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Thinking about buying a new build in Colorado? The truth about builder incentives, hidden costs, and risks could save you thousands before you sign anything.
If you’re moving to Colorado in 2026 or relocating within the state, new construction homes can look like the perfect option. Brand new everything, modern layouts, and attractive builder incentives. But what most buyers don’t realize is that these deals often come with trade-offs that can impact your finances long after closing.
In this video, we break down the real pros and cons of new construction homes in Colorado, based on real client experiences and what we’re seeing right now in the Denver housing market.
We cover:
How builder incentives (rate buydowns, closing costs, lender perks) actually work and what they might be costing you behind the scenes
Why using the builder’s lender isn’t always the best deal
The truth about Colorado property taxes on new builds, including metro district taxes that can double your tax bill
What most buyers miss about rate locks and timing delays with new construction
Why home inspections are critical, even on brand new homes (and when to do them)
The risks with builder contracts and how they heavily favor the builder
Real-world scenarios where buyers lost money or equity due to market timing and incentives
We also talk about how new builds compare to resale homes when it comes to appreciation, competition, and long-term value, especially if you plan to sell in the next few years.
This isn’t to scare you away from buying a new build. For many people relocating to Denver or other Colorado suburbs, they can still be a great option. But going in with the right strategy and expectations can make a huge difference.
If you’re buying in Colorado or planning a move soon, this is the kind of insight most people don’t get until it’s too late.
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Are you here to hear some serious horror
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stories about what can go wrong when
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buying a new build? Cuz you're in the
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right place.
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We've got tons of those stories. But
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don't worry, we're actually here to give
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you a guide on how to go through the new
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build process, make sure you're
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protected, and get the best experience
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possible.
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Absolutely. We are Jake and Megan Fidel,
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full-time real estate agents, part-time
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tour guides to all things Denver living.
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And today, we want to talk to you about
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Denver new builds. And that list
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includes how to negotiate the best deal
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with a builder, how to understand the
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lending finance, the the lender offers
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and financing that they're offering, tax
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structure, when you should make sure and
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do your inspections, and so much more.
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So stick around with us. We got plenty
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of good stuff for you today.
0:47
So the best things are about a new build
0:49
are obviously brand new home. No one's
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lived in it before. you don't have to
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deal with any of the nonsense that left
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you. You get a brand new roof, you get a
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brand new HVAC system, all kinds of good
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things. Uh, and also you can time things
1:03
out so that you're under contract on the
1:05
home way in advance. You can list your
1:07
home and then move yourself into the new
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build when it's ready. But what we need
1:12
to do is talk about the risks here
1:13
because you see this brand new house and
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you think there are no risks. It's brand
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new. There are tons of risks. It's just
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that they're different. So today, we're
1:22
not talking about the granite choices
1:24
and the right pain choices. We're
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talking about how to mitigate those
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risks, how to avoid things, and how to
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set yourself up for the best situation.
1:33
Money. It's probably already on the
1:34
forefront of your mind if you're buying
1:36
a home, regardless of what type it is.
1:38
But here's the thing about new builds.
1:40
They're specifically marketed and
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designed to feel like you are getting
1:44
the most slamming deal around. They
1:46
offer closing cost incentives, rate
1:48
buyowns. But here's the thing. No money
1:52
is free. There's no free lunch. These
1:54
are always going to come with a cost.
1:56
The first of this is they're usually
1:58
tied to using their lender. It's usually
Builder Incentives Explained: The Truth About Buying New Build Colorado
2:01
a lender incentive. And their lender
2:04
might not always be offering the best
2:06
rates, the best closing cost, or
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definitely the best customer service in
2:11
my opinion. So, what's the real cost of
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saving 1% on your loan if you have to
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have a higher interest rate to begin
2:19
with? And also, a lot of these costs are
2:22
advertised of what you could save based
2:24
on the life of your loan. But let's be
2:25
honest, most people are in and out of
2:28
their house in significantly less time
2:31
than it really takes for any of that to
2:32
break even and make a huge financial
2:34
gain. Not to mention, regardless of
2:37
whatever home you're buying, if the rate
2:39
does come down over the life of your
2:41
loan, you always have the option to
2:42
refinance. And with the lenders that we
2:45
recommend, they'll typically do that
2:46
refinance if you've recently bought with
2:48
them at no charge. So, it's not much of
2:51
a risk. Did I scare you yet? Good. No,
2:54
I'm just kidding. There's a way to do
2:56
this, right? Don't be freaked out. All
2:58
I'm saying is that when you are taking
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that 15 grand of incentives, you just
3:01
want to be mindful of the long term.
