Buying a house can a long and complicated process and when it comes to buying new construction in Orange County, there are some extra steps to consider in the process. Purchasing a newly constructed home has its pros and cons but if you’ve decided it’s right for you then it’s time to learn about the process from finding the perfect community to move in day.
If you’re interested in purchasing new construction in Orange County then it’s time you learned what steps to take.
1. Get a buyer’s agent
Buying new construction anywhere can be tricky so the best place to start is with a great agent. Builders have sales agents that will help you through the process but ultimately they are paid by the builder to keep their company’s interests in mind at all times. A buyer’s agent representing you will save you money, hassle and always keep your interests ahead of the builder’s.
Traditionally a buyer’s agent is paid by the seller. When it comes to buying new construction you may have to directly pay your agent but you can add that fee to the sales price. This ultimately is worth it because a good agent can you save you thousands more than their commission is worth by negotiating lot prices and securing you credits at the design center.
2. Scope out your choices
The first thing to do when searching new homes for sale in Orange County, California is of course to figure out which city or area is the best fit for you and your family.
New home developments in Orange County are gaining steam now that the market is recovering which means there are more communities than ever to choose from so deciding which area you want is a start. Once you’ve narrowed down your search to a few ideal communities then it’s time to look a little closer to find which one to choose.
For each community compare warranties, prices and contracts. Narrow down your favorite locations and look into the pros and cons of each to decide which community is the best for you. You should research the builders in each community as well to find a reputable company.
For example, did you know that KB Home has been building homes since 1957 and on average saves homeowners $1,000 annually on energy bills because of their new Energy Star standards? Getting to know the different builders in Orange County can be a big help when deciding which new development is right for you.
3. Submit an offer and sign a sales contract
It is crucial to have your agent or legal representation look over the contract before you sign. It’s full of fine print and legal speak and once you sign, it’s legally binding.
Notice you sign the sales contract before you sign the closing documents so although it may seem like you still have wiggle room, you can’t back out of the deal once you’ve signed that sales contract.
Be smart and protect yourself to that your home purchase goes smoothly. Make your offer contingent the home passing an inspection and appraisal. Also, make sure to verify upgrade options and pricing so that you understand fully your choices and responsibilities.
Some contracts will give the builder the right to choose upgrades for you if you don’t submit your request in time. Having an agent to look over the contract with you and perhaps a real estate lawyer as well will protect you from surprises like these.
4. Apply for a mortgage loan
Applying for a mortgage goes hand and hand with submitting your offer and signing the contract. Most sales contracts require that you have proof of a mortgage loan application. You can also usually get a deal if you decide to finance with the builder’s preferred lender.
When you apply for a mortgage loan, take your time deciding what type of loan is best for you and your financial situation. Weigh the pros and cons of fixed rate vs. adjustable, consider your options if you’re a new home buyer and down payment assistance programs and find the right mortgage to fit you.
5. Customize your home
This is the fun part! The beauty of buying a new home is the fact that you can customize and build your home from the ground up. Just keep in mind the more you personalize your home, the more your price goes up. The fact is, for most builders the profit margin is the highest in upgrades.
Consider which customization you need and which ones you don’t. Your agent can help you decipher which upgrades and customizations are good deals from the builder and which ones you can do yourself for a better price.
Make sure the upgrades you choose are approved by your lender. If you lender will not finance all of your upgrade selections then you may be required to pay for them out of pocket.
6. Get an inspection
Yes, you need an inspection even though it’s a new home. If there are any problems or issues, remember that you can use these as negotiating tools. Remember, you should have put a contingency in your contract so you’re protected if the house does not pass this inspection as well as the appraisal for your loan.
7. Sign the Closing Documents
The last thing to do is attend the closing to sign the final mortgage documents. The closing process is more or less the same with new construction as it is with a resale home. You will need to bring all funds necessary to pay your lender and other parties in the form of a certified check. You can wire the money but this typically complicates the process by adding an unnecessary middle man and waiting period. A check certified by your bank is the easiest way to bring your payment funds for closing. And once you’ve signed all the paperwork, the new house is yours!