What’s It Like Buying a New Construction Home?
Buying new construction homes is a brand-new experience even for seasoned homeowners. It’s a unique process for homebuyers that requires the guidance of a real estate agent that specializes in new construction. If you’re interested in buying a new home from home builders, then it’s important to get familiar with the home-buying process from the new construction perspective.
So, what’s it like buying a new build? We will break down the basics so that you can know the difference between ordering a custom home that’s new vs. older homes.
What’s Different about Buying a Brand-New Home from a Builder?
Getting your dream home via new construction looks a little different than buying a resale home. However, the good news is that it’s not too much different, there are just a few extra steps and it’s niche so you need a real estate agent who is an expert. A novice realtor that has never negotiated deals for a newly constructed home should not be your go-to choice unless they have the backing of a brokerage that specializes in new developments.
Things that are different about buying new construction.
- Instead of a resale contract, you will sign a builder contract, also known as a “new construction purchase and sale agreement.” This contains similar information to a resale contract with the added details about building timelines and any extra builder and buyer obligations.
- A builder representative functions as the listing agent.
- The home isn’t always move-in ready. There is usually a timeline.
- Builders usually have preferred mortgage lenders that give you the most deals.
- You’ll need a new construction loan, which typically needs strong financial backing.
- Depending on its stage of development, you can choose among floor plans, home design, types of carpet, flooring, and paint colors. It’s part of the typical new construction home checklist!
- Most new homes have a builder’s warranty.
- New homes are up to energy-efficient standards and modern building codes.
- New homes typically have a higher purchase price than an older home.
- Your landscaping may not be ideal after move-in day. Some new construction sites can still have just soil instead of pretty grass right after the work is done. However, this can be easily remedied with some sod and seed planting!
- You may have the option to buy a model home- one that is move-in ready but never had an owner-occupant. This makes it easier to time a move-in day!
Things that are the same as a traditional transaction.
- You will still have a home inspection and typical due diligence phase before you buy your newly built home.
- For a new house, there are still closing costs and other fees like agent commission (but you can get a discount when you use Marketplace Homes).
- New home construction still benefits from a home warranty.
- New homes may also belong to an HOA which requires bylaws and documents
- Though builder-preferred lenders offer perks like reduced interest rates or discounts, you still need to go through the pre-approval process to get your mortgage approved.
- Just like with an older house, you will get to do a final walkthrough before closing day.
- First-time homebuyers need to be financially robust since they don’t have equity to use toward their down payment. Don’t worry though- it’s possible to buy new construction without equity.
- You still get to pay good ol’ property taxes. However, they may be low for one year if it’s a new neighborhood in a developing area. When property valuations jump up after development, you can see a jump in the taxes you pay.
Buying a New Construction Home: A Closer Look.
Though a new construction home purchase can feel like you’re entering a whole new world, there are many things that stay the same- such as working alongside your realtor, finding a solution for your current family home (sell it or lease it), negotiating the sales price and incentives, and preparing logistics like finances and timelines. The builder contract and extended move-in timeline are the two main things that are different that require the guidance of a brokerage that is used to working with builders of single-family homes.
There are also a few advantages you can get with new construction over a resale home. First of all, new construction homeowners experience less maintenance in the first few years compared to buyers of older homes. Renovations aren’t necessary since everything in the house is new, which justifies its higher home value. You also get to be involved with designing your home with paint, light fixtures, and even square footage/floor plans if you sign the contract before the home is entirely built.
A New Construction Realtor is Essential
To navigate the process of new construction homeownership, from negotiation with the builder sales rep to ensuring you are squared away with your future homeowner’s association, you need to get a realtor’s help. Having one that specializes in new construction is going to be a game-changer for your comfort level and how smooth the process is.
If you’re looking to buy a new construction home, speak to the real estate experts at Marketplace Homes. We partner with most of the nation’s top 20 builders and have agents experienced in new construction home deals.
Alicia Persson is a real estate content/SEO writer at Marketplace Homes. She has several years of experience working in real estate teams that specialized in investments and property management. Before she joined Marketplace, she was a freelance writer for 7 years, leading to a specialization in real estate and home living content for boutique digital marketing agencies. During her writing years, she learned the basics of SEO and gained experience writing for many different clients, making her highly versatile at creating diverse content.
She is a proud University of Virginia master’s graduate and enjoyed her undergraduate years at the University of Mary Washington. When Alicia is not writing, she plays keytar and sings in a local 90’s rock cover band, or she spends time with her amazing family.