If you’re a novice homebuyer looking to purchase your first home, it can be a daunting task. If you’re thinking about purchasing a new home and your friends and family are encouraging you to buy a new home over an older home, you should be aware of certain problems associated with new homes. Let’s go over some of these.
First of all, if you’re purchasing a new home in a master plan community, is not common to find there’s a homeowner association which regulates and maintains all the common areas of the community such as the swimming pool, clubhouse, gym, tennis courts, and much more. While some homeowners associations divvy up the total fees equally among each homeowner, you’ll find some associations will prorate your dues based upon your homes square footage and how much it’s valued on the open real estate market. In other words, the more expensive or larger your home is, the more you’ll end up paying in association dues.
When looking at a new home, if you discover there’s a homeowner association present, you should inquire how the association dues are calculated and what portion of the dues you would have to pay each month. Many associations also have rules and covenants that determine what you can can and cannot do with your property. Some of these guidelines and covenants will limit the amount of colors you can paint your property, how much area you can add onto your property, and whether or not you can rent the property to another party. These rules aren’t designed to maintain the value of the homes in a community, however you may find some of these rules can cramp your lifestyle.
In some instances you’ll coma across a homeowners association that purposely sets the association fees extremely low to trick you into thinking a community is inexpensive to live in. When you see this situation, don’t be fooled into buying the property. Just because you think a community has low association fees doesn’t mean it’s cheap to live in. You may be surprised in the future when you get slapped with a high assessment to resurface the pool, renovate the clubhouse, or whatever project needs maintaining. Another important step is to research the homeowners association to be sure it’s got an adequate amount of financial reserves to maintain the community. You may also want to review past association due increases to see how much they’ve been rising each year.
Another problem of purchasing a brand-new home is you won’t have a choice of real estate agents to use. Many builders insist that you use their own sales agents and purchase contracts when it comes to purchasing one of their homes. Sometimes you’ll come across developers that will be flexible and allow you to use an outside agent for the transaction. If you find that a builder will not let you use an outside agent, you may decide to look at another community. However, if you’ve decided you really want to purchase a home in this particular community, make sure you hire an outside appraiser to give you an independent opinion of the home’s value. You should also hire a lawyer to check over the purchase contract.
Don’t assume every new home is perfect and doesn’t have any defects. New home’s are built by humans which tend to make mistakes. It’s also not uncommon to find builders who are greedy for money and will do whatever it takes to keep their profits high, which may include making shortcuts on your home. One good idea is to hire an independent property inspector to inspect your home before you make the final purchase.