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The 9 Most Common Problems When Building a new Home

MISTAKE #1: Improper Lot Evaluation


Most people are familiar with customary lot evaluations, such as soil evaluations and surveys. However, more often mistakes are made when selecting a lot based on other issues such as:

  • Deed restrictions

  • Improper Drainage

  • Steep Elevations or Variable Grades

  • Local Setback Requirements


A qualified builder can help guide you through these items as well as make suggestions as to proper excavation of your lot resulting in a more aesthetically appealing home.

MISTAKE #2: Unexpected Payment Jump

As construction begins on your home, your taxes will most often be based on unimproved land resulting in a lower taxable value. After your home is completed however, your home will soon be fully assessed. When this happens, your taxable value increases, thus resulting in a higher tax bill.

If you're financing your new home and your lender has established an escrow account to pay property taxes, you may be unpleasantly surprised by a dramatic increase in your payment. More than likely your initial payment will include a dollar amount for tax escrow that will have been based upon the unimproved land. After your taxes increase due to the full assessment of the property with a completed home, your lender will be required to raise payment to ensure enough funds are available to pay future tax bills.

The problem can be more severe if a full assessed tax bill is paid out of escrow prior to an increase in your payments. This will cause an immediate shortage in your escrow account, forcing your lender to raise your payment to not only cover future tax payments, but additionally to recoup the dollar amount paid for the prior bills.

MISTAKE #3: Not Requesting Accurate Change Orders


After signing your contract with your builder, it is important to maintain an open line of communication. In the event you decide to make changes, of any sort, to your new home, it is suggested that you request a CHANGE ORDER from your builder.


Your CHANGE ORDER should provide a description of the work or material to be altered and the increase or decrease in cost associated with the change. This simple process protects both you and the builder from discrepancies throughout construction.


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