E031: To Build or Not To Build
To build or not to build - that is the question for this episode of the Selling St. Pete podcast. Today we’re going to be talking about new construction.
When it comes to buying a new home, a buyer may opt for a newly constructed home over an existing home, especially in a market that is expanding rapidly. In this episode, we’re going to take a high-level overview of new construction. We’ll be looking at factors to consider when deliberating between purchasing an existing home or new construction. We'll discuss the difference between tract, spec and custom homes, the pros and cons of new construction as well as questions to ask when deliberating a new build.
We also define what a Community Development District fee and what it entails. Below are the designated items that CDD fees
It is important to note that payments for CDD fees are tax-deductible, like your property taxes, however, they are not to be confused with HOA fees. CDD fees are paid in addition to HOA fees, if HOA fees exist in the community.
Section 190.012 of the Florida Statues limits the special powers of the CDD to a defined set of services and facilities. They are:
- water management and control
- water supply, sewerage and wastewater management
- bridges and culverts
- district roads and street lights
- public transportation including buses, trolleys, transit shelters, ridesharing facilities and services, parking infrastructure and related signage
- Investigation and remediation of environmental contamination
- conservation areas, parks and recreational facilities
- fire prevention and control
- school buildings and related structures
- security, but not the exercise of any police power
- waste collection and disposal
- mosquito control
If you are considering purchasing new construction - here are some questions to ask:
- Is the lot cost included? Are there premium costs for certain lots?
- How long will my home take to build and what happens if you don’t make the date? Does this include the time to get permits?
- When do extras have to be paid? Upfront or at closing?
- How much customization can be done? Am I able to make any modifications or upgrades once construction on the home has started?
- What warranties are provided with the home? What do the warranties include & how long do they last?
- What are the standard finishes?
- Are you allowed to purchase your own appliances or materials?
- If you can bring in your own appliances or materials, will the builder provide a credit?
- Is landscaping included? If yes, what does it entail? Is there any warranty on the materials used?
- Does the contract include an escalation clause?
- Is there an HOA? What are the dues? What do they cover? If not, are there any protective covenants for the neighborhood?
- Does the builder’s preferred lender offer any financial incentives?
- What are the anticipated property taxes? What are the anticipated HOA fees? Is there a CDD?
- Can you give me references from prior buyers?
- How quickly will punch list items be completed after the final walk through? If there is a major item that hasn’t been completed or is on backorder, it may make sense to ask the builder for an escrow holdback of funds to ensure these things will be finalized
