Buying a new construction home is a dream for many. It is hard to bet the new house smell and the opportunity to customize your property to fit your needs. However, the home buying process can also be more intimidating than previously owned houses.
If you are considering buying a new construction home, this guide will help you understand each step and prepare for this unique process.
Research Neighborhoods and Builders
Most new construction homes are sold directly by the builder. To find the perfect home, familiarize yourself with the contractors in your area and the different neighborhoods they offer. Many include unique features, such as a community pool, green spaces, and so on.
It is a good idea to research the communities they have previously developed and visit them if possible to see how they fared over time. You can also find testimonials and reviews online.
Find a Trusted Real Estate Agent
Some buyers may hesitate about hiring a real estate agent to buy a new construction home. However, while many custom builders have a team of facilitators to help with the real estate transaction, you will still need someone on your side to guide you through the process.
Find a real estate agent who has experience dealing with custom homes and has an established relationship with local builders since those transactions are very different from resale homes.
Get Financed and Pre-Approved
Custom builders may have a network of preferred mortgage lenders and offer incentives to encourage buyers to use them. Nevertheless, it is a good idea to shop around since you may get a better rate with other lenders. Either way, you will need to be pre-approved before purchasing your new construction home.
Understand Custom and Standard Features
Model homes are often built with all the bells and whistles to entice future buyers. However, your future home may look very different – unless you are ready to put in the extra cash. While touring model homes, make sure to ask the builder which features custom and which ones are standard, especially if there is an element that particularly catches your eye. It could include anything, from the floor plan to the finishes and appliances.
Ask for a list of prices so you can stay within budget while setting up your dream custom home. You may even be able to purchase the model home for a better deal.
Sale contracts for custom homes can be very long and tedious. However, make sure to read the fine prints and have your real estate agent review them to see if anything stands out. In addition, you will need to ensure that everything the custom builder may have told you while discussing your project is in writing, as well as the timeline.
While negotiating your contract, remember that builders are unlikely to budge on prices to avoid setting up a precedent. On the other hand, they are more likely to negotiate concessions, such as paying for closing costs or upgrades.
Do you need a home inspection for a new construction property? After all, everything is brand new. Nevertheless, it is always a good idea to set up a home inspection anyway. It is your chance to check that everything has been done to the highest standard and that you will not run into any issues down the road.
While most builders offer a warranty that may cover some of the problems you may encounter later on, it is best to prevent damages as much as possible and have the contractor fix potential issues before closing.
Your final walk-through is your last chance to solve any issue before the builder hands you over the keys to your custom home. Take the time to examine everything thoroughly, and do not hesitate to reach out if you notice anything amiss.
Everything should be done according to your contract – you may want to bring your file along as a refresher. Check each element for functionality as well.
Be Aware of New Construction Timing
Of course, you want to settle in your new house as fast as possible. However, buying a custom home often requires patience. Unlike already built homes, you may need to delay with unexpected delays caused by extreme weather, out-of-stock items, late permit delivery, and so on. On average, it takes approximately eight months to build a home, from permit authorization to completion.
Make sure you communicate with your builder to see if the timeline is respected. If your home is not completed by a specific date, you may be entitled to compensation under your home warranty. However, the builder is also allowed to change the completion date in some circumstances. Buying a custom home requires flexibility.
Closing the Deal
Finally, you made it to closing day. Ensure that your paperwork is in order and that you are satisfied with your new home after the final walk-through and home inspection. Read all the documents thoroughly and get ready to settle into your brand new home.
Buying a new construction home often requires more steps and flexibility than a resale home. However, you will have the satisfaction of enjoying a custom home fit for your taste and lifestyle.