I have decided to write multiple post to provide valuable information to assist in the buying of new construction.  This will be the first post in the series of posts. I plan to write three post in this series. I will add more post if necessary . The first new construction home I bought was over 13 years ago.  The other three homes, I purchased were pre-existing homes, but recently, in the last few years(2014-2016) with the improving economy,  builders have been developing new communities in my area; so, I’ve been thinking about new construction again. This first post will focus on two topics, location and the term earnest money.

 

There is a catch phrase that goes location, location, location. In my experience, most new construction for single family homes are developed in desirable locations for people to live.  With that being said, in considering where to build new construction, you want to make sure the area where the new construction is being developed has the amenities that are important to you and or your family. What is considered an important amenity can vary from person to person and from family to family. So, location, location, location does not have a universal meaning.  For example, if you’re married with a family, being under three miles from a grocery store may be a high priority on your amenities list.  If you’re single and don’t cook this may not be high on the priorities list.  A more universal desire may be the desire to have the shortest commute as possible to your job.   Those are pretty simple examples, but do your due diligence. Find out what’s important to you and or your family to help you decide if the location of the new construction will work for you.

 

The next topic that will be introduced is “earnest money.”  Some new construction for single family homes require earnest money before the builder will start to build a home for you.  Earnest money is in its most simplest terms is money to confirm a contract. Earnest money is paid at the time you sign the contract to have your new home built.  For the most part the earnest money in none-refundable.  This means that if you decide that you don’t want to purchase the home after it’s built because of a reason like “change of heart”, then you forfeit your earnest money to the builder.   My real world example is when I purchased new construction. I paid the builder $6000 earnest money to build my home up front at the time I signed my contract.  I ended up purchasing the home once the builder completed construction because I loved the home, but if I had decided not to purchase the home because I had a “change of heart”, the builder would have kept my $6000 earnest money.  Do not get alarmed, you are not required to have $6000 for earnest money on all single family construction. I’ve seen earnest money as low as $500.  Also, don’t get alarmed there ARE ways to get your earnest money back if the builder or seller agrees to put them in the contract! In the next post, I’ll discuss ways to get your earnest money back, if necessary, if the builder or seller agrees to put the  contingencies in the contract. Read my next post for those. Feel free to share on your social media page,  leave comments, and subscribe to this blog.