Tactics for Purchasing a Newly Constructed House with a Florida Home Loan

The world of online Florida home loans is taking off. At the same time, existing home sales are be slowing down, but individuals are still signing up to newly construct the house of their dreams. Whether this is meant to be a second home or a primary residence, the issue remains the same:

• What are the most important points to focus on in such a sales contract? How can you make sure your Florida home loan remains affordable and fair?

A focus on builder contracts, new home purchases

Builder contracts can be loaded with hidden land mines. Buyers who purchase directly from a builder - who are not represented by an agent or lawyer - must be careful. Don’t sign on the dotted line without really knowing what you’re getting into.

Here are just a few of the many clauses to be wary in the fine print of builder contracts:

- Language that allows the home builder to “modify” your floor plan to conform to the nuances of your lot, making it “similar” to the plans you agreed upon. Look for other elusive phrases like “vary only slightly” or “dimensions may vary” and verbiage that allows the builder to make “minor changes” in the dimension of rooms, walls, windows and doors to conform to your land. Sometimes “minor changes” turn into major ones for you.

- Substitution clauses that give the builders latitude to replace certain components of your home with “similar or better quality” items, should the originals suddenly rise in price or become unavailable. Again, you’ll want language that gives you - NOT the builder - the latitude to make such calls. It’s YOUR money tied up in that Florida mortgage loan.

- Mentions of additional fees due at closing, like special assessments that oblige you to chip in for infrastructural elements in your new neighborhood like sewer and utilities and (or) amenities like jogging paths and swimming pools. Make sure that amount, if applicable in your deal, has been agreed upon in advance and is specified in the contract to avoid any surprises.

- Closing cost fees of 1 percent to 2 percent of the purchase price. Find out what expenses these fees cover.

There are many other potential considerations. For example, there are instances where builders don’t yet hold title to the property they’re marketing when the building contract is signed. You should address that concern in the fine print by inserting language such as, “If seller does not presently hold title, this contract may be rescinded by the purchaser.”

It’s probably a good idea to speak with a lawyer. In the current Florida housing market, construction is down and more people are turning to apartments - but that doesn’t mean it won’t help to have an understanding of issues mentioned above.