Don’t Get Burned – Get a Home Inspection to Save Money

August 24th, 2016

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Don’t Get Burned – Get a Home Inspection to Save Money on Your Next Purchase

Okay, you made one of the most important decisions in your life: you’re buying a home! You found your ideal home. It’s in your desired neighborhood, close to everything you love, you dig its design and feel, and you’re ready to finalize the deal.

But, whoa … wait a minute! Buying a home isn’t like buying a toaster. If you discover something’s wrong with your new home, you can’t return it for a refund or an even exchange. You’re stuck with your buying decision. Purchasing a home is an important investment and should be treated as such. Therefore, before finalizing anything, your “ideal” home needs an inspection to protect you from throwing your hard-earned money into a money pit.

A home inspection is a professional visual examination of the home’s roof, plumbing, heating and cooling system, electrical systems, and foundation.

There are really two types of home of inspections. There is a general home inspection and a specialized inspection. Most general inspections cost between $267 and $370. The cost of the specialized inspection varies from type to type. If the inspector recommends a specialized inspection, take that advice because buying a home is the single most important investment you’ll make and you want extra assurance that you’re making a wise investment.

By having your prospective new home inspected, you can:

  • Negotiate with the home seller and get the home repairs completed at no cost to you
  • Prevent your insurance rates from rising by having sellers make a necessary claim against their policy before you buy
  • Opt-out of the purchase before you make a costly mistake
  • Save money in the short and long run

How Much Money Can a Home Inspection Save You?

A home inspection helps to find potential expenses beyond the sales price, which puts homebuyers in a powerful position for negotiation. If there are any issues discovered during the home inspection, buyers can stipulate that the sellers either repair them before closing or help cover the costs in some other way. If the sellers do not want to front the money to complete the repairs, buyers could negotiate a drop in the overall sales price of the home!

Perhaps even more importantly, a home inspection buys you peace of mind. Your first days and months in a new home will set the tone for your life there, and you don’t want to taint that time with worries about hidden problems and potential money pits.

To help you understand how much money a home inspection can save you, here are some numbers from HomeAdvisor to drive the point home … so to speak.

Roof – Roofing problems are one of the most common issues found by home inspections. Roof repair can range between $316 and $1046, but to replace a roof entirely can cost between $4,660 and $8,950.

Plumbing – Don’t underestimate the plumbing. Small leaks can cause damage that costs between $1,041 and $3,488 to repair. Your home inspector will look for visible problems with the plumbing such as leaky faucets, water stains around sinks and the shower, and noisy pipes. Stains on walls, ceilings, and warped floors show plumbing problems.

Heating and Cooling – Ensuring the home’s heating and cooling system is working properly is very important. Your home inspector will make you aware of any problems with the existing system and let know you whether the system is past its prime and needs replacing. You don’t want to throw down $3,919 to replace an aged furnace. Nor do you want to spend $5,238 replacing an ill-working air conditioner. Replacing and repairing a water heater gets pricey too. Wouldn’t you rather use your savings for a vacation?

Electrical Systems – When thinking of the electrical system, no problem is better than even a small problem. Electrical problems might seem small, but they can blossom into thousand-dollar catastrophes. Make sure your home inspector examines the electric meter, wires, circuit breaker, switches, and the GCFI outlets and electrical outlets.

Foundation – If your home inspector sees that the house is sinking, that means water is seeping into the foundation; cracks in walls, sticking windows, and sagging floor also indicate foundation problems. The foundation is so important that if the general inspection report shows foundation problems, lenders will not lend money on the home until those issues are solved. Foundation repairs can reach as high as $5,880 to repair.

As you can see, a small investment of a few hundred dollars for a general home inspection can save you tons of money and future headaches. To save even more money, you might consider investing in a specialized home inspection as well. A specialized inspection gets down to the nitty-gritty of a concern the general home inspection might have located.

How Much Money Can a Specialized Inspection Save You?

A general home inspection can trigger a need for a specialized inspection because the general home inspector spotted something off about the roof, sewer system, the heating and cooling system, and the foundation. If humidity is high where you’re buying your home, a pest inspection is recommended. Usually, a pest inspection will check for mold as well as pests. Many home buyers also have a Radon test done to ensure air quality.

Roof – Roof specialists examine the chimney and the flashing surrounding it. They also look at the level of wear and tear of the roof. They can tell you how long the roof will last before a new one is needed. They’ll inspect the downspouts and gutters. The average cost of a roof inspection is about $223. Most roof inspections will cost between $121 and $324.

