7 Tips For Working With a Home Builder In Utah
Setting The Expectation
The Utah housing market is booming right now and it can be difficult to find the perfect home in Utah, or anywhere in the country for that matter. Building a home is always an option, but intimidates a lot of buyers with good reason. It’s all about creating the correct expectation and going in prepared.
Buying new construction is a different process than buying your typical pre-built home. What’s included, what’s not, and what’s hidden in that massive contract depends on the builder that you use. As with any situation where you’re moving or about to spend a lot of hard earned money, it’s important to go in prepared – and that means asking the right questions.
The first interaction you’ll have with the builder – and in fact, the first several, at least – will be with the builder’s sales representative. These early meetings are your chance to ask all of the questions you might have regarding costs, labor, and other essentials that you need to know about before jumping in. Write your questions down before you go in so that you can be sure not to forget anything important, and don’t be shy about getting the answers that you need. This is a major purchase, and you don’t want any surprises later.
Not sure exactly what you need to be asking about? We will get to that!
Go In Prepared With Your Team!
Know before you go! The sales agent in a model home is paid by the builder to present and protect their interests, not yours. There are lots of things in a contract you may not be aware of allowing the price to go up and the deadlines to be missed! Do yourself a favor and take a professional who is on your team! When looking at new builds be sure to take your Realtor with you. if you go without representation you may lose the right to have one. That means you do not have an advocate looking out for your best interests and protecting your investment. Remember that your Realtor is being paid by the seller, that means you get the very best advice, support and advocate for FREE.
Take my FREE Utah Home Buyers Workshop
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🎬 Video Tutorial detailing all you need to know about the home buying process here in Utah; AND my 20+ page 📘 Buyer’s Guide loaded with information and steps to buy a home in Utah, including:
- The Do’s & Don’ts of Mortgage Financing
- Home Search Tips & Community Guides
- What Happens Once You’re Under Contract
- Your Ultimate Moving Checklists
Build With Resale In Mind
This is probably the single most important aspect of building a home. Always think about being able to resale the house down the road, even if you think you will never sale. If you’ve been looking at buying, you’ve probably walked through quite a few homes that after viewing them you wonder what the people who built it were thinking. And then you’ve probably walked through older homes that are neutral and timeless and you could easily envision your family moving right in.
It’s ok to customize your home to fit your needs, but try to stick with a popular floor-plan and timeless features if at all possible. I know it kind of takes the fun out of building, but it will save you a lot of trouble down the road, I promise. Try to find as neutral a color palette when it comes to finishes and flooring add color with paint, spots of wall features and decor.
Focus on Location, lot size, and open living space. A beautiful large home with no yard can be worth less to buyers in the market. Pick a wow factor like a great kitchen or build out an amazing, to die for backyard. Make sure the Primary Suite is adequate and spacious. Showing multiple homes every week those are the things that really move single family homes in our market. When it comes to Town Homes, try open it up with large windows. Light and details are what make a Town House feel more like a home. It’s a small space so going a little more on the kitchen and bathrooms without blowing the budget can go a long way.
Do Your Homework
Ask The Builder For References And Interview Several Builders
Building a good relationship with your builder will determine how your home building experience goes. If you hire a builder who you are unhappy with, you will probably not be happy with your home after it is complete. Do A LOT of research when choosing a builder. Ask him or her for at least 5-10 references and check every online review you can possibly find. Interview several builders before you make a decision. Ask them about their process in detail and if they get behind schedule, how do they handle it? Ask A MILLION questions…and then a few more. There is not going to be a perfect home building experience, but how a builder handles hiccups is a huge factor.
Some Good Questions To Ask
Is the lot cost included?
When you’re exploring new construction options, you’ll see that each plan comes with a base cost. This is the cost of the structure itself, as well as base interior and exterior features (we’ll get into those in a little bit). What may not be included is the cost of the land, so be sure to ask if the lot cost is figured into the base.
If the lot cost is included, ask if there are premium costs for certain lots. It’s possible that the base cost does include the lot, but the remaining lots in the development all have added costs for certain features that you can’t opt out of, such as look-out windows in the basement or wider yards. If the lot cost is not included, ask what it is (and whether there are additional premium costs) and factor those into the base price for the house.
How long will building take?
It’s important to know what you’re getting into timing-wise with a new construction build, particularly if you have a house to sell first or you’re going to be renting. While the building process is prone to delays and you won’t be able to get a finite schedule for how long the build will take, you’ll be able to get a general idea of what you can expect. Be sure to also ask if the build time includes the time it takes to get the permits, since those will typically take about 30-45 days to obtain.
What warranties are provided with the house?
Just because a home is brand new doesn’t mean that no problems will arise. Fortunately, most new construction homes come with one or more warranties that protect you in the event of a mishap early on, including a short term whole-house warranty and a longer structural warranty. Ask what the warranties include and how long they last. While you can always buy your own home warranty, you should expect that the builder will cover you in some way for at least the first several years.
What are the standard finishes?
Does a base cost look too good to be true? That might be because the builder is expecting you to spend big when it comes to finishes like flooring and countertops. Ask what types of finishes are included, and better yet, go through the model unit with the sales representative and have them point out what’s standard and what is an upgrade. You likely won’t meet with the design center until after you’ve gone under contract, so it’s important to figure out early what sorts of finishes and appliances you can expect to be included in the home’s base price.