3:03
remember when it's time to sell that
3:05
that was 15 grand of maybe theoretically
3:07
equity that you took a little bit in
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advance. There's nothing wrong with it.
3:11
In fact, a lot of times it's a hack to
3:13
home ownership and sometimes I really
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encourage it with people, but you just
3:17
have to be knowledgeable about what
3:18
you're doing at the time you're doing it
3:20
to make sure it makes sense for you in
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the end. And as far as that 21 buyown
3:24
goes, do you think I'm bucking at a 3
3:26
and 12% interest rate? I'm not. It's
3:29
great. In fact, sometimes it's the tool
3:31
that I recommend for people to get into
3:33
housing. It's a great hack, but you just
3:36
have to know that's going to go up. And
3:38
when it goes up, it might go back to a
3:40
slightly elevated lender rate. You can
3:43
always refinance, though, given the
3:45
market conditions. You have to know that
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maybe that rate doesn't actually ever go
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lower than where you originally financed
3:51
at, but most likely over time it may.
3:54
And you can refinance with another
3:57
lender. and talk about a bait and switch
3:59
because I've got a great story about
4:02
builder incentives gone wrong. I had a
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buyer who was a cash buyer and a lot of
4:07
these incentives are tied to a lender.
4:09
So, we discussed, well, we don't need a
New Build Horror Stories: Contracts, Negotiation & Why You Need an Agent
4:11
loan. Can we still have all of these
4:13
incentives you're offering? No problem.
4:15
They said it was a dollar amount. And at
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the end of the time, we had plans for
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where these incentives were going to go.
4:22
All of a sudden, it became, well, you
4:24
guys don't need the full amount because
4:26
you don't have that many closing costs.
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So, we'll cover all the closing costs
4:29
that you have, but everything else you
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were going to do with these incentives,
4:32
you can't do because they're not tied to
4:34
a loan. But she had intentions to use
4:37
those concessions for other things and
4:40
they were taken away from her. Now, when
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we initially went through the contract,
4:44
I pointed out the intense strength that
4:46
these builder contracts have. they have
4:49
the upper hand in a lot of ways. And I
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explained to her that, hey, they are
4:52
saying we're going to be able to use
4:53
these concessions, but I bet it's not
4:56
going to go maybe as perfectly as we
4:58
have planned. And sure enough, they took
5:00
a couple thousand off the table that
5:02
they had originally said my buyer was
5:04
going to get. We fought tooth and nail
5:07
and we got a little of it back, but
5:09
ultimately we left the situation feeling
5:11
a little peeved. Now, this builder, who
5:13
shall not be named, that's for a time
5:15
over Martini sometime. They said that
5:17
they have the unilateral contractual
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right to terminate the contract at any
5:21
time. And if we were to pursue much
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further on these concessions, they would
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terminate the contract us right then and
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right there. Do they have the right to
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do this? Oh, yeah. It's in their
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contract that they write for them.
5:34
Megan. Megan. Whoa. Easy there. Okay.
5:37
Don't get us black balled from the
5:39
builder like she almost did. Uh but the
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important thing to mention here is that
5:43
my sister and I, we are fiercely
5:45
fighting for our clients every step of
5:47
the way through this. So if you think
5:49
you can step through a new build without
5:51
a real estate agent, I mean, more power
5:54
to you. But it is always nice to have
5:56
someone who has experience and attorneys
5:59
in our pockets ready fighting for you
6:01
and negotiating for you every step of
Financing Pitfalls: Rate Locks, Lenders & Colorado Real Estate Tips
6:03
the way. And if you're hoping you're
6:05
going to get a better deal and a lower
6:07
price because you didn't use a real
6:08
estate agent, think again. These folks
6:10
just don't do that. It's just extra
6:12
profit for them for you to have more
6:15
exposure and less negotiating power.
