Negotiate a Good Contract

Builders use lengthy contracts written expressly for them to protect themselves. In the boom years, the terms were set in stone, but not now. Review the contract with your agent or a real estate lawyer, who, for a few hundred dollars, can propose changes that will protect you. Issues to address include:

Length of ownership. Wary of speculators, builders may require you to live in the home and not rent it out for some period of time. You don't want to be stuck if, despite your best intentions, your circumstances change. Negotiate this provision out of the contract.

The sale of your previous home. Builders may be reluctant to tie up a property with a home-sale contingency. Pulte Homes won't accept one for a quick move-in, but it will if the new home is scheduled to close six or seven months hence.

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Financing. If you must accept builder financing to get the goodies -- and you really want them -- you may want to add a clause that says, in effect, "Within 60 days of closing, I can seek my own lender if your lender isn't competitive." You can also use a financing contingency to avoid having to ante up cash -- or else face the loss of your deposit or a lawsuit -- if your financing falls through at the last minute.

Regular inspections. Pay your own home inspector to take a look at each critical juncture in construction, when you'll also typically have a "walk-through" with the builder.

Satisfactory completion of the home. How will the builder handle the final to-do list after the municipality has issued its certificate of occupancy and you're otherwise ready to close and move in? Most builders will offer a homeowners warranty. (You're best off if it's backed by an independent source, in case the builder fails and can't support its own warranty.) But even if the warranty covers the cost, waiting for the work to get done can be a pain. Avoid that situation by asking the builder to agree to close within 15 to 30 days of your acceptance of the home's condition.