Builders of new homes offer or are required to warrant their work for a specified period. Municipal inspections are generally required during different stages to "ensure the life, health, safety, and welfare of the public" but even if something is missed, the ultimate responsibility for building to code belongs to the builder, even if the municipal inspector misses something.

There are four basic stages of residential construction including:

1. The foundation stage begins with excavation, footings, foundation walls or slab, waterproofing, backfill, compaction and underground rough plumbing and electricity. Municipal inspections are done prior to pouring the foundation while items are visible.
2. The framing stage includes the wood or steel framing, exterior walls and roof sheathing, exterior trim and siding, windows, doors, and roofing. Depending on the municipality, there could be inspections of the rough framing separate from the roofing.
   Next in this stage comes rough plumbing including water, waste, and vent piping, rough electrical, rough mechanical, ductwork, wiring, and electrical panel installation. Municipalities will usually inspect plumbing and electrical separately.
3. The wall insulation and drywall installation are done and inspected depending on the municipality before tape and texturing are done.
4. The final stage of construction includes flooring, cabinets, millwork, countertops, tile, mirrors, electrical trim, plumbing trim, and mechanical. Some builders will not install appliances and HVAC until the last stage to protect against theft. Municipal inspections are made in the final electric, plumbing, and mechanical.

A "Final Inspection" is done after all the periodic inspections have been completed and passed.

Defects that manifest themselves during the warranty period are the responsibility of the builder. Unfortunately, some things may go undetected until after the warranty expires leaving the repair expense as the sole burden of the buyer/owner.

A safeguard that the purchaser will not be out of pocket for repair expenses is a home warranty which shifts the liability to the warranty or service contract company. This is a negotiable item that can be paid for by the builder or the buyer. However, this warranty will have a time limit on it and to continue the coverage, the buyer/owner will have to renew it by paying the additional annual premium.

One more safeguard for the purchaser is to hire their own inspector, to conduct periodic inspections during the different phases of construction. Unlike an inspection made on an existing home, the inspector will have to visit the site multiple times during the process. For that reason, constructions inspections are more expensive.

When hiring an inspector for new construction, ask at what stages do they inspect. A typical new construction inspection might be at the end of the foundation stage, another at the end of the framing and rough plumbing, electrical, and mechanical, and the final inspection after the home is completed.

A provision allowing a buyer to hire their own inspector for periodic inspections should be included in the sales contract. Your agent can not only help you get that included but assist in negotiation of any issues that arise because of the periodic inspections.

If you value this extra level of protection in the purchase of a new home, it is important that you have your agent first accompany you to the models so they will be registered as your agent.

Like opening and closing a faucet increases and decreases the water flow, lowering interest rates increases home sales and raising interest rates decreases home sales.

When home sales increase during periods of limited inventory, demand increases and prices go up. Contrarily, when home sales decrease, demand could lessen and prices moderate.

There is opportunity with higher rates because it affects sales and demand, which in turn keeps prices in check. By waiting for rates to come down, and no one knows by how much but certainly not to the 3-4% range, buyers’ pent-up demand will affect the already low supply and cause prices to increase.

Let’s look at a scenario where you could buy a home today for $400,000 with a 90% loan at 6.5% for 30-years with P&I payments of $2,275.44. If interest rates drop to 5.5% in one year but in that same period, the price goes up by 10%, the price would be $440,000 with a 90% loan at 5.5% for 30-years with P&I payments of $2,248.44.

The payment would go down by $27 a month but the price would have risen by $40,000 which would be equity of twice the down payment for the person who purchased a year earlier with a higher rate.

The takeaway in this example is that a person may experience more loss from unrealized equity during periods of high appreciation than waiting for a nominal drop in the interest rate. With rates being a deterrent to buyers that have led to sales slipping 22% year over year in March 2023, sellers may be willing to negotiate.

It seems counterintuitive but higher interest rates may be the help you need to buy a home.