6:18
Okay. And now a little bit more on the
6:19
loan. Uh so when you apply for a loan
6:21
and you get accepted for that, you get
6:23
something called a rate lock where the
6:25
lender locks in your rate for a specific
6:27
period of time. Uh so let's say you rock
6:30
in at 5.99% and you get 6 weeks to close
6:33
on that. The problem with a new build is
6:36
you might not be 6 weeks away from
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closing. So, if you're locked in at a
6:40
rate, the rate could go up between the
6:43
lock and the time of closing. And if the
6:46
rate goes down, they may not give you
6:48
the opportunity to float your rate down.
6:51
Most mortgage brokers who are not tied
6:53
to a builder will give you at least one
6:55
free rate flow down, which means if
6:57
rates improve while you're waiting to
6:59
close on your home, they'll give you
7:00
that better rate. Again, we're not
7:02
saying don't buy a new build. We just
7:05
want you to walk into the situation with
7:06
open eyes and explore all of your
7:09
options before you sign on that dotted
7:11
line one. Next, let's talk about taxes.
7:14
So, new builts, because you're buying
7:16
into a brand new community that doesn't
7:18
have sewer lines and power lines and all
7:20
the infrastructure a neighborhood needs,
7:23
you're paying for those things both with
7:25
the purchase price and with your taxes.
7:28
Most of these new builds have a
7:30
metropolitan district tax which is an
7:32
additional light on them on your
7:33
property tax at the end of the year. And
7:35
whereas in the major places of Denver
7:38
where where homes are already built,
7:40
your taxes are going to be somewhere on
7:42
the 0.5 to 0.55
7:45
uh you know amount of taxes. So a
7:48
million dollar home taxes are probably
7:50
somewhere in the neighborhood of six
7:51
grand a year. But if you buy into these
7:53
new builds, the taxes are going to be
7:56
double. So, a lot of times you're seeing
7:59
1.2% taxes. So, a million-doll home, you
8:02
might be paying $12,000 a year in taxes.
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And if they don't explain that to you,
8:08
the you could be running yourself into a
8:11
pretty bad financial situation. Like,
8:12
oh, you're saving all this money with
8:14
this rate buy down we're giving you, but
8:16
you're paying it back to the government
8:18
in the form of taxes. So, you need to be
Colorado Property Taxes New Builds: Hidden Costs You Must Know
8:21
wideeyed to this fact and make sure
8:23
you're asking lots of questions, and
8:25
we're happy to do that for you. Take
8:27
these two different super comparable
8:30
homes that you could be looking at in
8:31
the same day even. One is up in Commerce
8:34
City and it's a new build with a sale
8:36
price of $655,000,
8:39
but the taxes on it are $10,18
8:42
a year. If you compare that to another
8:45
home that's just a little bit further
8:46
south that closed right around the same
8:47
price, just under $650K,
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its taxes are only $2,620
8:53
a year. So, we're talking a $625 a month
8:56
difference. You've got to be aware of
8:58
that.
8:58
You would think this would be open
9:00
disclosure and uh it's not always. So,
9:03
when they initially assess the taxes the
9:05
home, they assess it based on the value
9:07
of the land. And then one year into your
9:09
ownership, they reassess the taxes based
9:12
on the value of the home and the land.
9:14
So, what looks like a really reasonable
9:16
tax payment for the first year turns
9:18
into a staggeringly high payment the
9:20
next year. Now, we had a situation. And
9:22
we walked our clients through this and
9:24
told them like, "Hey, be ready." But
9:27
here's the situation is there's so much
9:30
happening in the state of a real real
9:31
estate transaction and there's so many
9:33
things to remember that the lender never
9:35
reviewed this and reminded them this is
9:37
your monthly payment for now. It's going
9:39
to go up when you get taxes.
9:41
Unfortunately, these folks were
9:42
surprised by a $300 per month hike after
9:45
owning the home for a year. Appreciation
9:48
is probably your number one or number
9:50
two reason that you're buying a home.
