As a new home buyer, you couldn’t pick a better time to buy a newly built home. Interest rates are still low and the government has made it more enticing than ever with new incentives. Potential home buyers, however, are skeptical in Reading due to local bankrupt home builders and other construction issues.

The Belovich Group left the West Reading development unfinished when they went bankrupt. Another group went bankrupt two years ago in the Amity Township. On top of that, several local citizens have hired attorneys to litigate severe problems that occurred during the construction of their new homes.

What many may not consider is when builders fail, cities are sometimes responsible for finishing roads and other infrastructure started by the defunct home builder. Fortunately for Pennsylvania municipalities, however, planning laws are in place that require builders to deposit money into an account equivalent to the cost of finishing the work. Municipalities can access the funds to finish the work should the builder go belly up.

Caution is evident in the number of permits obtained this year in Reading for new home construction – 40 in all. That’s only 10% of the typical 400 permits obtained annually.

Although you can’t defer all risk when contracting to buy a newly constructed home, you can mitigate some of that risk by implementing a few precautionary measures. For starters, you definitely want to make sure you have a contract that includes every caveat and requirement you can think of.

Get a real estate attorney to look it over before you sign. Only hire a licensed contractor. Require references from the contractor and check them out. Check with the Better Business Bureau and contact the State Attorney General’s office to see if any complaints were filed against your contractor.

Keep on top of every phase of the work, since the contractor will be paid by the bank for the completion of each phase. If it’s not done to your satisfaction, contact the bank with the particulars. Finally, have verbiage inserted into the contract that waives liability for the homeowner in case the contractor does not pay subcontractors for work completed – e.g., plumbing, electrical, HVAC, etc.

You are now equipped as much as possible to put a contract on a newly constructed home. Now, go forth and build!