowners see a general contractor as just a project “supervisor,” and therefore think they are qualified to be said contractor.
Yes, the contractor’s job is to oversee the home build, which includes but isn’t limited to gathering bids, identifying and sourcing sub-contractors, overseeing timeline and budget, and making sure that progress is being made. What you don’t consider the contractor’s long-standing authority in the industry and their deep-seeded relationships with sub-contractors (electricians, plumbers, etc.). Because of these trusted connections, sub-contractors want to perform exceptional work for general contractors. If they do, general contractors will continue to enlist them for future jobs, thus keeping the sub-contractors in business.
Unfortunately, sub-contractors will be less likely to do quality work (stick to your budget or finish within the agreed-upon time-frame) when working with someone, like a homeowner, whom they’ll never work with again or whom won’t provide any subsequent opportunities for work.
You might see hiring a general contractor as an unnecessary, added expense, but working with a notable, qualified professional will save you time, money and headache in the long run.
MISTAKE #2: Being frugal
Building your home is not a time to cut corners on your budget. When sourcing bids for a builder, beware of outlying low offers. It might sound like music to your ears when a builder promises to build your dream home two months faster and $40,000 less than other builders, but don’t fall for it.
If there’s a significant difference in the timeline or price compared to other bids, the builder is likely just offering what they think will get them the business. The problem lies in the added expenses that will likely ensue as the project progresses due to being excluded in the original offer. The difference in pricing could also hint to the quality of materials this builder is using.
Your home is an investment. Spend your money wisely on the front end so you’re not wasting your money replacing or fixing home features in the future.
MISTAKE #3: Not Covering Your Back
This is one of the biggest investments you’ll ever make, so we recommend being an active participant in the home-building process and overseeing all the details. This means reading, understanding and reviewing all documents with a lawyer, asking for copies of contractor and sub-contractor insurance policies (if the contractor isn’t insured and an employee gets hurt on the job site, the homeowner could be held responsible), and serious deliberation over your floorplan and home feature selections – once construction commences, changes to a home can be very costly.
MISTAKE #4: Not Asking About Incentives
A builder almost always offers some type of incentive program. Before you sign a contract, be sure to ask the builder or New Home Sales Consultant about special offers that can either reduce the final amount you pay out of pocket (either on the home price or closing costs) or add value to the home (discount to the Design Studio, upgraded features or included appliances and/or amenities).
We at McKee Homes make an effort to provide our homebuyers with as many incentives as we can. Through the end of the 2019 year, we are offering $5,000 off closing costs, as well as a ‘Move-In Package’ complete with a free Whirlpool refrigerator, washer and dryer! Get more details on current incentives and available homes included in the special here.
MISTAKE #5: Not taking location into consideration
When considering a home, take into account the following:
- Resale value of the home (don’t concentrate on the cheapest lot). Think about your ROI (return on investment) in the long run.
- Land viability. Do your homework on things like the water table, terrain, slope, utility providers, etc.
- Size of lot. Do you like to be situated close to your neighbors for a close community feel or do you want a more spacious lot for privacy and tranquility?
- Convenience to a grocery store or gas station. Depending on who you are, being close to the busy life is important. To other families, a more quiet, private location suits them better.
MISTAKE #6. Having a budget without a buffer
It’s important to establish a budget when building a home. The budget should include a slush fund that takes into consideration unforeseen circumstances and overages, because even with the best-intentioned bid, incidentals will likely still come up.
There’s also a big difference between the base line price and the actual price of the home. A sales consultant will sell you on the base line price of the home, but it’s your job to know that any upgrades to the floorplan or feature selections (sun room, patio, bonus third floor, deluxe kitchen, decorative lighting packages, L-shaped master shower, etc.) will come with a price. Calculate the base line price and your upgrade costs before putting a deposit down.
MISTAKE #7: Assuming your home will sell during your build timeline
Even if you get financing for your new home build before you have sold your current home, there’s always a chance your home won’t sell before the new home is done (your realtor will tell you otherwise!). Depending on the location and economy, there are many factors that could affect the sale of your home: slow market, appraisal problems, buyers lacking financing, etc.).
When developing your Plan B (because you should have one), consider the following options:
- Move into your new home and rent your old home while it’s still on the market
- Make both house payments until your old home sells
- Walk away from the new home and lose your deposit
- Explore a new realtor with more creative selling approaches
MISTAKE #8. Working with the wrong builder
Before you choose a builder, do your research:
- Look at their website not only for examples of work, but also who the builder is. Do they give back to the community? What are their values? Do they take the time to respond to their customers on social media? All these factors will give you a glimpse into the character of the builder.
- Check reviews online (Google, Facebook, Angie’s List)
- Ask potential builders to provide examples of their work (photos and in person)
- Tour neighborhoods in which a builder has built and ask people about their experience
It’s important to take the time to find the right builder for you (not just based on the timeline and budget they promise). You will be working with them for the duration of the project and will forever be living in the home they build for you. Pick wisely.
If you’re on the fence about building a home and want to make sure you make the right choice regarding a builder, we’re happy to hop on the phone and answer any questions you may have. Simply fill out the form below or give one our friendly, knowledgeable online home specialists a ring at 910-672-7491.