9:52
And not to say that a new build cannot
9:54
appreciate beautifully, but it's up
9:56
against a few struggles in the short
9:58
term. First of all, say you want to sell
10:00
your home about 5 years after you buy
10:02
it, but the builder that you bought from
10:04
or maybe a competing builder is
10:06
developing the neighborhood directly
Denver Housing Market 2026: Appreciation Risks & New Construction Pitfalls
10:08
next door to you still. That's what
10:10
happens. These builds take multiple
10:12
phases and they take many years. Well,
10:14
now you are up against a neighboring
10:16
competition that is a brand new build
10:18
and it has those same lender incentives
10:21
or closing cost incentives that you were
10:23
caught with when you first bought your
10:25
home. Tell me why a buyer is going to
10:27
pick your 5-year-old home over the new
10:30
build directly next door with all these
10:32
beautiful lender incentives. Well, if
10:34
you bought it for low enough 5 years
10:36
ago, then you're great. You can compete
10:39
with them by being a lower price. But a
10:41
lot of times that is just not enough to
10:44
win out and you just have some
10:45
appreciation struggles. These incentives
10:48
offered on these new builds are not just
10:50
flashy incentives. They're sometimes the
10:52
key to home ownership. So you might
10:54
really need that to get into a home. But
10:56
here's the secret. Incentives and buyers
10:59
uh rate buyowns, closing cost, coverage
11:02
by the seller. None of this is new. The
11:04
builder didn't invent this. We've been
11:05
doing this for years. A lot of time
11:08
that's a technique that I use with my
11:10
sellers to get a leg up on the
11:11
competition. We'll write upfront offer
11:13
to buy down the rate. It's in just
11:15
instead of um you know we just kind of
11:17
bake it into the purchase price. So it's
11:19
something you don't have to go to a new
11:21
build for even though they make you feel
11:22
like it's the only thing they're the
11:24
only people who've ever offered it. One
11:25
thing we work extensively with our
11:27
clients with is working on having a home
11:29
that's frequently recessionp proof. And
11:32
new builds tend to struggle with this.
11:34
That's because when a recession hits or
11:36
when the market just takes a little bit
11:37
of a downturn, which is more likely what
11:39
you'll see, these homes tend to be kind
11:42
of get hit the fastest, the hardest, and
11:45
for the longest. So, when you're a
11:47
little bit closer into the central
11:49
suburbs, those tend to decrease in value
11:52
a little slower, and regain a little
11:54
quicker. You just have to be a little
11:56
bit more mindful about playing the long
11:58
game in times where something like this
12:01
could happen, which may not ever even
12:03
happen and it might not be a problem.
12:04
Okay, so you're walking into that new
12:06
build office, you see that friendly
12:08
sales representative and you're asking
12:10
them about the neighborhood and they
12:12
tell you you're lucky. You're getting in
12:14
early cuz all the prices are going to go
12:16
up after this one. So, if you buy one of
Pros and Cons of New Construction: Denver New Build Homes Reality Check
12:19
these houses, you're going to get a ton
12:21
of equity automatically just with the
12:23
building of the neighborhood. Okay, this
12:26
is true in the short term. That is true
12:28
because all the prices will go up as the
12:30
development continues unless the market
12:32
turns and that could happen in the
12:34
middle of your purchase or it could
12:36
happen and after the purchase because
12:38
the thing is when people are buying
12:40
homes, they're not buying them and
12:42
they're not looking at one neighborhood
12:43
in a vacuum. They're looking at
12:45
neighborhood values all around. And so
12:48
if the market turns, all that
12:50
appreciation you got could disappear
12:52
overnight.
12:53
Jake, I feel like this could be a good
12:54
spot for something nice about New
12:56
Builds.
12:57
Yeah, we're being pretty harsh. We're
12:58
kind of working the body pretty good
13:00
here. So, uh, here's something cool
13:02
about New Builds is New Builds in the
13:05
last couple of years has returned
13:06
Colorado to a place or the Denver metro
13:08
area to a place where you can find a
13:10
pretty great home for half a million
13:12
dollars. and that opportunity just
13:14
doesn't exist within the confines of the
13:17
city so much. So sometimes they provide
13:19
a really awesome muchneeded service and
13:22
you can get a brand new home just a
13:24
little further out of the city. So I got
13:26
to give new builds that we're definitely
13:28
grateful for more inventory.
13:30
All right, that's enough loveydovey.
13:32
Bash him again, Jake.
