Buying a new construction home can be intimidating. While the builder will have options to choose from, you still have to decide on a lot:
- Choose a floor plan.
- Decide on upgrades.
- Find financing.
- Make decisions that you may not expect to make.
If decisions aren’t your thing, you can buy a new construction home already built and ready to move in.
To get you all the tips for buying a new construction home, we did the research so you can walk through the process with the information you need to help it move as smoothly as possible.
Find a real estate agent who specializes in new construction
Finding a real estate agent specializing in the type of home you’re looking for, as with any real estate transaction, is critical to success. Focus your search for an agent on those who regularly work with new construction homes.
Even though you may be able to buy a new construction home directly from the builder without the assistance of a buyer’s agent, it’s important to consider the advantages of working with a buyer’s agent. Some examples are:
- The real estate agent can assist you in selecting a development that will meet your needs and provide information on the benefits, drawbacks, amenities, and HOA requirements.
- They may have established relationships with local builders and can assist you in negotiating with the builder to ensure you get what you want.
- They are a neutral third party with no emotional ties to the process. As a result, they can assist you in making more objective decisions.
- They can assist you with managing the timeline, selecting upgrades, inspections, and closing.
Search for a mortgage lender
Not all mortgage lenders are the same. The builder may have a preferred lender, which is a good place to start — but it’s critical to get preapproved with multiple lenders to see who is offering the best terms for your specific situation.
Once you’ve submitted all of your documentation, preapproval can take as little as one business day. Once you’ve been preapproved, you can compare each lender’s rates, terms, and closing costs.
The mortgage company will pull your credit score, which may temporarily lower it. However, depending on the credit-scoring model the lender uses, multiple credit checks in a short period may only be counted as one inquiry.
Search the builder
Make sure to do your homework on potential builders. Examine their previous developments for feedback on the neighborhoods and the construction process. You can also conduct general Google searches to see if there are any lawsuits or larger issues that may impact their work on their homes.
Some things to look out for are:
- Previous clients’ experiences. Were they pleased with the outcome?
- Is there anything that keeps coming up in different reviews?
- Can you learn anything about their process or the materials they use?
- How many houses and developments have they constructed?
Research the neighborhood
After you’ve narrowed down your builder and neighborhood choices, research what your potential neighborhood has to offer. If the neighborhood is still being built, look into what amenities you will have access to — a pool, parks, walking trails — and drive through the area to see what is nearby. Shop at the grocery store, grab a coffee, and explore the nightlife (or day life).
If the neighborhood is already established, move in! Take a walk, take your children to the park, talk to potential neighbors, and drive to work from the area to see how long your commute will be. You can also use social media to learn more about what life is like in your neighborhood. Check to see if the neighborhood is on Nextdoor or has a Facebook page — you may not be able to join either until you live in the neighborhood.
Another consideration is the neighborhood’s homeowners association (HOA). To find out what the monthly fees are, the HOA may have a website, or you can contact the HOA directly. Take a look at the covenants, conditions, and restrictions (CC&Rs) to see what is and isn’t allowed. Some HOAs are stricter than others, so understand what you’re getting into and what benefits they provide you as a potential homeowner.
Choose your lot and be picky about it.
There are various lots to choose from in any given development. When it comes time to pick yours, keep the following in mind:
- The lot’s characteristics – Some lots will be labeled or classified based on the type of home that can be built on them. A flat lot, for example, a lookout lot or a walkout lot.
- How will the house be oriented – will it face the sunrise or the sunset? What will the view be like from the places where you’ll be spending the most time?
- The effect of the slope on drainage – If the lot is sloped, talk to the builder about drainage plans to keep the home from flooding.
- How close it is to the main road – Stand on the lot for a while and count how many cars pass by at any given time. Choose a lot at the end of a cul-de-sac or at least away from the main road if you prefer more privacy.
Select your floor plan wisely
This is when things start to get exciting! Here are a few things to think about when selecting a floor plan:
- Current requirements – Do you require an office space or a large kitchen to cook for large groups? What number of bedrooms do you require? Do you want your basement to be finished?
- Future requirements – How much space will you require if you plan to expand your family? Do you intend to have in-laws or your parents move in the future and need to consider accessibility? Are you starting a business and in need of an office or workshop?
- Storage – Think about how much storage you have now and use that as a starting point for how much storage space you’ll need in your new home.
- Maximize your space and flow – If you have a small floor plan, consider using an open concept to make the space feel larger. Make an imaginary walkthrough to see if the floor plan will work for you.
Builders will frequently provide standard floor plans with customization options, or you can collaborate with them to design a custom plan.
Read the fine print
When you’ve decided on a builder and a neighborhood, and you’re about to sign a contract, make sure to read the fine print in any documents from your builder. This ensures that you understand what is and is not included. Take special note of details such as appliance packages, lighting, and landscaping.
This is where your agent comes in; having someone on your team who understands these contracts is your best bet for getting a great deal on your dream home.
See Also: 7 Ways to save money when buying a house
Negotiate everything you can
Even if your builder appears to be firm in their plans and prices, you can still negotiate and ensure you’re getting the best deal for you. You may be able to negotiate the following aspects of the construction:
- Floor plans
- Upgrades and fixtures
This is especially true if you notice that the market in your area is slowing or if the builder starts offering incentives to work with them. When it comes time to negotiate, Real suggests focusing on upgrades or credits for interest rate reductions rather than the home’s actual price. Most builders will not budge on the final price of the home because doing so could set a precedent for future home prices in their development.
Tips For Buying a New Construction Home Conclusion
Purchasing a new construction home involves numerous decisions. It can be more difficult than buying an existing home because you will be able to see it once it’s built. However, it also means that you’ll be living in a brand-new home that you can completely customize. Working with a reputable real estate agent and a professional builder will help ensure that the process goes smoothly and that you are satisfied with the result.