It’s important that any promises or agreements made by the builder are written. This helps prevent misunderstandings or mistakes.
Experienced real estate agents are familiar with new construction contracts and can work on your behalf to negotiate. They can also help you understand any specific house covenants that may be an issue.
1. Get PreApproved
Before you make an offer on any home, including new construction, meet with a mortgage lender and get preapproved. This will give you a sense of what you can afford and will come in handy during negotiations. Some builders may require that you work with their in-house lenders, but it’s always a good idea to shop around. You’ll have more options to choose from, and you can save on fees by using a different lender.
During the preapproval process, your lender will go over your credit report and assess your current financial situation to determine how much you can borrow. They’ll also discuss loan types and interest rates, as well as how much your payments will be. Then they’ll prepare a preapproval letter, which will be a document the builder can accept as proof of your ability to qualify for a mortgage and can be submitted when you find your perfect home.
A mortgage expert can help you decide on the best loan type for your needs and walk you through the preapproval process. They can also explain any additional requirements that may be specific to new construction. For example, some communities require that you purchase insurance, which can be a cost that should be included in your overall budget.
New construction homes are often built to the latest safety and building codes, which means they’ll likely be more energy efficient than older homes. This can save you on your energy bills and may lower your home insurance costs.
Another benefit of buying a new construction home is the customization options that are available. You might be able to choose your floor plan, housing lot, community, expert-selected features and more. This is a great opportunity to truly make your house feel like your own. However, remember that upgrades can add up quickly, so it’s important to consider if they’re worth the price tag.
2. Find Your Lot
It’s important to search for the right neighborhood when considering buying a new construction home. The neighborhood will affect everything from your commute to the amenities available. Ensure the schools, crime rate and other important factors are in line with your family’s needs. Look for areas that are developing or have potential for growth in the future. It’s also a good idea to visit other homes in the area so you can evaluate the area and decide if it’s a place you can see yourself living for years to come.
When searching for new construction, you may not be able to find as many photos of the property as you would with a pre-owned home, but this doesn’t mean it’s impossible to find a perfect location. Be sure to work with a real estate agent who knows the ins and out of new construction homes, and will be able to help you navigate the process from start to finish.
Often, new construction is part of a larger community that includes different types of homes that are all built by the same builder. This can make it easy to select your preferred home, as you’ll likely have a few different floor plans to choose from. However, it’s still a good idea to have your own inspector conduct a thorough inspection of the property before you close on it.
You’ll also need to save for a down payment, closing costs and insurance (including homeowners insurance). Your new construction home will need maintenance and repairs as well. In some cases, it’s best to buy a new construction home that is already under warranty as this can help protect you in case of any problems or defects down the road.
3. Choose Your Builder
Choosing the right builder to bring your new construction home to life is essential. You’ll be living with this decision for years so take the time to make a choice that you feel confident about. One way to do this is to ask around for recommendations from locals who have bought a new construction home in the area recently. You can also find out about builders’ reputations by speaking with lenders, real estate agents and building material suppliers. They’ll likely have a unique yet helpful perspective to share on which Builders are most respected in the community.
Once you’ve narrowed down your choices, consider meeting with the builders and touring their model homes. During these meetings, be sure to ask as many questions as you can. The type of service you receive during this initial interaction is a good indicator of the level of customer care you’ll experience throughout the building process.
Another thing to pay attention to is the builder’s level of experience. This is particularly important if you have a specific construction style in mind. For example, if you’re considering a modern farmhouse, look for builders who specialize in this design style to ensure they have the knowledge and expertise to turn your vision into reality.
You may also want to inquire about the builder’s team structure and their experience working with architects. Ideally, you’ll choose a builder who prioritizes a collaborative partnership with their architectural and interior design teams to avoid miscommunication and costly mistakes that can delay the project and add extra costs.
4. Make Your Offer
New construction homes have plenty of advantages over resale properties, including modern floor plans and reduced maintenance costs. They also have the latest safety and building codes, meaning you’ll likely pay less for homeowners insurance. But if you’re in the market for a new home, it’s important to find the right builder and neighborhood for your needs. Luckily, a Realtor(r) can help.
When searching for a builder, consider an agent who specializes in new construction. These agents know the process inside and out and will be able to help you avoid any potential snags. In addition, they can provide you with the latest information about a neighborhood and its amenities. They can even share details like crime rates and schools to help you make a decision that will benefit your family for years to come.
Another advantage of working with an experienced Realtor(r) when buying a new construction home is the fact that they can negotiate on your behalf. Builders may be unwilling to budge on the price, but an expert real estate agent can often work out some sort of compromise. This could include knocking a few thousand dollars off the home’s price or adding in some upgrades that would otherwise be cost prohibitive.
After the builder accepts your offer, you’ll sign a purchase agreement and start making decisions about your new home. An experienced Realtor(r) can advise you on these choices and counsel you on any upgrades that will add the most value to your home in the long run. They can also point out any areas of the home that aren’t up to code and need to be addressed before closing.
Once your contract is negotiated, and all contingencies have been met, the closing process will begin. The closing is where all the verification, underwriting, and signatures occur that finalize your transaction and you officially become the owner of the property.
Closing is also where your real estate agent will come into play, as they will have experience working with new construction purchases. It’s important for buyers to understand that purchasing a new construction home is not like buying an existing one. While the same basic steps take place, the negotiations and procedures differ significantly.
Some of the most common differences in the closing process when buying a new construction home include financing, deposits, and timing. For instance, new construction loans typically require that you get pre-approved before the builder can start the project. This is because the home will not be finished and deemed ready for occupancy until the loan closes, so there needs to be sufficient time in the schedule to do this.
It’s also important to find out if your builder has preferred lenders they work with. This can influence your decision, since the builders may offer incentives such as reduced mortgage rates to encourage buyers to use their preferred lenders. It’s important to shop around and compare different lenders as much as possible, so you can find the best deal.
Buyers should also be aware that builders often provide an express warranty for the home, indicating any problems with the structure within a certain period of time after closing. Your real estate agent can help you review this contract and make sure it is in your best interest. They can also walk you through your final walkthrough before closing to ensure that all the issues that were promised to be fixed have actually been addressed.