13:33
Let's get back to it. Okay, so real life
13:36
scenario. Um we had a pretty rough
13:38
situation, kind of a heartbreaking
13:40
situation with some of my clients. they
13:42
had to sell a home and move into a new
13:44
build. Long story, we had indepth
13:47
conversations about the potential risks
13:49
and it was still felt like the right
13:52
move for them at the time. So, they
13:54
moved into their new builds toward the
13:55
end of the development and also towards
13:58
the end of 2024 when prices were kind of
14:01
about to start dropping in 2025. They
14:04
took all of the lender incentives we
Buying New Build Colorado: Real Loss Scenarios & Appraisal Risks
14:07
incentives that we talked about before
14:09
that you're kind of taking your equity
14:10
in advance and increased the purchase
14:13
price as much as they could. Uh and so
14:16
then less than a year later, another bad
14:20
thing happened. We had this cascade of
14:22
scenarios and they had to sell the home.
14:24
Less than a year later, we sold it for
14:27
$80,000
14:28
less than they purchased for. And that
14:31
was absolutely heartbreaking.
14:33
considerations that could have made this
14:34
situation less bad. Okay? Cuz we're here
14:37
to tell you about how to do a new build,
14:39
right? Uh consideration number one, not
14:42
taking all of the builder incentives to
14:44
their maximum and essentially taking all
14:46
of that equity upfront. Number two, like
14:50
I said, these folks had some
14:52
extenduating circumstances, but planning
14:54
to own your home for the long term, so
14:56
you're not counting on short-term sharp
14:59
appreciation, cuz it just doesn't always
15:02
happen that way. And then number three
15:04
is actually nothing we could have done
15:06
here, but a bone I kind of have to pick
15:08
with the whole process of new builds
15:10
that you should be aware of, and that is
15:13
the appraisal process. An appraisal is
15:15
done to protect you, the buyer, and the
15:19
lender who's loaning the money on this
15:20
home. Uh, and so they do this, an
15:23
appraiser goes in and verifies the value
15:25
that you're going to pay for the house
15:26
and says, "Yes, we agree with the value
15:28
that you're going to pay here." Um, and
15:30
the problem sometimes with new builds is
15:32
that appraisers just kind of get on this
15:33
roll and it's a new build and it's
15:36
supposedly supported by all the sales
15:38
around it and that's just not always
15:40
happening. So, we have to be really
15:42
careful about just trusting the
15:44
appraisal on a new build specifically.
15:47
When you're buying a new development,
15:48
it's just that, a new development.
15:50
Everything around it is still being
15:52
built out. And so, there's usually like
15:54
some pretty good guesses about what is
15:56
going to be built around you. Say, you
15:58
know, that there's going to be a Costco
15:59
there. Everybody's talking about it, but
16:01
maybe hasn't been publicly announced.
16:03
Sometimes that plan might fall through
16:05
and or it was never true and a Costco
16:07
doesn't go in there. But it's not just
16:09
about the Costco. Sometimes you can walk
16:12
into a new build development and the
16:14
builder might pitch you on the school.
16:16
They might even show you the site on the
16:17
map and have it marked as middle school.
Inspections for Colorado New Construction Homes: What Most Buyers Miss
16:19
This happened actually recently in
16:21
Crystal Valley Ranch down in Castle
16:22
Rock. There was a site dedicated to be a
16:25
school, but what happened next is not
16:27
exactly what everybody thought. DCDS
16:30
came in and said that site is actually
16:32
not going to be a school. We don't think
16:34
it's a desirable lot or we don't need it
16:37
and it's not going to be that. it's
16:39
actually most likely to go back to the
16:41
builder and become more homes. So,
16:43
people who are banking on having this
16:45
middle school walking distance don't
16:47
have that now. Instead, they just have
16:49
more neighbors. This can be true for
16:51
retail development and even schools.
16:54
Your individual lot is also in the
16:56
middle of being developed. You're still
16:58
waiting on landscaping to mature. So,
17:01
the whole street is probably not really
17:03
going to have any kind of mature trees.
17:05
They're all in their beginning stages
17:07
and builders are not really developing a
17:10
lot of beautiful, meticulous
17:12
landscaping. It's usually some grass and
17:15
a little sapling that still needs to be
17:17
grown in order to protect you from the
17:18
rest of your neighbors. So, this can
17:20
really add to the community feel of
17:23
maybe lacking some charm, which you're
17:25
also going to lack that historic charm,
17:27
which if you're looking at new builds,
17:28
that probably just doesn't bother you.
