When searching for homes in the Washington, DC area, you
have many options for the type of home you’d like, including its’ age. Many
homebuyers find new construction homes or condos to be appealing for many
reasons; there are no projects to be done, the finishes are likely designer
selected, and the systems are all new. Just with anything in real estate, be
prepared. There are some key elements to new construction that, if planned for,
will make your home buying experience go smoothly. We want to discuss these so
that you are prepared for what to expect, both during the purchase and after
settlement.
Read the Contract
Traditionally, real estate agents use a standardized
contract that has been recommended for use by the local Realtors association.
In Washington DC and Montgomery County, MD, that would be the forms provided by
the Greater Capital Area Association of Realtors. When purchasing a new
construction single family home, you are likely to see this standardized
contract. Your real estate agent should be well-versed in this contract, but
it’s important for you to review, as well. If you have a selected a new
construction condominium, you will likely see a different contract that has
been drafted specifically for the condominium that you are purchasing. Read
through this contract thoroughly. These contracts tend to favor the developer
of the condominium and leave certain standard provisions out. Ask you agent to
ensure appropriate clauses are added to ensure your protection as a buyer.
Don’t Skip the Home Inspection
Many buyers of new construction are tempted to skip the home
inspection. There are significant downsides in opting to waive this. Unlike
buying a re-sale home where the owner has been living in the property and uses
the systems daily, new construction has never been used. If there is a leak in
a pipe, improperly connected wire, or other defect of installation, you won’t
discover this until after you move in. Permit inspections often won’t catch
these minor details and, in some cases, these items are not covered under a
warranty. Conduct your own inspection to ensure the work is quality and that
minor details are addressed before you move in.
Check the Permit History
This is a rather easy step, but crucial to ensure that you don’t get stuck with problems
down the road. While less frequent now, there was a time period where some
inexperienced developers were completing construction and selling homes prior
to getting final permit inspections. The final inspection of permits is an
important process to ensure that the quality of work was reviewed by the city
to ensure code compliance. The District of Columbia has a great online system
to verify the permit history of any property. It can take some time for the
system to be updated with inspection documents, so if the final inspection is
not recorded in the system, ask the developer to provide a copy.
Register Your Appliance Warranties
Once you’ve settled and are new homeowners, it is important to take a final few
steps to ensure a great ownership experience. While developers provide a
limited warranty on the construction, your appliance warranties are provided by
the manufacturer. You should record the model, serial numbers, and manufacturer
of each and go to the manufacturer’s website to register the respective
warranties. Major manufacturers, like Samsung and GE, have cellphone
applications that you can simply scan the barcode the appliance and register
the warranty.
Check the Developer’s Bond with DCRA
Every new construction condominium project is required to have a bond posted with the
District of Columbia to ensure the provisions of the warranty are funded. This
warranty lasts for two years and individual owners or a condominium association
may file warranty claims against this bond. The filing of the bond with the
Department of Community and Regulatory Affairs (DCRA) can often be overlooked
by developers, so it is important to ensure the bond was posted. You can check
this by contacting DCRA or having the attorney for the condominium association
confirm this separately. If you find yourself in need of filling a claim
against the bond, DCRA has put an instructional guide together that can be
found here.
Conduct the Condominium Transition Study
Once the condominium association has taken over from the
developer, it is important to conduct a transition study. A transition study is
like a home inspection for the entire building. During your purchase process,
you likely had a home inspection of your condominium, but that didn’t include
the overall building. The purpose of a transition study is to evaluate
construction and identify construction defects while warranties are still
enforceable. You’ll want to complete this as soon as possible, so that you can
submit any warranty claims to the developer before the two-year period expires.
It might seem like a lot, but following these steps will
make sure that have a great home buying experience and protect yourself from
potential new construction downfalls. Your new home is meant to make memories,
not headaches. If you have more questions or are unsure if new construction is
right for you, don’t hesitate to reach out to our team. You can email us at CatalysGroup@Compass.com.