Choosing A Home Builder

Choosing A Home Builder For First Time Home Buyers

Gustan Cho Associates are mortgage brokers licensed in 48 states
This ARTICLE On Choosing A Home Builder For First Time Home Buyers Was PUBLISHED On May 22nd, 2020
Choosing A Home Builder and buying a new construction home For First Time Home Buyers has its benefits.
  • Who does not want to live in a brand new home
  • Everything is new
  • New framing, windows, roofing, appliances, paint, millwork, kitchen and baths, and everything you can think of
  • However, there are disadvantages as well
  • There are certain things that new construction homes do not have such as mature trees, developed established neighborhoods, and larger lots
  • There are pros and cons buying a new construction home
  • One of the major factors home buyers need to think about is choosing a home builder when buying a new construction home
  • Like many other industries, there are many unscrupulous home builders
  • Stay away from home builders who steer you to their preferred lenders
  • There are many instances where home builders will get kickbacks by unscrupulous lenders when referring home buyers to them
  • Home buyers should shop for a mortgage with a lender of their choice offering the best rates and terms for them
  • There are even instances where home builders will only offer incentives to home buyers who ONLY use their preferred lenders

In this article, we will discuss and cover Choosing A Home Builder For First Time Home Buyers.

Choosing A Home Builder Who Cares For Your Best Interest

Home buyers who are more geared towards maintenance free, custom, move-in ready may benefit more on a new construction house versus an older home.

  • New construction home buyers can either purchase a pre-built or a custom built home
  • Choosing a home builder that is reputable and has the buyer’s interest in mind is one of the most important factors in a new construction home buying process
  • The home builder should price the home right and within your budget
  • Experience and knowledge is important when choosing a home builder
  • The home builder should be knowledgeable in all aspects in construction
  • The builder should have trades who he used before and not new comers
  • The builder should be experienced and knowledgeable in the type of home you want to build
  • For example, some builders just specialize in log homes

Others build custom high end homes while others are specialists in ranch style single family homes.

Difference Between Custom Versus Production New Construction Homes

Choosing the wrong home builder can become a nightmare. You do not want to change your builder in the middle of your construction project.

Shopping And Choosing A Home Builder

Hands down the most important task in your journey to becoming a new construction homeowners is Choosing A Home Builder. You do not not to change home builders during the construction process. Do not go with the first home builder you run into. Interview several home builders. Check out their references. Google them individually and company. Year of experience is important. Check out their prior work. Make a list of all reputable home builders. Ask for referrals from realtors, lenders, attorneys, title companies, and others for a list of reputable home builders.

Here are other ways of getting lists of reputable home builders:

  • Asking your lender, realtors, attorneys, title company agents, friends, and others
  • Reach out to the local chapter of the National Association of Home Builders (NAHB) for a list of home builders in your county
  • Online searches; aside from Google, sites like HouzzHome Advisor, and Angie’s List
  • Or contact us at Gustan Cho Associates for help locating reputable home builders in your area
  • Narrow down the list of reputable builders
  • Do not rush this process and take your time
  • Check out their references, online reviews, website, and previous projects

Once you have chosen the right home builder, then your home building process is about to begin.

Type Of Home And Scope Of Work

What is the type of home and scope of work

Unless you plan on building a fully custom home, most home builders will have drawings from previous projects. Many builders will have model homes available. Often times, model homes are furnished. Make sure you bring a home inspector to inspect the quality of the work and the types of materials used.

Here are factors you need to consider during your due diligence period:

  • Does the features of the overall design of the new home match your style?
  • Are the main subcontractors for the project professional, experienced, knowledgeable?
  • Are the job sites safe, clean, and show safety?
  • Stay away from builders where everything you ask for is an extra and you will be charged an arm and a leg for minor extras
  • Talk to previous homebuyers’ of the builder and ask for punch lists and service after closing
  • Check out licensing and bonding of the builders and major subcontractors
  • How many years experience do they have?
  • How many homes has the builder built?
  • Get specs of materials and suppliers the builder uses for your home
  • How long is the warranty on the home and what does the warranty cover

Thoroughly review the contract before signing it. It will be wise to have an attorney fully review the contract. You lenders will need a copy of the builder’s information as well as licensing, insurance, and bonding information.

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