Just because you buy a home no one has lived in before, it doesn't mean things can't go wrong.
Many people jump at the chance to own new construction. For some, it means they can design a home and watch it get built from the ground up. For others, it means they can move into a home in pristine condition that's never been occupied before.
If you're hoping to buy a new-construction home, you'll need to understand what's included in your purchase price and what's not. For example, let's say your home costs $300,000. That may not include certain fixtures like window treatments, which you'll need to shell out extra money for. You also need to make sure you qualify for a specific type of mortgage designed for new builds, depending on the type of new construction you're buying. (If you're building a home from the ground up, the mortgage is different than one for a home that's already standing.)
Before you buy a new-construction home, you may want to dig around to understand what you're getting yourself into. In fact, here are three common new-construction myths that could ultimately come back to bite you.
1. Your home warranty will cover all initial repairs
It's common for new construction homes to come with a warranty that covers repairs during your first year. And some items, like your roof, heating system, and water heater, are generally guaranteed beyond one year. But just because you have a warranty doesn't mean you won't have to pay for some repairs.
That warranty will cover issues that arise due to improper installation or craftsmanship, but it's possible to need home repairs due to wear and tear or misuse. And those repairs will be on you. For example, perhaps your drains get clogged with hair and debris and you need to call in a plumber to fix the problem. That's something you'll generally foot the bill for. Factor the cost of some repairs into your budget so you're not forced to take on debt to pay for them.
2. You won't have major repairs early on
It stands to reason that if you buy a brand-new home, you're less likely to face major repairs early on than if you buy a 60-year-old house. But that doesn't mean you won't get stuck with hefty bills sooner than you expect. If you have an especially brutal summer or two, your air conditioner could wear down in just a few years, even if it's supposed to last for at least eight. Pad your emergency fund so there's money to cover larger repair bills.
3. Your home will be ready when your builder says it will
When you're having a new home built, you'll generally be given an estimated closing date when you sign your purchase agreement. But don't expect your builder to stick to that schedule.
Delays are a common part of new construction, and they can be caused by a host of factors, from weather to bureaucratic permit and inspection holdups. Make sure you have a backup plan in case your home isn't ready on time. For example, if you're told your new home will be ready by June 1 and your current lease expires on May 31, ask your landlord for the flexibility to stay on a month-to-month lease until your new home is officially ready. That way, you won't wind up with no place to go.
There's much to be gained by buying a brand-new home, but believing the above myths could cause you to regret your decision. Instead, know what you're in for and err on the side of pessimism. That way, if you don't face repair costs in your first year, you don't get hit with major issues early on, and your home is ready on time, you'll be pleasantly surprised.
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