The Real Estate Encyclopedia
I am Building Within a Subdivision. What Do I Need to Know Before Signing the Contract?
Category - Home Ownership Questions - Building Your Home FAQ's

Building in a new subdivision allows you to view homes under constructions and establish the quality of the craftmanship and knowledge of the builder, as well as to find models featuring  what you want. Most builders, especially during a slow market, are willing to build or tailor a plan for you.

A new subdivision also provides comparably valued homes around you. In addition, you will have Covenants and Restrictions, as well as a Homeowner's Association to maintain the general impression of the subdivision, thus protecting your investment, including the landscaping at the entrance of the subdivision. The covenants and their restrictions help protect and improve the value of the investment you make in your home.

A subdivision also provides the opportunity to check into the reputation quality the builder provides. Check with existing residents for their impression and satisfaction with their home.

Look for hints such as left over lots in an established subdivision, which were passed over for a reason. Keep in mind, there could be rock, an underground spring, a serious slope, an ugly view, etc. If it is in an older area without public sewer, the lot may not have passed the environmental tests for a septic system.

You need also remember that the costs of materials and labor continuously increase. Unless you are willing to build a modest new home in an older subdivision of upscale homes, you could wind up with the highest priced home in the neighborhood, because of the increased building costs. Most subdivision Covenants and Restrictions and/or Recorded Plats dictate the minimum square footage and architectural and landscaping requirements, which could force your home to meet these requirements. Your best bet is to research construction cost within the requirements of the covenants, which could drive the cost of a new constructions in that particular subdivision well beyond other homes in the neighborhood. In this case, you will have negative equity in the home and a difficult time getting your investment back, if you decide to sell.

Home Ownership Questions - Building Your Home FAQ's
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