BUYING NEW CONSTRUCTION
The process of buying a new construction home is different than that of a resale. If you’re interested in buying a new construction home or condo in Playa Vista, you’ve come to the right place! I’ve successfully represented my clients on a wide variety of new construction homes and condos throughout Playa Vista and understand this process really well.
The main developer, and master planner, of Playa Vista Phase II is Brookfield Residential. Some of the other developers to have built projects in Phase 2 of the community include Tri-Pointe Homes and KB Homes.
Step 1 – Register for the Interest List
This is very important. Registering for the interest list secures your place in line with the developer, and gives you a time-stamp. This time stamp is how the developer determines the order of priority for buyers when they release their new offerings. This process is easy and free, and doesn’t commit you to anything. It merely registers your interest and locks your place in line. I recommend getting your time stamp as early as possible, even if you think you’re not sure whether you will buy or not.
Step 2 – Get Pre-Approved
The next step is to get pre-approved with Brookfield’s preferred lender. By law, you aren’t required to use this lender for your loan, but in order to participate in any of the offerings, you must be given the green light by the preferred source.
For Buyers securing financing to complete their purchase, the preferred lender will review your information and financial qualifications, and provide his/her approval or feedback. If you use Brookfield’s preferred lender in your purchase, they usually will provide an incentive (such as a design credit or closing credit). This amount is typically around $5,000.
For Buyers paying cash, you must still receive the green light from the preferred lender. However, rather than qualifying for a loan, the lender will simply require you to show proof of funds for your cash purchase.
Once you’ve been given the green light by the preferred lender, you’ll be eligible to participate in sales offerings and can make a commitment to purchase your home or condo.
Note that you don’t need to work with an agent to buy a new construction in Playa Vista. The sales staffs within each development can handle the transaction.
However, it costs you (the buyer) ZERO to work with an agent, and it’s worthwhile in the sense that they can help you navigate the process, advise on location/value/etc, and also provide information on the various releases or status of certain lot locations. The developer does pay agents for their work, but this compensation does not impact the price you pay, so you won’t save more on the deal by eliminating representation.
To have your agent involved, it’s important that he/she accompany you on your first visit to the new construction project. The developers have a strict policy with this.
You may have a location or lot that you’d like to buy, and it’s important to let your agent know sooner than later so he/she can keep in touch with the developer on this for you.
Typically, lots are released in phases, so you may need to wait for your lot phase to be released before you can reserve it. At the same time, other buyers might be waiting for specific lot locations as well, so it’s important to stay in touch and be ready to move on it when the time comes.
If you miss out on a lot, or you’re worried about your place in line, have you Realtor find out more information on your behalf. You might miss a specific location to another buyer, but that isn’t always the end of it. Deals fall apart for a variety of reasons (financing issues, change of mind, change in situation, etc.) so it’s important to keep in touch and be ready to move in the event it becomes available again.
Reservations are made by placing a hold deposit with the sales office. This deposit is typically equal to 3% of the proposed purchase price. At this time, no other buyers will be able to reserve your lot.
This deposit check will be held uncashed by the sales office until you come in (at a near future date) to sign the contract papers. This hold doesn’t last forever, though. You must arrange a date to sign the contract, although it’s usually atleast several days after the hold is placed since the sales office needs time to prepare the paperwork for the meeting.
Signing the Paperwork
It’s now time for you to sign the contract. You will want to allow approx. 2 hours for this process. During this time, you will review and sign the paperwork, ask any questions you have about the process and timing, etc.
Once the paperwork is signed, escrow will be opened and your deposit check will be deposited.
If you’re securing a loan, you will want to get this approval process going immediately after escrow is opened. Your lender will need time to process the loan and get approval.
In a resale transaction, buyers typically have contingency periods for inspections, appraisal, loan, review of HOA disclosures, etc. With New Construction, typically the only contingency is the loan. You will likely have walk-through’s during the escrow period, during which time you can address any issues, questions, concerns etc with the construction team. The developer also provides a 1 year fits and finishes warranty after closing should you need anything during that period.
Some developers are more attentive than others when it comes to customer service, so it’s worth asking them how that process works specifically if you or your agent aren’t aware.
With new construction, delays are inevitable! It’s important to keep in touch with your Realtor, the lender, and the developer on these aspects so you’re aware of the timing and can plan accordingly.
Don’t be afraid to visit your home (when safe and permissible) throughout the construction process. It’s a great experience to watch your new home being built over time. Also, if you’re ordering furnishings for your new Playa Vista home, you will likely be planning ahead as furniture can take time to arrive. Keeping tabs on the completion dates will help in your planning.
If you’re planning to provide notice on your lease, or thinking of selling your current residence, you will want to plan accordingly based on the timing and completion of your new home. Your Realtor should be able to advise on this.
Depending on the development and how far along each home or condo is, you might be able to make upgrade selections during the construction process. This can include floor finishes, counter tops, cabinetry, backsplashes, appliances, electrical and A/V upgrades, light fixtures, etc.
Typically, a design consultant is assigned to you at the beginning of the purchase process. This consultant will guide you through the various steps and deadlines for selections, and help you understand the options, pricing, styles, etc.
The model units you’ve probably visited are generally highly upgraded, so keep that in mind when making your selections and determining your costs.
As you make selections throughout the process, you typically pay a deposit on the cost of those upgrades. This deposit is a percentage of the upgrades cost, and is usually required since the full cost won’t be settled until the actual close of escrow (when the house is fully completed).
Just prior to closing, you will have a final walk-through your residence with the construction foreman. At this time, you will review finishes, ask questions, test appliances and doors/locks, check walls and paint, etc. Any noted issues will be tape-marked and repaired.
After closing, you will receive a buyer’s information briefcase or package, which contains information on your home warranty, appliance manuals and warranties, contact numbers, etc. Keep this in a safe place as it’s your go-to reference guide for addressing questions or issues moving forward.
Many builders have restrictions on selling or leasing your new home for a specific period of time after closing. Usually it’s one year from the closing date, so be sure to research this if you’re thinking of this option.
When you’re ready to move-in, be sure to check with the HOA (if applicable) regarding moving procedures. Sometimes you need to make a reservation and/or place a deposit with the HOA in order to move in / move out. This helps ensure that elevators are available and that multiple owners aren’t set to move on the same day. The deposit (if required) is usually a way to help protect against damages caused to common areas from moving.
Please Note: The information above is based on my experience and should not be relied upon as fact. Actual builder policies, procedures etc. can vary, and should be researched prior to purchasing. Anybody reading this should ask questions and consult professionals until they feel comfortable enough moving forward with a purchase.