Sewer System – Making sure your sewer system has no problems should happen before the closing because what might look like a small problem can turn into a large problem in the future. If any issues pop up, you can negotiate with the seller about needed repairs or replacements before closing. Cost of inspection will vary; on the low side, it might cost you around $95, and on the high side, it might cost you $790. Compare these numbers to repairing a septic tank, which can cost, on average, $1,435 (though it could reach as high as $4,459), and you can see that the cost of an inspection is worth it when you catch the problem before you buy.

Heating and Cooling System – A HVAC specialist will check the ducts for blockage and for consistent maintenance of the unit. The repairs needed might be small or they might be big, but this small investment will save you headaches and lots of money down the road.

Foundation – A foundation specialist will pinpoint the exact problem with the foundation. The specialist will look at the grade or slope of the home. The ground should slope away from the home in all directions a half inch per foot. Most homeowners have spent between $1,763 and $5,880 to repair their foundation. And the average cost to re-slope a lawn is at $1,705. Most homeowners paid between $933 and $2,558 to re-slope their lawn.

Pest Inspection – Termites eat a home’s wood structure from inside out and can cause thousands of dollars worth of damage to your home. Other pests can turn your dream home into a nightmare. Depending on the humidity of where you live, you should a pest/termite inspection every two years or so. You can start with your potential new home. Most inspections are extensive and cost between $109 and $281. The good news is that most pest management company will guarantee the past inspection if bugs show up.

Radon Test – Radon is a naturally occurring invisible odorless gas that is the second leading cause of cancer. A radon test is a good test to have done as a good habit. The cost of radon test is low and its cost varies from state to state. Here’s more information about Radon.

Steps You Can Take to Save Money Using a Home Inspection

To help yourself save the most with a home inspection, you should:

Attend the inspection – Attending the inspection is important because it’s an opportunity for you to ask questions and get to really know the property.

Hire a Qualified Home Inspector – The Hoagland Group can recommend excellent home inspectors our clients have trusted in the past with great results. You can compare our recommendations with all inspectors who belong to the American Society of Home Inspectors. While the decision of who you work with is always yours, we can educate you so that you make a wise home buying decision.

Zestimates — Truth or Fiction?

August 22nd, 2016

Couple At Home In Lounge Using Laptop ComputerHave you checked your home value on Zillow lately?

What did you think?  Thrilled because the estimate is much higher than you thought and you can’t wait to brag to the neighbors? Or were you simply devastated by the low number?  Hold on! Take a breath… your “Zestimate” may not be as accurate as you think!

According to Zillow “The Zestimate home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location and market conditions.”

No one knows the exact “super secret” formula, but we do know it uses physical attributes of the property, like square footage, bedrooms, etc, which is readily available through public records, along with assessed tax values, nearby home sales and homeowner input.

But here’s the issue.  There are many other things that affect the value of a property.  An online mathematical formula doesn’t know if the kitchen and bathrooms have been updated, if your neighbor had 25 pets, the floor plan was funky or the whole place was painted flamingo pink.

Conceptual image of the search and inspection of the house.Isolated on a white backgroundIf you check out the fine print on their website, Zillow’s FAQs state that “nationally Zestimates are currently within 20 percent of the final sale price 82.5 percent of the time”. Wow!  That’s a significant margin of error. 

So sure, check out your Zestimate for fun, but if you really want to know the true value of your home, hire an appraiser or request a Market Analysis from an experienced real estate agent who knows the area and is in the game every day.

Steve, the Listing Specialist for The Hoagland Group says “I love Zillow! It validates how much clients need a great real estate agent!”   Thanks Zillow!

Don’t Mess Up Your Home Purchase!

July 22nd, 2016

6 Things Buyers do to Mess Up Their Home Purchase

Having sold homes in and around Indianapolis for many years, occasionally we’ve seen buyers do something crazy that jeopardizes their chance to buy a new home, even though their agent and loan officer should have warned them in advance.  So here are some reminders!

