New Construction: One-time-close punch list

Clay Johnson:                    Hi guys, Clay Johnson here with Castle and Cooke Mortgage and of course with Cheryl Knowlton, Dynamite Productions. We wanted to come at you guys one more time on this segment of One-Time Close, and a couple of things that we want to talk about are kind of tidying up the loose ends. Cheryl, you’ve actually been through this process-

Cheryl Knowlton:             A couple of times.

Clay Johnson:                    So tell us kind of what else these guys need to be aware of for this One-Time Close as they start this process, and of course, as they’re nearing the end as well.

Have a punch list

Cheryl Knowlton:             Absolutely. So two things I definitely want to make sure I make you aware of. Number one is that punch list. As you’re coming down that home stretch so excited, you’re going to do your final walkthrough with your agent, hopefully, that’s representing you on the buy side, as well as the builder’s representative. And you’re going to be looking for all the little things and they’re going to give you a roll of blue tape and you’re going to stick it everywhere where they need to touch up.

Maybe some paint got scraped off the wall when they were doing something or maybe it’s missing some little decorative item. Nothing significant or the inspector will not pass it off for your Certificate of Occupancy, but just little things that are important to you as the homeowner. Work with your agent in terms of how to manage those expectations of whether or not that punch list needs to be completed prior to closing because that can be a negotiation issue and that can be a little sticky and interesting.

The second thing is the expectation of being able to do your own home inspections, recognizing that more and more it’s becoming more common for buyers to want to do their own home inspection, even on new construction. Shockingly, the number one source for methamphetamine being found in properties is in new construction. Which is shocking to most people, but you think about the timelines that those subs are under and they put so much stress and pressure on them, and yes, they’re paying them well but they just expect them to just hamster wheel it and get it all done that they found their solution and they’re making meth in the brand new house.

Find out what inspections are allowed

Cheryl Knowlton:             So that is a big problem. You need to talk to your agent and to the representative that represents the builder on what inspections you are allowed to do as the buyer. Some contracts are really specific and builders won’t let you do a home inspection on the roof or other major skeletal items of the home, which causes a lot of buyers a lot of consternation. So just make sure that A, if you are building, that you have a buyer representative walking you through that process who understands the new construction process, that does not represent the builder. That represents you.

Cheryl Knowlton:             Second, great communication is absolutely essential with your agent, with the builder, and of course with your amazing lender. And a One-Time Close construction product, you guys, is the absolute way to go if you are building a new home, and it’s so great that there are so many options out there for folks.

Clay Johnson:                    It is. Yeah. we’ve been super excited about it because there’s just been a handful of folks who’ve been able to do this in the lending industry, so to be able to come on board and to make this product available and offer it directly to people who want to build their own home, it’s been a home run for us.

We’re very excited because we’ve been so surprised how many people just want to do this and this is their way to make that dream come true.

Cheryl Knowlton:             Absolutely. So we hope you’ve enjoyed our series on One Time Close construction lending and the excitement that is building a brand new house.