17:30
But these are all just things you need
17:31
to consider. And I can tell you my
17:33
biggest con when I'm out showing new
17:35
builds is that I get really, really
17:37
friendly with my tire guys. You are in
17:40
an active construction zone for a while.
17:43
So, think tires getting blown out by
17:46
nails and debris everywhere. Get your
17:49
HVAC clean cuz it gets dusty. Okay, it's
17:52
a brand new home. Why would you need an
17:55
inspection, you ask? Well, it's super
17:58
important. So, uh, I had a client once
18:00
who insisted I don't need an inspection.
18:03
It's brand new. They're going to do the
18:04
county person is going to go through and
18:06
inspect it. It's fine. I said, "Hey, you
18:08
know, this is a client that I really
18:10
cared about, known her for a long time."
18:12
And I said, "I understand that. I'm
18:14
going to pay for your inspection because
18:15
this is really important." So, we did
18:18
the inspection and we found plenty of
18:20
problems. We found some structural
18:22
issues in the subfloor and some HVAC
18:25
things. So, let me tell you, inspections
18:28
are absolutely necessary, especially
18:30
with new builds. And we're going to talk
18:33
about when you actually probably want to
18:35
do three different inspections with a
18:37
new build. First, you want to do a pre-D
18:40
drywall inspection. This is before the
18:42
drywall goes up because drywall hides a
18:45
lot of problems. And once the drywall is
18:46
up, there's only so much your inspector
18:48
can actually check out. Next, you want
18:51
to do the final inspection before
18:53
closing. And this is just the the
18:55
inspector is going to go through and put
18:57
tape on everything that's wrong. They're
18:58
going to make sure all the touch-ups are
19:00
there. The inspector is going to spend
19:02
like 4 hours at your house making sure
19:04
it's all good. Whereas your final
19:06
walkthrough is probably only 15 to 30
19:08
minutes. And finally, you want to do
19:12
your pre one-year warranty home
19:15
inspection. So, you've bought the home
19:17
and then 1 year in, your warranty is
19:20
going to expire for workmanship and
19:22
things like that. You want to do one
19:24
more inspection with your inspector,
19:26
probably at like the 9 to 10 month mark
19:28
to make sure anything is there you have
19:31
documented and you can get them to
19:32
repair with the warranty. And with your
Builder Contracts, Warranties & Final Tips: Colorado Home Buying Guide
19:35
inspections, one way to tell the quality
19:37
of a new builder in terms of service and
19:40
quality of the build itself is what kind
19:43
of barriers do they put between you and
19:45
a home inspection? A lot of companies
19:48
throw up walls like crazy because they
19:51
just do not want to work with your
19:53
inspector. I won't name any names here
19:55
again, but we are later on going to rank
19:58
the top 10 builders. And you'll notice
20:01
some at the bottom maybe are a little
20:03
more difficult to work with your
20:05
inspector. But that's a question up
20:06
front that I always like to ask is how
20:08
hard is it for me to get a home
20:10
inspection on this house? When you do
20:12
decide that these cons are just not
20:14
enough to keep you away because the new
20:16
build is gorgeous and the community is
20:18
great and there's so much to love.
20:20
That's fantastic. Keep your real estate
20:22
agent involved in every step of the
20:26
transaction. Every email, every
20:28
communication you get, forward it to
20:30
your agent. Do not assume that the
20:32
builder is communicating anything to
20:34
your agent. Jake and I have a story. We
20:37
had a buyer who was under contract with
20:39
a new build. The appraisal came in low.
20:42
They delivered those results to our
20:43
buyers and not us. For three full days,
20:47
our buyers stressed. What are we going
20:50
to do? The appraisal's low. If we want
20:52
to close, we're going to have to come up
20:54
with the cash to close. Jake and I knew
20:57
for sure there was no reason for them to
21:00
come in with that cash. We could
21:01
negotiate the builders to just lower
21:03
their price. The market conditions all
21:06
indicated this was a very doable thing.
21:08
But after 3 days of sweating this,
21:11
freaking out that they might lose the
21:12
home, they didn't want to deal with it.
21:15
They decided to meet them halfway and
21:17
cover half of that appraisal gap when
21:20
they never should have had to.
