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Buying new construction sounds appealing to many homebuyers. Doing so offers a lot of advantages — building it to today’s modern standards, having everything brand new, and personalizing it based on your own preferences.
However, a lot is at stake when buying new construction. It goes way beyond looking at model homes, planning the interiors, and signing off. There are also a lot of details and moving parts to consider.
Check out these tips on how to buy a new construction home.
9 Things to Remember When Buying New Construction
1. Do Understand the Process
A crucial new construction home buying tip is knowing and understanding the processes that go with it.
Generally, you can buy a brand new home in one of three ways:
- Custom - You design and build the home to your specifications.
- Semi-custom - You can choose from pre-set finishes and upgrades.
- Spec or production - You get pre-built specs, but can still likely choose a few colors, designs, and add-ons.
You also need to evaluate if buying a new construction suits your current situation. Know that doing this will entail additional costs, time, and changes to your lifestyle.
2. Don’t Skip Out on Working with an Experienced Agent and Lender
A real estate agent is beneficial when buying new construction as they can assist you in the nitty-gritty of the journey. They can help you find the right builder, walk through inspections, and negotiate financial details, timelines, and other contractual matters.
When choosing your agent, it helps to know:
- How many new construction properties have they sold?
- How familiar are they with the prospective builder and how many of their homes have they sold?
- How much do they know about the new construction in your chosen area?
Similarly, buying new construction entails finding out who will be doing the financing, so it’s best to find a lender that’s experienced in the niche.
Do you get an end loan from a traditional lender or does the builder have a preferred lender? In the new construction phase, many builders may offer incentives — like reduced closing costs, low interest rates, or special discounts — if you use their lender.
Do extensive research before signing off with any lender. Choose one that has decent rates, excellent customer service, and a good reputation. Make sure you also understand how their loan works from start to finish.
3. Do Research Prospective Builders and Neighborhoods
It’s best to know the track record of prospective builders, especially in adhering to local building codes. Check their rating with the Better Business Bureau or a local/state attorney.
It’s helpful to see online reviews or customer engagement on their social media accounts. If possible, connect with people currently living in the builder’s development to get more details about the community.
You can even drive around your desired neighborhood, walk around, and get a closer look at the amenities. Try to talk to current homeowners, ask about their experience with the developer, and learn a bit about their homeowners’ association.
Essentially, knowing about the builder and the community will help you decide whether or not the neighborhood suits you and your family.
4. Don’t Forget About New Construction Timelines
The timelines for building and buying new construction homes can be unpredictable. On average, new construction homes can take five to seven months (but sometimes longer, especially right now).
Delays can happen along the way. Factors like late permit approvals, vendor delays, or weather changes can impact your timing. Plus, the more customized your home is, the more unreliable the timeline of completion can be.
Choose the build option that suits your living situation. If a lengthy lead time is possible, building custom is for you; otherwise, a semi-custom or spec home is recommended.
Also, work with the builder, your real estate agent, and lender to determine how to best manage your new construction timeline.
5. Do Know What’s Standard and What Can be Upgraded
One of the most important new construction home buying tips involves picking out your home’s finishing touches.
Usually, the builder will provide you with standard options — basic cabinets, countertops, flooring, light fixtures, and paint color. Upgrades are added features you’ll have to pay extra for to enhance your new home and add a bit of your personality.
Secure a feature sheet of what comes with the base home price and what upgrades can be made. Ask your agent whether or not the upgrade is worth the investment. It also helps to reach out to vendors directly as some upgrades can come out cheaper than what builders usually charge.
If there’s anything you don’t understand, don’t hesitate to ask. Remember, buying new construction is a long-term investment.
6. Don’t Miss Out on Making a Smart Budget
When buying new construction, it’s ideal to consider the future value of your home. Try to focus on structural improvements that would be more expensive or impossible to add later. Minimize upgrades that are purely aesthetics or unnecessary at the moment.
Know that you’ll also have to budget for other essentials — home and life insurance, property taxes, HOA fees, maintenance and renovations, emergency funds, and utilities.
In this step, it helps to have a professional on your side to help you negotiate and secure the best possible deal. It may not always mean the lowest cost, but it considers the upgrades that can increase the value of your property.
7. Don’t Forget to Schedule Inspections
Issues are inevitable when you’re buying new construction, even if you’ve hired the best builder in your area. As such, it’s important that you go through a few home inspections during the building process.
It’s best to hire a certified home inspector who can:
- Review the work done by the builder.
- Deliver a written report that includes their findings, pictures, analysis, and recommendations.
- Coordinate with the builder on identified issues to have them fixed.
- Offer maintenance tips or things to watch out for in your new home.
In addition, when buying new construction homes, have at least two inspections before closing the deal: one before the walls are closed, and one after. This helps address common problems such as electrical issues, exposed roof nails, leaky plumbing, or missing or unprotected outlets.
Ultimately, having inspections helps ensure the builder has done as planned and agreed, saving you expenses and headaches in the long run.
8. Do Understand Your Warranty Options
Warranties are a great way to protect yourself and for builders to guarantee the quality of their homes. All new homes come with a warranty stating that major structural defects will be repaired. Some builders even offer coverage beyond what’s required by law.
Home warranties can vary in length, coverage, and limitations. Make sure your warranty options explicitly detail these out.
If some things are unclear, have your real estate attorney double check the stipulations. Don’t be afraid to clarify or ask for changes if you’re not comfortable with the language. And be sure that you understand the process of initiating claims before purchasing the home.
When buying new construction, knowing your options will help save you time, money, and effort in the long run.
9. Do Know When to Close the Deal
Buying new construction is a long-term commitment. That’s why it’s vital to learn and understand the experience of homeownership as well as the mortgage process.
Read everything you can find, especially every document your agent, broker, lawyer, or sales associate will give you. Pay attention even to the smallest details. If anything stands out, reach out for clarification.
Remember, don’t rush this process. Sign the deal only once you fully understand what every provision means.
Buying a new construction home is an exciting journey, but it comes with a lot of work that may be beyond your expectations. These nine do’s and don’ts on how to buy a new construction home will help ensure that you’re on the right path in securing your property.
Are you looking to buy new construction in Las Vegas? The Brendan King Group can help. Contact us today and let’s find your dream home.
