Purchasing a newly built home is much like buying a previously-owned property, except for a few important considerations. Here’s how to buy a new-construction home while avoiding common pitfalls that can leave inexperienced buyers frustrated and confused.
It’s common for prospective home buyers to seek pre-approval from at least one lender. This essentially represents what the lender is willing to offer based on your financial standing and specific terms, such as income, duration of employment, credit, assets and tax returns. Builders may offer their own financing options, but it’s always best to shop around.
Hire a real estate agent.
A real estate agent is especially valuable when you’re considering production or semi-custom properties. In addition to providing tips for buying new construction homes, they can work on your behalf to secure a better deal. When purchasing a new-construction home, you will be negotiating with the builder’s sales representative. If you’re buying a custom home, an experienced agent can provide invaluable assistance with timelines, negotiations on financial details and other contractual issues.
Countless people believe that builders will not negotiate over the price of a new-construction home, but this is a myth. You can negotiate price, loan fees, lot lines and other items. Hiring a real estate agent with experience in new-construction homes can provide you with extra confidence when negotiating with builders. It also costs you nothing as a buyer since builders usually pay the real estate agent’s commission from their marketing budgets.
Do your research.
Some builders are upstart locally owned businesses, while others are parts of huge national corporations. When choosing a builder, you need to do plenty of research. Check online reviews, Better Business Bureau ratings and consult with your real estate agent. You should also explore various neighborhoods, consider available amenities, and investigate the local homeowner’s association’s rules and costs.
Know your options.
Before you can negotiate a sale price, you need to look over your options. For semi-custom and custom homes, there will be all sorts of interior and exterior options to consider. This includes everything from roofing designs and materials to siding and the design of your kitchen. Production homes are more limited, but there are still decisions to make.
You should also make sure to budget for things not included by the builder. New homes often don’t include basic items, such as towel racks, toilet paper holders, window coverings and even light fixtures in some instances. Clarify exactly what is and isn’t considered standard with your new-construction home, so there won’t be any surprises once you move in.
Your builder will conduct several inspections throughout different stages of the building process. To make certain everything is constructed as promised, however, you will want to hire your own independent inspector. You will also want to review your warranties to determine exactly what’s covered and for how long.
A new-construction home brings exciting opportunities and several unique challenges. To avoid unpleasant surprises, it’s best to thoroughly research potential builders and get professional assistance from an experienced real estate agent who can help you get the best possible deal.