21:22
Ultimately, that was their decision
21:23
because they just didn't want to risk
21:25
it. They didn't want to go through the
21:26
stress. But I guarantee if we had been
21:29
in the know of this three days earlier,
21:31
we could have walked with them, reduced
21:34
any of that stress and the entire
21:36
appraisal gap would have very likely
21:38
come down all at the cost of the
21:40
builder.
21:41
Talk about those warranties cuz these
21:42
are actually a pretty cool thing that
21:44
you get from a new build that you don't
21:46
get from a resale home. But there are
21:48
some limitations. Typically, you get a
21:50
one-year worksmanship warranty, two
21:53
years on systems like HVAC, and 10 years
21:56
on your structural foundation. Uh
21:58
there's definitely limitations, though.
22:00
They're not going to cover things like
22:02
cracked concrete. So, there's two kinds
22:04
of concrete. There's new concrete and
22:06
there's cracked concrete. So, just
22:08
expect that some of the concrete you're
22:10
going to have will crack, especially in
22:11
Colorado with expansive soils. Um the
22:15
foundational warranty is typically
22:16
related to fairly devastating issues. So
22:19
if you have a small crack in your
22:21
foundation, they're not going to come
22:22
fill it for you. Uh so what we try to do
22:26
is coach our folks to mitigate this
22:28
problem long term. So the issue with new
22:30
builds is back in the 70s when they
22:33
built homes, they would dig out the
22:35
foundation of the home. They would pour
22:37
the concrete perimeter foundation and
22:40
concrete takes 52 days to fully cure or
22:43
harden. Okay, that's back when
22:46
everything wasn't in a rush. And they
22:47
would let the concrete cure for 52 days.
22:50
So, you had a fully stable foundation
22:52
wall. Then they pack the dirt back in.
22:55
They compact the dirt and that dirt then
22:58
pushes water away from the foundation
23:00
when it rains or snows. With a new
23:02
build, there's no time for that. So they
23:05
don't allow the foundation wall to fully
23:07
cure. So they gingerely toss the dirt
23:11
back on top and they don't pack it down.
23:14
They try to give it a little bit of a
23:15
tilt away from the house so the water's
23:17
running away. But over time that soil is
23:19
going to compact and eventually be flat
23:22
or even negative toward the house. So
23:25
something you have to watch for your
23:26
first 10 years or so is to take care of
23:28
your landscaping. And you might be
23:30
adding more dirt to keep that foundation
23:32
safe. But let's be real, how many homes
23:35
are you going to buy where you get
23:36
something as nice as a warranty for
23:38
everything on a resale? If something
23:41
goes out 6 months after you purchase,
23:42
and chances are it very well might,
23:45
that's the luck of the draw. There's no
23:47
recourse. That's just your problem. Now,
23:49
so that's a great benefit of a new build
23:51
is a lot of these systems are going to
23:53
be protected under your warranty or a
23:54
lot of them are brand new. So even on a
23:57
resale where you might buy a home
23:59
warranty that will cover some of these
24:00
things, that's only for one year. And I
24:03
promise you, when you buy the home
24:04
warranty protection program for one
24:06
year, your furnace goes out at 1 year
24:09
and one day. And in a new build
24:11
community, everybody is buying right
24:14
about the same time. So you're not the
24:16
new kid on the block, you're all the new
24:18
kids on the block together. And you're
24:20
probably buying into a specific
24:22
community foe at the same time because
24:25
you're likely in similar walks of life,
24:27
have similar interests, work in similar
24:29
places, or have similar priorities. So,
24:32
a lot of times this can be seen as a
24:34
builtin instant community that you might
24:36
not find anywhere else.
24:38
What was that like 20 seconds of
24:39
positive? Megan, not that off. Back to
24:41
the tough stuff. Okay, but we do really
24:44
need to talk about the builder contract.
24:46
This is a different contract than the
24:48
boilerplate real estate commission
24:50
approved contract we use to buy resales.
24:53
The builder contract is written
24:55
basically explicitly to protect the
24:58
builder from you. Like Megan mentioned
25:01
earlier, they have the right to
25:03
unilaterally cancel the contract if you
25:05
upset them. Uh, in general, we review
25:10
all these contracts with our folks, but
25:12
our line is, hey, you're signing away
25:14
all your rights when you sign this. Just
25:16
so you know, there's probably not a lot
25:18
of wiggle room for getting your earnest
25:20
money back if things come down to it.