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If you’re thinking about buying a new home, we hope sharing these here, will help you avoid the same pitfalls:

  1. Don’t, quit or change jobs during a home purchase – seriously, even if you’ve already been approved for a loan.  The lender will re-verify your income and employment right before closing.  Making a job change is a sure way to be declined.
  1. Don’t make a significant cash deposit to your bank account. Lenders verify funds along with deposits and withdrawals from your bank accounts prior to closing.  Unexplained cash deposits can become a huge headache.  We once had a buyer who sold a car for cash and deposited the money right before closing. Sounds like a great idea, right?  I mean who couldn’t use a little extra cash? Well, it held up closing while the buyer tried to locate the new owner and get a bill of sale that would explain the deposit.
  1. Don’t take on new debt. It’s tempting to buy new furniture, appliances, TV’s… before you close on the new place, but don’t – especially if the purchases will be financed.  And it’s definitely not the right time to buy that new motorcycle, car or boat.  These purchases may throw off your debt to income ratios and cause the loan to be declined.
  1. Don’t skip the Home Inspection. Even if a home looks perfect, there is always the possibility that significant defects could be hidden from view.  Some buyers try to save a little money by doing the inspection themselves or skipping it entirely.  This is NOT the right place to scrimp.  Hidden issues could cost you thousands down the road.
  1. Do not buy without your own agent to represent you. Not being represented by a real estate agent or being represented by the seller’s agent can be a huge mistake.  Now…unless you know this real estate agent very, very well and you have the utmost confidence in him or her being able to objectively look at both sides of the transaction and gear you in the right direction having your best interest in mind, hire your own real estate agent to ensure your interests are protected!
  1. Do not count on a loan pre-qualification issued from a quick phone conversation with a lender to mean you’re actually approved for a loan. With just a little more time and effort and you can get a true pre-approval.  That way when you find the perfect place, you aren’t hit with any surprises when making your loan application.  It’s also a great idea to know what type of financing you qualify for before looking at houses.  Why? Because you don’t want to fall in love with a 1920’s fixer upper that needs a ton of work and is being sold “as is” if you only qualify for an FHA loan, since the property would never qualify.

Make Sure You’re Not Buying a Pig with Lipstick!

July 8th, 2016

So you’ve found the “perfect place”, it’s gorgeous and appears to be in flawless condition — what could possibly be wrong?  Hold on — back up the bus — wait a dog on minute…!  There could be issues lurking behind that pretty face.

So when making your offer, don’t forget the Home Inspection contingency!   

This contingency allows the buyer a few days (usually 7 – 14) to inspect the property and make sure there are no hidden issues that affect the safety or value of the home.  You can do it yourself, or hire a professional, which usually costs $250-$500 based on the scope of the inspection and size of the house.  Significant home repairs can cost thousands, so this is notDon't Buy a Pig with Lipstick! the place to save money — always hire a professional! It will be money well spent and provide you peace of mind that you’re not buying a pig with lipstick!

Each inspection company provides slightly different services, but most offer a visual inspection of the readily accessible areas and systems of the property which include:

  • Roof
  • Exterior
  • Grounds
  • Garage
  • Heating/Cooling
  • Plumbing
  • Electrical
  • Kitchen/Laundry
  • Bathrooms
  • Other Interior Rooms
  • Attic
  • Foundation

It does not guarantee they will find every defect and does not usually include lead paint, asbestos, toxic materials, mold, radon, pools, hot tubs, sprinkler systems, septic systems and wood destroying insects (unless contracted for separately).

Inspections normally last 2-3 hours and buyers are encouraged to attend.  Most inspectors provide maintenance and home care tips along with the inspection so it’s a great way to get acquainted with your new home, especially if you’re a first time buyer.  All of the findings are then emailed to the buyer in the form of a Home Inspection Report.  Usually the findings are divided into the following categories and include photos of any issues, repairs or hazards:

  • Major Repairs/Safety Hazards
  • General Repairs
  • Items to Monitor
  • Maintenance/Improvements
  • General Comments

After receiving the report the buyer reviews the report along with their agent who then prepares a Buyer’s Inspection Response, concentrating on the Major Repairs/Safety Hazard items which need attention.  This document states that the buyer will accept the property if the seller completes the listed repairs prior to closing.  Then this document is sent to the Listing Agent where he will go over it with the seller and they will prepare a Seller Inspection Reply.  This process goes back and forth, similar to counter offers, until both parties reach agreement.

Usually homeowner want to sell and know any “issue” won’t go away, so they are reasonable about making the needed repairs.  Occasionally they aren’t willing or able. What happens then?  The buyer has the opportunity to continue the purchase without the seller making the repairs or they can cancel the sale and their earnest money deposit will be returned.

Want to know what an Inspection Report looks like?  Download one here.

 

 

How Much Will it Cost to Sell My Greenwood Home?

July 5th, 2016

Recent Seller Question:  “What expenses should I expect when selling my Greenwood home and how much money will I actually walk away with when it’s all said and done?” 

