Want to buy brand new? Buying new construction takes a little know-how.
Are you considering purchasing a new home? They have a number of advantages, including energy efficiency and no worn-down parts that need to be repaired—plus, you can customize it precisely how you want it. However, there are a few elements to consider when it comes to new building, such as budget and schedule. Here are a few key factors to consider when choosing whether new built homes are ideal for you.
Tips on how to purchase new construction homes:
Understand what a new construction house is
A new construction house is one in which the buyer is the first person to live in it after it has been built—but this can happen in a variety of ways. A customer can acquire their plot of land and contract with everyone involved in the construction of a custom home, including an architect and builder. On the other end of the scale, a buyer may purchase a fully completed home as well as the land it sits on from a developer. The home-buying process can also fall anywhere in the middle. For example, a customer may acquire vacant property from a developer and then select from a selection of home design alternatives before having a builder construct the home.
Know your customization options (and costs)
Most new homes provide one or more of the following personalization options:
- Built on spec: The house is finished and ready to go.
- Semi-custom: The structure is mostly built, but you can make some changes to it.
- You have complete control over everything.
Once you’ve decided the level you’re comfortable with, be sure you understand what’s included and what’s not. Then write it down. You’ll be disappointed if the quartz counters and hardwoods you adored in the model arrive with a big price tag.
Be aware of new construction timing
Aside from cost, timing is an important consideration when deciding on a customization option (or whether to go with new construction). Overall, the timing for building a home can be unpredictable due to weather, vendor delays, and the need to wait for logistics such as permit clearances.
The faster the procedure should be, the further along the home is in the building process when you buy it (whether it’s semi-custom or on-spec, for example). Building a home can take three to seven months on average, depending on size, but it’s not uncommon for it to take nearly a year if there are any delays along the way.
If you’re thinking of building fresh, go with the choice that best fits your existing living circumstances. Building from the ground up may be for you if you are flexible enough to allow for a lengthy—and perhaps unpredictable—lead time. If not, a semi-custom or built-to-order home may be a better option.
Get your own agent and lender
Purchasing new construction, like any other home purchase, necessitates the formation of a team with your best interests in mind. Just as you would with an existing house purchase, conduct research, interview, employ your real estate agent, and apply to various mortgage lenders to locate the best offer.
Builders frequently have an agent on site as well as preferred lenders, and it’s not uncommon for them to recommend that purchasers employ their team. However, you should conduct your study. While a builder’s lender may offer you incentive money, an outside lender may charge you less in points, resulting in larger savings over the life of your loan.
Research and choose a builder
To identify builders in your area, contact your local home builders’ association (you can get lists through the National Association of Home Builders). Check out the new houses section of your local newspaper’s real estate pages. Make use of your list of builders and houses to:
- Drive by a neighborhood with a number of new homes. Examine the quality and style that you prefer.
- Look up builders on the internet. Local business evaluations, public records, and Better Business Bureau feedback will be found.
- For more information, images, and interviews with staff and clients, visit their websites and social media profiles.
- Interview many builders and obtain references.
Make a smart budget
Choosing a semi- or full-custom new construction home is easy to overspend by selecting one personalization choice at a time. Be realistic about how much housing you can afford, and don’t forget to include hidden costs:
- Landscaping: You’ll almost certainly need to develop your grass when you finish building your house.
- Homeowner’s Associations: If you construct in some neighborhoods, you may be required to pay monthly homeowner’s association fees—and you may be required by their policies to fulfill particular property requirements, which can raise your expenditures.
- Furnishings: Builders will usually install your bathroom vanity but not your toilet paper holder or towel rack, therefore items will be excluded from your contract. Make a budget for the minor furnishings in each room.
Understand your warranty
Warranty coverage on new build homes is often restricted to workmanship and materials. Some warranties cover only the first year (for siding, doors, and trim, for example), others for two years (typically for HVAC, plumbing, and electrical), and still others for a decade for significant structural issues.
Understand what is and isn’t included, and feel free to request adjustments or concessions if you’re not comfortable with the language.
Get home inspections
Home inspections aren’t just for older homes. In reality, when purchasing a new home, you should have two: one before and one after the walls are closed. It’s significantly less expensive to remedy problems like electrical or plumbing before putting up drywall.
Before your final walk-through with the builder, schedule your second house inspection. Try to stay with the inspector while this is going on. They are frequently able to provide you with maintenance suggestions and useful items to look out for in your new property.
Include a house inspection contingency in your sales contract. This way, if something serious goes wrong, you can back out of the contract.
If the home inspections go smoothly, you should be on track for the closing, just like with any other home purchase. Bring your closing fees and a favorite pen, and you’ll be signing your way to house ownership in no time.