25:22
They're not obligated to fix any of the
25:24
inspection requests we make on
25:25
inspection. So, this could be a scary
25:29
contract. Hopefully not, probably not.
25:32
We're there there to help you mitigate.
25:33
And a lot of times, even if they are
25:36
contractually able to do something, we
25:38
can sweet talk some folks into taking
25:41
care of our clients. The builder can
25:42
also do things like legally change the
25:45
lot you've chosen for your house without
25:47
your permission. Now, they don't usually
25:49
do this in practice because they do have
25:50
a reputation to uphold and that would be
25:53
a pretty bad one, but contractually they
25:55
can do it. Uh they can also a lot of
25:58
times, you know, they tell you, okay,
25:59
this is going to be a May finish date.
26:01
That's commonly not true and it's
26:03
probably June or even July on a regular
26:06
basis, but they legally have rights to
26:08
extend their close up to 2 years without
26:11
letting you out of the contract. And so
26:13
your earnest money is locked up while
26:15
the rest of the market is maybe
26:17
appreciating and maybe the rates are
26:19
getting different. So you have to be
26:21
careful. There's so many things we could
26:22
go over about this contract and we're
26:24
always happy to once you get there.
26:27
Okay, Megan, rapid fire Q&A. Most
26:29
frequently asked questions about new
26:31
builds. You ready?
26:32
I'm ready.
26:33
Should I hire my own agent to buy a new
26:36
build?
26:37
Listen, I think this answer is really
26:38
well this question is really well
26:39
answered in the video. Um, I don't know
26:42
why you wouldn't. You're not going to
26:43
get some kind of discount for not
26:45
working with an agent. You're just going
26:46
to be unrepresented. Um, left without a
26:48
teammate and a partner in the whole
26:49
thing. So, I'm not sure why you
26:50
wouldn't. If you decide you want to,
26:52
make sure you bring that agent on your
26:54
very first visit. A lot of places, if
26:57
you do not bring an agent the very first
26:58
time, will tell you that you are not
27:00
really able to have that representation.
27:02
So,
27:03
okay, Megan, what is the typical deposit
27:05
for a new build? changes a little bit
27:07
from builder to builder, house to house,
27:09
but you're looking at generally about 1
27:11
to 5% plus the cost of the upgrades,
27:13
which typically is quite a bit elevated
27:16
from what we see in the resale market
27:18
and a lot harder to get back. Colorado
27:21
is a very, very buyer friendly market.
27:24
Um, we have a lot of laws to protect
27:26
buyers and get them their earnest money
27:28
back in the resale world. There are
27:30
about a hundred reasons under the sun
27:32
you can get your earnest money back
27:33
without question. Not so true in the new
27:35
build world.
27:36
Jake, what questions should you be
27:38
prepared to ask the sales representative
27:40
at a new bill?
27:41
Oh my gosh, so many questions. So, uh,
27:44
when when can I do an inspection? How
27:46
many inspections can I do? How hard do
27:48
you make it for my inspector to get
27:49
access to your home? Uh, how long does
27:52
my lender rate lock? You know, when does
27:55
that expire? Um, what are the long-term
27:57
plans for the community? How much of the
27:59
association dues? What's the mill revuly
28:01
late of your tax rate? Uh, you know, I
28:02
could go on, but we did say this was
28:04
rapid fire. Hey, that's why we bring
28:06
you.
28:07
All right, everybody. That's a wrap on
28:08
what we've been calling the dark side of
28:10
new builds. Thanks so much for joining
28:12
us. Like we said, there's a great way to
28:14
get what you want out of a new build. It
28:16
can be an awesome situation. We guide
28:18
through people through this process all
28:20
the time and we'd be so happy to help
28:22
you. So whether you're moving in 9 days
28:23
or 900 days, give us a little email,
28:27
give us a text message, and we'd love to
28:29
do a private consultation and help you
28:31
figure out what's your next what your
28:33
next move. All of our information is in
28:35
the description below and we make tons
28:37
of videos like this. So if you like this
28:38
video, subscribe so you can be the very
28:40
first to get it all.
28:41
Thanks so much. See you next time.
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