 Great Question!  Isn’t this what everyone really wants to know?

How much does it cost to sell my Greenwood Home?

There are several different expenses involved when selling a house in Greenwood or anywhere in Indiana.  Some are part of the actual transaction while others are miscellaneous costs which may be overlooked, like repairs needed to get the home ready or movers and storage.  A seller may also agree to make some repairs to the property as a result of the buyer’s inspection.  Depending on the condition of the property and the extent of the repairs, this could be negligible or extensive, so budget accordingly.

Here are the fees that are part of the actual sales transaction and are subtracted from the seller’s proceeds at closing:

 Brokerage Listing Fees:  This is usually a % of the sale price.  When comparing pricing, be sure to ask if there are additional fees.  Some companies advertise a low % and often have other hidden fees.  Also find out what the broker is going to do to earn their fee.  Not all brokers are the same!  It’s also important to understand that this fee is divided between the listing broker and the agent who brings the buyer.

Title Fees:  It’s customary in Indiana for the seller to pay for an Owner’s Title Insurance policy.  Why?  Because you are guaranteeing the buyer that you have clear title to the property.  The actual Title Insurance premium is based on the price of the property, plus there are other set fees for things like the search and exam of public records to determine whether or not there are any liens against the property.

Pro-rated Property Taxes:  Indiana Property Taxes are collected 1 year in arrears (12 months behind), so when you sell, the buyer normally requires that the taxes be brought current through the date of closing.  Since they aren’t technically due, they can’t be paid to the county, so the amount is credited to the buyer and they then assume payment for all future tax bills.

Home Warranty:  It may be negotiated into the offer that the seller will provide a 1 year home warranty at a cost of approximately $450.

Miscellaneous:  Document Recording Fees, Overnight Delivery Fees, etc.

At the initial seller consultation, and again with each offer/counter offer, the Hoagland Group prepares and reviews a custom Estimated Net Proceeds with our sellers, similar to the sample below.  You’ll always know your bottom line!

This is an example Estimated Net Proceeds and does not necessarily represent every expense since each transaction is different. Real Estate Fees also may be different based on the fees charged by each brokerage.

Sell my Greenwood home

Help! I’m a First Time Seller

June 29th, 2016

Recent Seller Question:  “Help!  I’ve never sold a house before.  Where do I start?  What are the steps in the process?”

 Great Question!

 There are 100’s of steps involved in the home sale process and no two transactions are exactly alike, but we’ve put together a list of the most common activities so you’ll know what to expect!

Listing Process:Checklist for buying homes in Greenwood

  • Invite Real Estate Agent to tour your home (Don’t worry – it doesn’t need to be “show ready”)
  • Ask lots of questions & decide if this is who you want to hire — if not, keep looking!
  • Determine the List Price based on your Broker’s recommendations
  • Sign Listing Contracts
  • Get all paperwork filled out and ready for listing
  • Staging recommendations (#1 – declutter)
  • Prepare property for its debut to the public (think “school picture day” — clean & looking it’s best!)
  • Photography appointment
  • Sign in the yard and property goes live (now the neighbors know — let the gossip begin!)
  • Marketing plan rolled out  ( now everyone knows!)
  • Showings & feedback (what buyers thought of your property)
  • On-going pricing & staging strategies based on activity and feedback

Offer Process: 

(For your planning purposes, the time from accepted offer until day of closing usually takes 30-45 days.)

  • Receive an offer & continued negotiations until agreement is reached
  • Inspections & negotiations on requested repairs (they always find something!)
  • Appraisal completed & value approved by buyer’s lender
  • Agreed upon inspection repairs completed by seller (or contractors)
  • Buyer loan processing continues
  • Packing — lot’s of packing!
  • Coordinate movers, trucks, storage units…  (calling all friends and family)
  • Clear to close from lender (underwriter loan approval — Happy Dance!!!!)
  • Final Utility Reading (plus stop or forward mail, papers…)
  • Celebration Table (more commonly called Closing!)
  • Moving Day (calling all friends and family)
  • Transfer Possession (normally 0-3 days after closing)

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A great agent will be there every step of the way and will walk you through the process from start to finish!

Why You Need to Call a Lender BEFORE You’re Ready to Buy!

June 22nd, 2016

Considering buying your first Indianapolis area home?  Then you may also be wondering how high your credit score needs to be or when you’ll be ready.  We recently received a similar question from a first time buyer:

“We are looking to buy a home here in a couple years and were wondering if you could give us a little bit of insight into the process. We are currently rebuilding our credit, and paying off debts. What sorts of things do mortgage companies look for when deciding whether or not to approve loan requests?”

