About 50% of the homes we sell in Austin or new construction homes. So on this on this episode of selling machine, and I’m here to warn you of the top three things you need to be aware of when you’re building new, the number one you need to watch out for escalation clauses. And escalation clause is a part of the contract that lets the builder raise the price after you’ve already gone under contract.
Now, we started seeing more and more of these last year, as lumber costs increased, the price of labor and other supplies went up. And so builders took a big hit on their profits. So it’s not uncommon now to see a paragraph in the contract that says, if their costs exceed a certain amount, they’re going to raise your purchase price by a certain percentage. Now, this is a huge problem if you are a buyer who already bought at the top of your budget, because you can easily get priced out of the home that you’ve been waiting for.
The second thing you need to watch out for our timeline delays. There’s nothing you can do about this. But there are supply chain issues that have hit every single builder. So it’s not uncommon now to have homes be delayed to three months. If you want to complain about it, the builder is happy to let you terminate the contract and give your home to someone else at a higher price. So just be patient, know that there’s going to be delays and you might have to be a little flexible if you’re renting before you get the home.
The third thing is you need to always get your own third party inspection. Because of the mad rush to build homes as fast as possible. We’re seeing more and more mistakes being made. So it’s crucial to get your home inspected throughout the building process. Even though the home is brand new, and you’re guaranteed that you’re going to get a builder warranty. It’s for your own protection to have someone inspect it and get any major issues addressed before you own it. It’s difficult and not always a guarantee to get a warranty company out there fixing things once you’ve moved in.
There’s different types of inspections that you can do along the way, and we have a list of awesome inspectors we can recommend for you. Now don’t let these things scare you off from building a new home. We bought several new homes ourselves, we absolutely love it. There’s nothing quite like owning a brand new home. So we’re here to guide you through the process.
