Top Three Mistakes People Make While Investing In New Construction Properties
Investing in a new construction deal? Make sure that you won’t make the same mistakes which are
often made by uninformed and inexperienced investors. No doubt, new homes offer enhanced safety,
energy efficiency, amenities and better layouts which are highly suited for people with modern lifestyle
and also give the opportunity of customizing spaces. However, if you don’t place your step with care,
costs and expectations can both go out of control. Here, I am discussing some of the mistakes which you
never ought to make.
Settling with the first lender you meet
Most of the builders have in-house mortgage lenders or companies who may or may not offer
competitive prices and terms to you. So, it is always better to shop around with a few lenders for finding
out better mortgage rates. This will help you in comparing which one is offering the best rates and terms.
Moreover, when you have in-house and out-house lenders competing for you, you will have more
leverage for negotiating loan costs and interest rates.
Ignoring or not understanding the warranties provided by the builder
When you invest in a new construction deal, there are two types of builder warranties available to you:
implied warranties and express warranties.
While implied warranties cover the defects in workmanship that affect the new home’s habitability,
livability, and safety based on local building codes and standards, express warranties are those which
cover the problems and remedies a builder is responsible for and the duration of warranty and
mechanism for disputing issues.
Implied warranties come with 10-year liability cut-off period for builders and they are often vaguely
explained. However, builders are concerned about their reputation in the market so the express warranty
is defined in a clearer manner.
It is also important for you to understand that builder’s warranties don’t cover all type of defects such as
products covered by manufacturer’s warranty (appliances), damage caused by ordinary wear and tear,
defects caused by lack of maintenance or negligence of the homeowners, defects in items installed by
other than builder and the defects which are caused by natural disaster.
Opting the upgrades that don’t add to the value of home
When you enter into the builder’s territory, there are umpteen options and add-ons to choose from. So,
while choosing from a wide array of upgrade choices, going for upgrades which enhance the value of
homes is wiser rather than choosing the ones which only make the home look merely nicer.
Upgrades come with a cost, so it is best to spend extra money which will help you realize value more
than other upgrades.
These are the top three mistakes made by investors while making new construction Miami deals. So, if you
are also going to invest in new construction property and want to find a good deal, avoid making all these
mistakes at all costs.