Pros and Cons of Buying Newly Built Homes

How to reduce costs and risks when buying a new house.

There’s something inherently appealing about a brand new house — you get to pick out the countertops, drapes, and appliances, and have everything designed just the way you want it. New houses often come with more space and better appliances, require less immediate fix-up work, and are more energy-efficient than older ones — and all at a competitive price.

But there’s a downside, too. Often, the advantages of new houses are overshadowed by problems such as shoddy construction and lengthy construction delays — or worse, construction stoppages if the developer runs out of money. Here are some suggestions on how to avoid problems.

Choose the Developer, Then the House

The absolute number one, most important factor in buying a new house is not what you buy (that is, the particular model), but rather who you buy it from. A responsible builder understands that he or she has a reputation to protect, constructs homes that live up to the promises, and remains available should issues arise. More than a few builders, however, take your money, throw together a house that starts falling apart on day one, and then stop returning phone calls.

The lesson is, don’t buy a house — buy its builder. To check out a builder, contact:

  • Owners who live in the development you’re considering, if possible. If the development is run by a homeowners’ association (HOA), talk to the association members and the board of directors. If nothing has been built yet, talk to owners in a recently completed development by the same builder.
  • County planning or building department staff who deal with local developers. For the best results, ask your questions positively. “Do Brady and Jones finish their projects on time, with few complaints?” will probably be answered candidly, but “Is it true Brady and Jones is a real schlock outfit?” might make the person clam up.
  • Real estate agents who’ve worked in the area for some time. Agents won’t usually deal directly with new house sales, but they may have handled the resale of houses built by developers and may know their reputations.
  • The state or local licensing or consumer protection agency that oversees contractors, and the local Better Business Bureau. Ask whether any complaints have been filed against the developer.
  • Other homeowners, via homeowner-run websites such as www.hadd.com (Homeowners Against Deficient Dwellings) and www.hobb.org (Homeowners for Better Building).

Have the House Inspected During and After Construction

Hire an experienced contractor or home inspector to visit the house you’re buying at various phases during construction to evaluate the quality of the work. When a house is being worked on, it’s easy to see whether construction standards are high or not — for example, the wiring can be checked before it’s been covered over by wallboard.

Also, you yourself should visit your home site regularly during construction and take a final walk-through to catch last minute finishing defects or deficiencies.

Ask the builder to allow your inspector or contractor to give the home a once-over at least these three times during construction:

  • when the foundation is poured,
  • when the framing is completed, and
  • when the home is finished.