Under Contract with Your New Construction Home Next Steps

After visiting different builders, and exploring different options, you’ve put in your offer for a new home construction and it’s been accepted.

Welcome to the next stage of the home buying process! Purchasing a New Construction home is a slightly different process than buying a resale home. We are all at the mercy of the builder from this point forward in terms of dictating timelines and procedures. This information will be a great resource for you throughout the process. Depending on where your build is in the process, you may be in a bit of a holding pattern for a while and won’t hear much from us or the builder. Rest assured, that we are keeping track of what’s happening with your house and we will jump into action as soon as we are needed. Your primary focus for the first few weeks of the process is getting your loan conditionally approved by the lender. Besides the loan end of things and a few possible meetings with your Construction Manager, there is really very little that happens on your end until the last 4 weeks before closing. So, for now, be diligent about getting the lender everything needed for your loan and otherwise, just sit back and look at Pinterest for decorating ideas. We will all let you know when we need you to do something.

Communication & Contacts

From this point forward, you will be placed in Marijean’s “department” for most contract related items. Marijean can be reached directly by phone or text at the Team Reith 2 line, 813-419-8304 for all contract, lender, build status and closing related details. Bryan’s contact # is our main Team Reith number. You will now begin seeing the admin@teamreithrealty.com address cc’d on all messages. Please add it to your safe list. Within the first few weeks Marijean will start a group text including you, Bryan and Marijean and, in some cases, your builder rep. Please text Marijean ASAP with any additional phone numbers that need to be included.

Contract Documents

It usually takes about a week for the builder to have your final contract back to you, signed by their “powers that be”. Your Builder Rep will send you the final version once completed and usually sends it to us as well. If we don’t see it after 2 weeks, we will ask you to send it to us.

Stay in contact with your Lending Team

Now that we’re under contract, your Loan Originator and team will jump in with both feet to get your loan approval. Keeping the lines of communication open with your Loan Originator is very important.  We love to be cc’d on messages when appropriate so that we can see how everything is progressing. Communication amongst all parties is the key to a smooth transaction. We will stay in good communications with him/her throughout the process. 

Home Inspection

Home inspections are optional in a new build, but we do encourage having one done. Just because it’s new doesn’t mean it’s free of issues with wiring, plumbing etc. An inspection will cost you approximately $400. We can set it up for you and attend for you if you need us to. We will make all necessary arrangements with the Construction Manager for your inspection if you decide to have one. We have qualified inspectors that we work with, or if you have one that you prefer to use that is fine. Home Inspectors must show proof of licensing, bonding and workers compensation insurance. Some builders have a program where they have the home inspected by a third party. In that case, it may not be necessary to have another home inspection done. Also keep in mind that most builders have a first year “bumper to bumper” type warranty. Anything that results from poor construction will be covered for the first year. Keep a list on your refrigerator of anything that you want addressed by the builder, then report them all at once through the builder’s portal a few months before your one-year closing anniversary. Please notify us as soon as you make a decision regarding an inspection so that we have ample time to make arrangements.

Homeowners Insurance

It is a requirement that you have a homeowner’s insurance policy on your home if you purchase with any type of loan. The builder is going to offer you insurance from their company, but we encourage you to compare policies and not just go for the lowest price. Their price will most likely be the lowest you’ll find, though, so if the payment amount used by the lender to get your approval is based on that number and you are maxed out at that payment amount, it would be best to just stick with the builder’s insurance company and make changes after closing if you want to find better coverage. You must have your Homeowners policy set up within 14 days of closing, but you can start looking at your options right away. It is a good idea to use a local agent who can offer several different insurance company options to you through one agency. We have a few agencies that we work with on a regular basis who can send quotes to you if you do not already have a preferred local insurance agent. Once you select a policy, your insurance agent will send an insurance binder to the lender, which is needed in order to get loan approval. You will pay your homeowners insurance premiums as part of your monthly mortgage payment. Your lender will have already allowed for this in your quoted payment estimate.

Appraisal

Your lender will require that you have an appraisal done on the property approximately 2 weeks prior to closing. The lender makes all of the arrangements for the appraisal. This is the only item, besides the home inspections that you will need to pay for upfront, prior to closing. The purpose of the appraisal is to determine that the property is “worth” the value of the loan. This value is determined by comparing home sales in the same neighborhood over the most recent 30-90 day period.

Conditional Approval

Your lender will send you a “Conditional Approval” containing a long list of items that you need to deal with in order to achieve your final loan approval. Don’t be alarmed by all of the conditions that you receive. EVERYONE gets a condition list. Just plow through them one by one as soon as possible.

Loan Approval & Interest Rate Lock

Some builders require that loan approval be completed by the lender in the first 45 days of the contract, even if the build is projected for a year out. Others don’t require loan approval until 30 days before closing. It’s important to understand that many contracts state that once this approval is provided, you would be at significant risk of losing your deposits if you cancel after receiving notice of loan approval for any reason. Ask your lender about an extended rate lock. We highly recommend paying for a rate lock, especially if you are building from the ground up. No one can predict what rates will be a year from now, or even 3 months from now. A rate lock will allow you to lock in at today’s rates for a fee. In most cases, your rate can go down but can’t go up.

Utilities Start Ups

You may contact the utility companies 3-5 days prior to closing day to arrange start up. The builder will pay for the day of closing, and in most cases, for a few days after. We recommend setting them up to start the day after closing. We will send you a list of your utility contacts no later than a week prior to closing.

Closing Day

The builder’s title company will send you a notice regarding scheduling closing. You will want to plan to take the whole day off of work on closing day if possible. The day before closing you will need to wire your closing funds to the title company handling your closing. Your lender will advise you as to what that exact amount is. Closing takes about an hour and we will be with you through the whole process. Once your transaction is closed you will be given your keys and you can move in any time.

We’re very excited for you and we are absolutely thrilled to be walking through this journey with you!

Congrats Again!
Marijean & Bryan