Are you allowed to purchase your own appliances or materials?
Had your heart set on butcher block countertops but the builder doesn’t offer them? It’s possible that you may be able to purchase them yourself and then have the builder install them. Alternately, some builders won’t let you purchase your own materials, but they will let you bring in your own appliances, even on items that are included in the sale, like sinks and toilets. Keep in mind that, in terms of appliances, you probably will have to make some purchases on your own, such as washers, dryers, and refrigerators.
If you can bring in your own materials or appliances, will you get credits?
Let’s say the base price of your new construction home includes a kitchen sink worth $200, but you’d like to upgrade and purchase a sink on your own that costs $400. Will you get $200 off the purchase price for not using the sink that’s included in the base? Some builders offer credits for any upgrades or self-purchased materials or appliances, while with others you’ll just have to eat the cost of the originally included item. Credits are a nice touch, but they’re not usually standard, so it’s best not to go in expecting that you’ll get money off the base cost for purchases like these. In general, builders don’t like to lower the base cost, but if they do offer credits, that’s a win for you.
Is landscaping included?
Depending on the size of your yard, landscaping, including sodding and putting in trees and plants, can set you back several thousand dollars or more. Is that a cost you’ll have to factor in on top of the home purchase? Some builders include your basic yard work, while others leave you with unfinished land that becomes your responsibility to landscape (and generally must be completed in a set amount of time, per the contract). Ask whether landscaping is included, and if so, what that entails and if there is any sort of warranty on the materials so that if your newly sodded grass dies right away or some other mishap occurs you’re not responsible for fixing it.
Does the contract include a cost escalation clause?
New builds are notorious for last minute surprises, but you don’t want to be on the hook financially if it happens. A cost escalation clause allows the builder to charge you for any unanticipated costs that arise as a result of necessary labor or materials. So if lumber prices go up before the builder has purchased the materials for your flooring, or an unexpected delay adds a few weeks onto the build, you’re on the line for those costs. If you’d rather not deal with the stress of unanticipated costs, find a builder that doesn’t include a cost escalation clause in the contract.
Are there any homeowners rules or regulations?
Even if there is no homeowners association for the development, the builder may still set some guidelines as far as what’s allowed and what’s not on your property. For example, you may not be able to use a particular type of fencing or install a shed in your backyard. It’s better to ask this question early and know what to expect than to move in and find out that you can’t bring into fruition certain plans you had for the space.
Are there any financial incentives for using the builder’s preferred lender?
Some builders offer discounts on closing costs if you obtain your mortgage through a company that they have a relationship with. Ask if these sorts of financial incentives are offered, but don’t make your final decision about where to get your mortgage based on the discounts alone – you may still be able to find a better deal through other lenders. It’s still good to know however if there are benefits to working with the builder’s preferred mortgage company.
Find A Builder Who Will Carry The Construction Loan
This might be a controversial topic and I might get arguments about it, but if you aren’t paying cash for your house, I would avoid doing a construction loan through a bank during a booming real estate market. My reasoning for it is that most build jobs are taking longer than 6-9 months right now and most banks only want to loan out on a build job for 9 months. If your build job goes over 9 months, they will start charging you fees. I had a client who built recently and paid almost $40,000 in late fees on their build job because it took over a year to complete.
If a builder has the funds to carry the construction loan, they most likely are busy and have a steady stream of work which means that they have good sub contractors who will complete the home in a reasonable amount of time about 9-10 months for a busy builder. It’s not uncommon for a build job to take a year right now because there is a shortage of construction workers and sometimes materials. It may be a pipe dream in this market to find a builder to carry the construction loan but it is certainly worth a shot.
Pick An Existing Floor Plan
I might be taking all the fun out of building, but you will save a lot of money if you can find a floor-plan you love from a designer you love. If you want to have custom plans drawn up, the cost is going to skyrocket. Plus, if you choose a floor-plan that has been built, they will have worked out all the kinks. Most builders have certain design for certain lots. Going with this option is most likely more affordable and much quicker. If you would like a list of builders, custom architect – designers, feel free to reach out to me. I love the process of building and enjoy the design steps as well. I would love to be your Realtor during a new build.
Enjoy The Process
This sounds cliche, but you really do need to make a conscious effort to enjoy the journey, or every little hiccup is going to drive you crazy and you will resent your home after it’s built. The experience you have will completely depend on you, it really is a choice and as long as you do your research and make smart decisions along the way, the best thing to do is choose to enjoy the journey!
If you have a clear and realistic expectation and you commit to embrace the roller coaster of chaos, it can be an amazing opportunity to create the home of your dreams and a new network of great friends!
If you have any questions about building in Utah, please feel free to contact me at any time! I would love to talk to you more about the process! There are so many different neighborhoods and builders in the area it can be extremely intimidating…but well worth the effort in the end! If you have built and have further information to share, please comment below! I would love to hear your thoughts on the building process. I will be sharing more on my social media about new communities, lots being released and my favorite builders!
Build your dreams with passion and a happy heart!
