Page 6 - Butterfly Realty LLC

Different Types of Homes

Resale

A resale home was previously owned and/or occupied.

New Construction

Newly built home that has not been previously occupied.

Some challenges Buyers experience during this process are:
• Contracts-It’s important to note that the agent on duty at new construction communities work
for the builder and represent the builder. Buyers looking/interested in purchasing a newly built
home should always have their own representation. Since builders have their own contracts, it is
important the Buyer has someone looking out for their best interests by reviewing the contract
and utilizing the expertise of your hired buyer’s agent.
• Timelines - Builders estimate completion dates but there can be many reasons for delays.
Timelines are often changed/extended and the builder typically has an automatic extension
written into their contract.

• Standard vs. Upgrades – It’s important to find out the difference. Many model homes are
shown with upgrades and upgrades can add up quickly and a required cash deposit is usually to
be paid in advance. Paid upgrades are also non-refundable and adding upgrades can affect your
loan approval as it can cause an increase in the sales price of the home.

• Earnest Money – In most cases, once you have an accepted offer with a new construction
home, you are committed to purchasing the home regardless of anything that happens during
the process. The builders’ contracts are written to protect the builder. If you decide at some
point in the process that you do not want to buy the home, you will often risk losing your
earnest money.
• Warranty –It’s important to get in writing from the builder, what type of warranty is provided
and get detailed documentation on what is included in that warranty.

• HOA-It’s important to know if the home owner association (HOA) is voluntary or mandatory.
You also need to know the initiation fee, monthly/yearly cost, and if there are any special
assessment fees. Other needed information is what is covered with the monthly/yearly cost.