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By far, most new homes on the market today are built by established builders as part of a development project. You may decide that a custom built home is for you instead. If this is the case, be prepared to pay more. One of the advantages of the development home is that the materials and appliances are purchased in quantity, which saves you money. This does not apply on a custom built home. In building your dream home, your natural tendency will be to buy the best. This will also add to the price tag. And whatever you do, don't change your mind after making a particular building selection. It will be expensive to change the location of a door or window once construction has begun.

SUGGESTION: See if you can leave a portion of the home's purchase price in an escrow fund pending completion of the home to your satisfaction. This way, if something isn't completed properly, you'll have much better bargaining power with the builder.

One of the most important keys to your satisfaction is selecting the right builder in the first place. It really pays to do a little homework on this, since the time you invest can save you a great deal of frustration (and money) later.

Check the builder's reputation: Call the Better Business Bureau or the local builders' association. Talk to other customers in the same or other development. Ask about their reactions to the builder's after-sales behavior.

Builder Responsiveness

The success of all new homes depends on the builder. Invest some time in checking with other homeowners on how they feel about the builder you're thinking of dealing with. Some questions you'll want to ask:

• Did you experience delays?
• Was your home delivered when promised?
• Were there many problems with the home when delivered?
• Did the builder respond quickly to your complaints?
• Were repairs completed satisfactorily?
• Have problems recurred? Have there been many new problems?
• Would you be hesitant to deal with this builder again?

Get details on the builder's business: How long has he been in business? Are operations conducted out of a post office box? How will you contact the builder at the conclusion of the project? Are local suppliers comfortable with his business ethics?

IMPORTANT NOTE: Make sure the builder has posted a performance bond with the municipality where the project is being constructed. This protects you against the builder losing financing in the middle of a project and leaving your development without needed roads, sewers, etc.

Get it in writing: Don't ever rely on the spoken word. Make sure everything is spelled out in the contract. Sales price, how it is to be paid, delivery date, warranties, and special clauses need to be agreed to. Make sure warranty information is included, since this will be your major protection if things get sour down the road. Work with your attorney to get all this done right.

SUGGESTION: If you're a first-time home buyer, your purchase of a home does not depend on the sale of your former home. This makes you a golden customer and gives you added clout too. Don't be afraid to use that preferred status to push for what you want included in the new home.

So you've done your homework, checked on the reputation of the builder and made sure everything checks out. A few years down the road, you discover cracks in your foundation. What do you do next?

Contact your builder. Inform them of the nature of the problem and why you feel they should repair the defect at no cost to you.

Many builders participate in a long-term home protection plan or warranty. The purpose of these plans is to provide homeowners with an avenue they can take other than a court battle to have their problems resolved.

Typical warranty plans provide the homeowner with ten years of protection. They are sponsored by an independent insurance company which the builder belongs to and pays a premium for. You, as the homeowner, do not buy a policy as you would an automobile policy. You are automatically covered when you purchase a home from a builder who is a member.

During the first year of a typical warranty plan, you are protected against defects in workmanship and materials, major structural deficiencies and problems with your plumbing, heating, cooling, ventilating, mechanical and electrical systems. (Your appliances are covered under separate warranties provided by the appliance manufacturer).

In the second year, materials and workmanship are no longer covered; the other items above still are, but only to the extent they render the dwelling unsafe or unlivable. During the remaining eight years, your home is insured against major structural defects.

You are reimbursed for your expenses on authorized repairs minus a nominal deductible. Some states require that no deductible be imposed.