New Construction: Your Guide to Buying a New Home

Discover the advantages of purchasing a newly built home compared to an existing one. With new construction, you benefit from modern design, updated construction standards, and brand new appliances. Additionally, you may have the opportunity to personalize your home by making design choices, such as upgrading tiles or selecting carpet colors. Say goodbye to the hassle of dealing with projects and repairs commonly found in older homes.

To assist you in finding and buying new construction, here are some valuable tips:

1. Assemble your team of experts:

Ensure you have your own real estate agent to represent your interests, even if the builder has their own sales force or agent. The on-site agent represents the builder and the builder's best interest. Additionally, be aware that builders may require pre-approval from their preferred lender. Although you can often choose your own lender, in certain cases, securing alternative financing for undeveloped homes might prove challenging.

2. Find a brand new home:

Finding a newly built or under-construction home requires a comprehensive search strategy. While refining your search on third party websites like Zillow or Trulia to display only new construction is a good start, it's important to explore other avenues as well. Collaborating with a knowledgeable real estate agent can greatly enhance your chances of discovering new developments in your desired area. Remember, new construction projects may not always be part of a larger development. Some builders acquire individual lots and construct one or two homes at a time. 

3. Research the builder:

Before committing to a builder, conduct online research to read reviews about their reputation for quality work and their financial stability. Verify if they offer a comprehensive warranty for their homes.

4. Understand what you're buying:

When purchasing new construction, you may buy before the home is finished. To envision the final result, visit model homes in the development. However, be cautious as model homes may include both standard and pricier custom finishes. Request a list detailing standard and upgraded features, including associated costs, to ensure clarity.

5. Negotiating the deal:

While builders typically don't negotiate on the home price, you can negotiate on other aspects such as upgraded features and closing costs. Remember that buying early in a development phase might offer more favorable terms. However, there is a risk of the builder encountering financial difficulties or future buyers securing better deals.

6. Deposits and contracts:

Be prepared to provide a deposit, typically ranging from a few thousand dollars to 10% of the home's price, even if construction is ongoing. Your agent can guide you through the contract, ensuring a review period and explaining refund policies. Pay attention to the completion date and any provisions allowing for delays caused by permits or materials.

7. Dealing with delays:

Understand your options in case your home is not ready on time. Ensure all agreements are documented in the contract to avoid misunderstandings. Your agent can help you navigate the details and clarify your rights.

8. Inspections and warranties:

Although your home is new, it is still essential to conduct an inspection to identify any issues and ensure code compliance. An inspection allows you to work with the builder to address problems before closing. Familiarize yourself with manufacturer warranties for appliances and inquire about the builder's warranty, often provided through a third-party warranty company.

With these insights and guidance from your real estate agent, you'll be well-equipped to navigate the process of purchasing a brand new home.