Step-By-Step Process to Building a New Home

You've decided to build a new home...now what?

I. FINDING THE HOME AND SIGNING THE CONTRACT

A. Your agent will research the market to find builders that fit your needs. You and your agent will visit model homes and inventory homes, visit with the builder representatives, and view available lots and floorplans. Once you decide on the builder, lot, and floorplan, you are ready to contract.

B. Your contract is about 10-30 pages of paperwork to spell out what price you're paying, what type of loan you're getting, estimated closing date, how closing costs will be divided between you and the builder, and your rebate from Heights Discount Realty.

C. Earnest money
You will need to submit an earnest money deposit. This may range from $500 on up, depending on the builder. Your check will be deposited with the title company that is handling your closing. The earnest money will be credited toward the sales price when you close. If you cannot qualify for the loan within the allotted time period, your deposit will be returned to you.

II. AFTER CONTRACTING
A lot will be happening behind the scenes, but these are the steps you will be involved in from the time your offer is accepted until the day you close on the home.

A. Title company
The contract and earnest money are sent to the title company that will handle the closing.

B. Apply for a loan
Try talking with a couple different lenders to compare their programs. If the builder has "preferred lender," find out what concessions the builder will make if you use their lender. Ask each prospective lender for a "Good Faith Estimate." This is an estimate of how much your monthly payment will be, what your interest rate will be, and how much in closing costs you will have to pay. Choose your lender and apply for a loan.

C. Home Inspection
Although not required, you may choose to have the home inspected by an independent licensed inspector. An inspector will check the electrical, plumbing, roof, attic, foundation, and more. With a new construction home, the inspector may inspect a few times, at various stages. This costs from $180 on up, depending on the size of the house. Nothing on the inspection is required to be repaired; it's just recommended. Another option on a brand-new home is to wait until your builder's warranty is nearing its expiration date, and then have the home inspected.

D. Appraisal
After your apply for your loan, some lenders may ask you for a check so they can order an appraisal of your property; other lenders order the appraisal and send the bill to the title company to be paid at closing. An appraiser will give his opinion of the value of the home. The lender requires this appraisal before they will make a loan. An appraisal costs around $350-$400.

E. Inspections
Your builder may ask you to inspect the home during various phases of construction to verify that everything is being built the way you want it. Usually the week before closing, we will walk through your home with the builder and you can note anything that is not complete to your satisfaction.

F. Insurance
You will need to have a homeowner's insurance policy in place prior to closing. Shop around for rates. Make sure to ask about their water damage coverage; there have been a lot of large water/mold claims in Texas in the last several years, and some companies will not cover water damage or they will add an additional premium. Your insurance company's name and phone number will need to be given to the title company before closing so they can add the insurance amount into the closing costs.

G. Utilities
Near your closing date, you will need to set up utilities for your new home. Check our website at www.hd-realty.com/community for contact information on some of the common utility companies.

III. READY FOR CLOSING

A. Walk-thru
A day or two before closing, we will do a final walk-thru of your home. If everything is satisfactory, we will then go to closing at the title company.

B. Closing
The selected title company will handle the closing. We will meet at their office and sign all the required paperwork. Prior to closing, the title company will notify you as to the exact amount you need to bring with you. You will need to bring a picture ID and a cashier's check for the total amount due.

C. Move in!
Use your new key to lock and unlock each door of your home. This will release the pins inside the lock and the builder's key will no longer work in your locks. Take a copy of your closing statement to the post office and they will give you mailbox keys for your new home.