Opting for new home construction
Whether to buy an existing home or have one built is yet another decision to make during the home-buying process. If you decide to go with new construction, a real estate agent can be a powerful advocate in your corner as you negotiate upgrades, a move-in date and other terms with the home builder.Below are some basic pointers to prepare you for the journey ahead.
Selecting a builder
Shopping for a large production or custom home builder can be a daunting task. Start by defining what architectural styles appeal to you and then seek out the builders in your area who offer those styles. Due diligence is essential. Ask friends for referrals to get firsthand accounts; verify the builder’s state license status, if applicable; and check whether they’re certified by the National Association of Home Builders.The builder representative and your real estate agent
A builder representative’s ultimate goal is to sell you a home for the highest profit to the builder. His or her role is to provide a wide range of information to help you in your decision-making, from building restrictions, roads and easements to inspections, warranties, rebates and upgrades. A real estate agent knowledgeable in new-home construction will be able to help you wade through all the data and point out the downsides and upsides of each line item. Agents that know your wants and needs can also help you ask questions. Your agent also can look out for your interests in reviewing the builder’s contract, which often contains more legal jargon than consumer-friendly language. Don’t sign anything without reviewing with your agent.
It’s all about timing
Market conditions greatly dictate a builder’s incentive to make a deal you cannot refuse. When a builder has inventory on his hands, his carrying costs start adding up. When this happens, a builder might be more amenable to strike a favorable deal, whether it’s throwing in upgrades or paying closing costs. A real estate agent can help you know when market conditions are right for these benefits. Also, watch for builder close-out sales. Builders promote these special events when a new subdivision is near completion but empty inventory still remains.A few words about the money
While there are always exceptions, most builders require a large deposit when a purchase agreement is signed. They often also require that the buyer pay for any upgrades prior to closing. If you back out prior to closing, unless the agreement states otherwise, you will lose that money. Make sure you understand every detail in the builder’s contract before signing it. Building can have a lot of hidden expenses – from window treatments to extra light switches. Never commit to your top budget upfront.Lastly, financing for new construction can often be more complicated than on an existing home. Always look into your financing options BEFORE starting the process with a builder.
Check out these additional articles and resources:
- Tips for Buying new Construction (Should I Choose a Custom Builder? Should I Choose a Production Builder?)
- How does a real estate agent help with building a new home?
- How Building a Home Can Save You Money
- What is a (HERS) Index score?
- Questions to Ask When Interviewing Real Estate Agents to assist with the Home Building Process
- Search for a New Construction Home
- What is Your Current Home Worth?
- The process of selling and buying another home
Contact Sarah about buying your new construction home!