 Our recommendation is to begin a conversation with a good lender right away.  You may think “shouldn’t I wait to talk to a lender until my credit and finances are in perfect order?”  No!  Loan officers consult with potential buyers every day – so don’t be embarrassed or overwhelmed if you’ve missed a few payments, have a bankruptcy in your past or some other event that may be causinWe Trust Kristing your credit to be less than ideal!  They want to help you!

And it’s easy!  Information gained from a quick phone conversation will enable a good loan officer to provide specific advice about things you may need to do now to be ready to purchase a home in the future.  They will help you figure out the best game plan and make sure you don’t do something that could actually hurt your credit score.  For instance, wouldn’t you think paying off debt is the best thing to do? – Not always!  A lender may suggest that a better solution would be to make sure each revolving balance is below 30% of the high credit limit.

So how good does your credit need to be?  Generally speaking, at least a 620 score, and the debt to income ratio should be somewhere between 41% and 49% depending on the client.

 

It’s also a good idea tocredit report clip art pull a free credit report directly from the repositories once a year.   Don’t bother spending extra to get a credit score, because the consumer credit scores vary from the scores a

 

lender gets when they pull them.  Just get the report and share it with a loan officer who will be able to point out any red flags that need attention.

Even though you may still be a couple of years out, it’s never too early to get a lender involved, so you’re ready when the time is right.  Then the loan pre-approval process will be a piece of cake!

Ready to start the process?  Kristin is one of our favorite lenders and she’s super helpful and easy to talk to.  Don’t wait – give her a call (and be sure to tell her we sent you)!

Kristin Jones
Senior Manager
317-506-3944
kjones@jonesmortgagegroup.com

Get  “Step by Step Instructions to Pull Your Credit Score for Free”  Click Here to Download

Seller’s Market? Buyer’s Market? Help!

May 23rd, 2016

So what’s the difference between a Buyer’s Market and a Seller’s Market?  Should I care?

Like most professions, real estate has its own vocabulary and to those not “in the business” at times it may seem like a foreign language!   There has been a lot of press this spring about a “Seller’s Market” in Indianapolis.  What does this mean and how is it different from a Buyer’s Market?

Happy sellersIn a Seller’s Market there is a shortage of homes available for purchase, which in turn increases the odds of multiple offers and drives up prices.  Just last week the Hoagland Group showed a property in Irvington the 1st day on the market and there were already 8 offers!  When sellers have multiple buyers fighting over their property, sellers have the upper hand in the negotiations.  They will be expecting a good price and reasonable terms.  They may ask buyers for things like delayed closing dates or days of possession after closing at no charge.  There is also an increased possibility that a seller will not be willing to complete repairs during the inspection negotiations.

On the other hand, a Buyer’s Market is when there are plenty of homes on the market for buyers to choose from.  This allows buyers to be very selective (“picky”) about every feature of a home or neighborhood.  Sellers need to have their property staged correctly and in excellent condition if they want to be “the one”!  Buyers have the negotiating power.  If they can’t come to terms with a seller, they move on to another property and the seller will be left waiting on another buyer.

So a Seller’s Market is great for sellers – right?  Yes, most will receive top dollar, however, many sellers are also buyers.  Because their home is likely to sell very quickly, they will be under a lot of pressure to find their next property in a matter of days, or do the dreaded “double move”, where they go to temporary housing prior to finding their new place.

Check out this related blog, “What Buyers can do to Win their Dream Home in a Seller’s Market”.

7 Things Buyers Can Do to Win Offers in Sellers Market

April 21st, 2016

It’s been awhile since Indianapolis has seen a seller’s market.  How does this affect buyers? Inventory is low and they are fighting over homes.  Have you heard the recent horror stories? Buyers who missed out on one or even several great homes due to multiple offers or sales that happened so quickly they didn’t even get an opportunity to look at a property.  What’s a buyer to do?  Here are 7 tips buyers can do to help them win their dream home in this hot market.

1. Get your financials in Order

Talk with a local mortgage broker BEFORE looking at homes.  We suggest doing this even months before you’re ready.  Yes, you will have to provide them updated documents when you’re ready to go, but you’ll have a plan in place.  If there is anything incorrect or something that needs work on your credit score, this provides time to get these items resolved.  When the time is right to begin looking for your dream home, your financials are in order and you will have a solid pre-approval to tell sellers you’re a serious and well qualified buyer.

