What You Confirm Before Signing Matters More Than What You Ask For Later
A builder contract is written by the builder, for the builder. Once you sign it, your leverage drops to almost nothing. So confirm five things in writing before you sign: what the base price actually includes, what the lot premium and upgrades really cost, what the property tax bill will look like in year two, whether you can bring your own inspector, and exactly what the warranty covers and for how long.
New construction is a good buy for a lot of families across Naperville, Oswego, Plainfield and Yorkville. It is also the one purchase where buyers routinely sign paperwork they have never seen before, in a model home, on a Saturday. Here is the checklist I use.
The Builder’s Contract Is Not the Contract You Are Used To
Most resale purchases in the Chicago suburbs run on a standard form contract with an attorney review period built in. Builder contracts often do not work that way. They are proprietary documents, and the terms that matter to you are frequently the ones buried in the back.
Have a real estate attorney read it before you sign, not after. These are the clauses to ask about by name.
- Is your deposit refundable, and under what conditions? Builder deposits are often far larger than earnest money on a resale, and the circumstances under which you get it back are narrower than you would expect.
- What happens if construction runs long? Look for how the completion date is defined, what counts as an excused delay, and whether you have any remedy at all if the house is months late.
- Is there an arbitration clause? Many builder contracts require disputes to go to arbitration rather than court. That is not automatically bad, but you should know it going in.
- Does the contract waive the implied warranty of habitability? Illinois courts have long recognized an implied warranty of habitability on new homes sold by a builder. Builder contracts frequently include a written waiver of it, exchanged for the express written warranty instead. Your attorney should explain exactly what you are giving up.
- Can the builder substitute materials? Most contracts allow substitution of comparable materials. Ask who decides what counts as comparable.
Base Price, Lot Premium and Upgrades Are Three Different Numbers
The price on the sign is the base price for that floor plan on a standard lot with standard finishes. Almost nobody buys that house.
Lot premiums come first. A walkout lot, a pond view, a cul-de-sac position or a deeper backyard all carry a premium, and those can run well into five figures in the stronger communities. Some premiums hold their value at resale and some do not. A walkout basement and a private rear yard tend to hold. A premium paid for proximity to the clubhouse often does not.
Then come upgrades. This is where budgets break. The design center is a sales environment, the selections happen fast, and the numbers are quoted as add-ons rather than as a running total. Ask for the itemized total after every appointment and compare it against your financing, because most upgrades have to be paid for in cash or rolled into the loan only if the appraisal supports it.
Here is what I mean about what is worth paying for. Structural choices you cannot change later are usually worth it, things like ceiling height, window placement, rough-in plumbing, an extended garage, or added electrical. Finishes you can replace in five years usually are not, because you will pay the builder a premium today for something a good contractor installs for less later. Across more than $135 million in career sales, the new-construction buyers who did best were the ones who spent on structure and stayed disciplined on finishes.
Your First Property Tax Bill Will Not Be Your Real One
This one catches people every year. Illinois bills property taxes a year in arrears, and a new home is assessed based on what existed on the assessment date. If the house was a foundation or an empty lot at that point, your first bill reflects mostly land.
Then the improvement gets picked up and the bill jumps, sometimes dramatically. Buyers who budgeted from that first bill get a hard surprise in year two, and it is entirely avoidable.
Do not let the builder’s sales representative estimate this for you. Call the township assessor’s office directly, or the county supervisor of assessments in Will, Kendall, Kane or DuPage County depending on where you are building, and ask what a completed home of that size and value in that subdivision is currently assessed at. Budget from that number.
Yes, You Can and Should Hire Your Own Inspector
Builders will tell you the municipality inspects the home at every stage. That is true, and it is not the same thing. Municipal inspections confirm code compliance. They are not looking out for you.
Schedule your own inspections at three points.
- Pre-drywall. This is the most valuable inspection you will ever buy. Framing, plumbing rough-in, electrical, HVAC runs and waterproofing are all still visible. Once the drywall goes up, nobody sees any of it again.
- Final walkthrough before closing. This is where your punch list comes from. Be thorough and be specific in writing. Verbal promises from a superintendent do not survive his transfer to another community.
- Before the first-year warranty expires. Around month ten or eleven, hire the inspector again. Settling cracks, grading and drainage problems, and HVAC issues tend to reveal themselves after one full Chicago winter and one full summer.
If a builder refuses to allow an independent inspection, treat that as information about the builder.
Ask What the Warranty Covers Before You Need It
Most new-home warranties in this market follow a tiered structure. Workmanship and finishes are covered for a short initial period, mechanical systems for a few years, and major structural components for roughly a decade. The specific terms vary by builder and by warranty administrator, so read the actual document rather than assuming the standard applies.
The questions that matter are practical ones. Who do you call, the builder or a third-party administrator? What is the claim process and is there a deadline for reporting? Are there exclusions for things like drywall cracks, concrete cracks, or grading and drainage, because those are the most common first-year complaints? And does the warranty transfer if you sell in three years?
Bring Your Agent on the First Visit, Not the Second
The person greeting you in the model home works for the builder. They are often good at their job and pleasant to deal with, and they represent the seller’s interest in every conversation you have.
Most builders require your agent to be registered with you on your first visit for that agent to represent you in the transaction. Walk in alone, sign the guest register, and you may find you have given up representation on a purchase worth several hundred thousand dollars. It costs you nothing to bring your own representation along, and in most cases the builder pays that compensation out of the marketing budget. Take a look at how this plays out in communities like Grande Park in Yorkville and newer Naperville subdivisions such as Ashwood Creek, where builder and resale inventory sit side by side.
Key Takeaways
- Have a real estate attorney read the builder contract before you sign, with specific attention to deposit refundability, delay language, arbitration, and any waiver of the implied warranty of habitability.
- Treat base price, lot premium and upgrades as three separate budgets, and ask for a running itemized total after every design center appointment.
- Spend on structural items you cannot change later. Stay disciplined on finishes you can replace.
- Never budget from the first tax bill. Call the township assessor and ask what a finished home in that subdivision is assessed at.
- Hire your own inspector at pre-drywall, at final walkthrough, and again before the first-year warranty runs out.
- Bring your own agent to the very first visit. Registration rules usually make that your only chance.
Frequently Asked Questions
Can I hire my own home inspector on a new construction home?
Yes, and you should. Municipal inspections confirm that the home meets code, but they are not performed on your behalf. An independent pre-drywall inspection is the single most valuable one, because framing, plumbing, electrical and waterproofing are still visible at that stage.
Why did my property taxes go up so much in the second year on a new home?
Illinois assesses property based on what existed as of the assessment date and bills a year in arrears. If your home was unfinished at that point, your first bill reflects mostly the land. Once the completed house is assessed, the bill rises to reflect the full value. Ask your township assessor what comparable finished homes in the subdivision are assessed at before you set your budget.
Are lot premiums negotiable when buying new construction?
Sometimes, though builders protect base price and premiums more aggressively than they protect upgrades. Builders are often more willing to give on closing cost assistance, a rate buydown through their preferred lender, or a package of included upgrades than on the advertised price, because published price cuts affect every other home in the community.
What does a new construction home warranty usually cover?
Most follow a tiered structure with short-term coverage on workmanship and finishes, a few years on mechanical systems, and roughly a decade on major structural elements. Coverage, exclusions and claim deadlines vary by builder, so read the actual warranty document and confirm whether it transfers to a future buyer.
Do I need a real estate agent to buy from a builder?
You are not required to have one, but the builder’s sales representative works for the builder. Most builders require your agent to register with you on your first visit in order to represent you, so bring your agent to that first appointment rather than after you have already toured the models.
