Yes, mulch NOW and my advice would be to not water as frequently, but deeply when you do water. I actually drag a hose over and let it barely run so as to let ALL of the water soak in and go to the roots. Much better that sprinkling often.

I second Carrie's comment. You can put mulch out at any time, and you'll have to replenish it regularly as it decomposes (which is what you want, it then feeds the plants). Most plants actually do better when they're watered deeply and then left to dry out a bit before watering again. It helps them develop deeper root systems which really works better. You can still use a sprinkler system, just test it to find out how long it takes to put out 1" of water (scatter a few empty tuna cans around). If the water starts to run off before you get to 1", set it to run in cycles so that it waters until just before the water runs off in one area then switches to another. Program enough breaks in between so that the water soaks in before that area gets hit again.

The other thing I'd do is identify the plants and see if they're something you really want to keep. Some builders and home owners like to plant things that don't really like it here but will tolerate it if they're watered and babied enough. If the plants require more care or maintenance or water than you're willing to give them, don't feel bad about pulling them out and starting over. It's YOUR house, so YOU get to choose what you have in the yard! :)