2. Find an Experienced Full Time Agent to Represent You

Why is this important?  We see buyers missing out on great properties because their agent has other obligations and isn’t available to show them properties or doesn’t even understand what the current market is or how to adapt.  You want to work with someone who is immersed in real estate, understands what it takes to win in competitive situations and is available when you need them.

3.  Pounce Quickly

Some new listings are receiving offers within hours of going on the market.  If you’re looking in a hot area, put a plan in place so you can act quickly when a great new listing hits the market.

4.  Be Prepared to Offer Full Price — or More

Not all listing agents price correctly, so don’t get hung up on the list price.   Rely on your knowledgeable and experienced agent (just one reason why #2 is so important!) to help you determine the true market value and then offer accordingly.

5.  Be Smooth

Make your offer so smooth, the seller will have trouble moving on to another one.  What do I mean?  Price isn’t the only term presented in an offer.  Have your agent talk with the listing broker to see if there are other terms which are crucial to the seller’s situation.  For instance, maybe they want their kids to finish out the school year, if so, do you have the flexibility to build that into your offer?  Maybe there is a specific closing date the sellers need in order to also close on their new house.  Try to make this happen.  In other words, be extremely easy to work with.  If a buyer submits an offer with many demands, it may not matter if their price is the highest.  Seller’s don’t want to work with a difficult buyer.

6. Don’t Ask for the Moon

Asking for the seller to help with buyer closing costs is common in the Indianapolis Market.  However, in a seller’s market, when you want to do everything you can to make your offer “the best”, consider other options.  If you have the funds, pay your own closing costs.  If not, consider asking a relative for a financial gift letter.  If 2 offers have the same price and similar terms, but only one is asking for $2500 in closing cost assistance, who do you think the seller is going to select?  This also isn’t the time to ask for items the seller has not included in the sale, so avoid the temptation to ask for more appliances, furniture, playsets, etc. Get the house first — then see if the seller is willing to leave or sell any of these items.  Often they don’t want to move them and will be happy to offer them for free or a very reasonable sale price.

7.  Connect on an Emotional Level

Submitting a personal letter to the seller along with your offer moves the transaction from “all business” to “emotional”.  Many sellers have strong connections to their homes and the memories created there.  Providing insight into why you love the house and how you are the perfect fit to continue the journey may be just the thing that tips the scale in your favor.

New Home Construction: What You Need to Know

April 19th, 2016

Whether to buy a home in Greenwood or have one built is yet another decision to make during the home-buying process. If you decide to go with new construction, a real estate agent can be a powerful advocate in your corner as you negotiate upgrades, a move-in date and other terms with the home builder. 

rr_newconstruction Below are some basic pointers to prepare you for the journey ahead: 

Selecting a builder

Shopping for a large production or custom home builder can be a daunting task. Start by defining what architectural styles appeal to you and then seek out the builders in your area who offer those styles. Due diligence is essential. Ask friends for referrals to get firsthand accounts; verify the builder’s state license status, if applicable; and check whether they’re certified by the National Association of Home Builders. 

Architect and clients.The builder representative and your real estate agent

While a builder representative is the friendly face giving you a helpful tour of the model home; their ultimate goal is to sell on behalf of the builder. His or her role is to provide a wide range of information to help you in your decision-making, from building restrictions, roads, and easements to inspections, warranties, rebates, and upgrades. A real estate agent, knowledgeable in new construction, will be able to help you wade through all the data and point out the upsides and downsides of each line item. Your agent also can look out for your best interests in reviewing the builder’s contract, which often contains more legal jargon than consumer-friendly language. 

It’s all about timing

Market conditions greatly dictate a builder’s incentive to make a deal you cannot refuse. When a builder has inventory on his hands, his carrying costs start adding up. When this happens, a builder might be more amenable to strike a favorable deal, whether it’s throwing in upgrades or taking a bit off the asking price. A real estate agent can help you know when market conditions are right for these benefits. Also, watch for builder close-out sales. Builders promote these special events when a new subdivision is near completion but empty inventory still remains. 


A word about paying up…

While there are always exceptions, most builders require a deposit when a purchase agreement is signed. They also require that the buyer pay for any upgrades prior to closing. If you decide to back out prior to closing, unless the agreement states otherwise, you will lose that money. Make sure you understand every detail in the builder’s contract before signing it. 

Contact us about buying your home



All Information believed to be reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change, or withdrawal. Copyright © 2017 Metropolitan Indianapolis Board of REALTORS®. All rights reserved.