Buying New Construction

When Shopping for your home, you’ll discover that most homes on the market are resale. Yet, one out of four homebuyers purchase a new home.

As you can see, there are advantages to both. Most people consider both new and existing homes before they decide to purchase. Should you be thinking about buying a new house, here are 10 points to consider before you visit your first model home.

Before you visit your first model home, sit down with a buyer's agent and do your homework. You’ll want to be prepared so that you can determine a comfortable price range for your new home.

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If you own a home, you’ll first need to know the net proceeds from its sale in order to determine how much cash you’ll have to work with. Don’t simply estimate this but carefully calculate every possible selling cost. If you’re a first time buyer, you’ll need to first qualify your income. Determine the size of your down payment, then work out a monthly debt load so you can determine a comfortable price range.

Here’s a good point to remember - The sales agent in the model home represents the builder, not you. They are known as a site agent and may claim to be a buyers agent, but they’re not. They still represent the builder and the listing agent. It’s our business to best represent your needs by being knowledgeable about the builder, quality, financing, pricing, even lot selection so that you get the best value for your money. If a site agent is representing 50 homes for the builder but they claim to represent you and will get you the best deal, do you think the builder will continue using this site agent for their other 49 homes? No! The builder is an investor and if the site agent interferes with their profits, they will replace that site agent. Remember, a buyer's agent is free and they know the market in your area.

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Like all tradesman, builders vary in their fields of expertise. For example there are builders who specialize in craftsmanship, others who are known for their innovative use of space, and those who offer below-market financing or customer attention during construction and after move-in.

Before making a final decision, it is wise to check out the reputation and financial strength of the builder. Get “spec sheets” on home features covering everything from floor plans to energy efficiency, including lot availability and delivery of your home.

• Learn as much as you can about the community

• Discover what amenities it has to offer

• Investigate if financial reserves have been set aside to build or replace major amenities like schools or community roads

• Find out from local land-use officials what else is planned or could be constructed in the area, especially where vacant land is applicable.

• Review the rules for the homeowners association, or find out if one will be set up (CC&R’s).

• Think of how you will be affected by commuting routes and times.

The less expensive the base price of the house is, the more options and upgrades you can add without fear of over pricing it for the neighborhood. Options are items the builder installs during constructions, such as adding usable space like a sunroom or a powder room. These features can add the most to the resale value of your home. Upgrading means selecting quality above “builder standards” such as carpeting, ceramics, detailing, kitchen fixtures and appliances.

Be sure to take advantage of builder incentives that offer free upgrades or credit off the sales price. Remember, you can add a deck, finished basement or landscaping later and sometimes for less money.

Often buyers don’t realize that there may be room for negotiating price, upgrades or options. For example, you have some scope for negotiating with the builder if he/she has a completed home that hasn’t sold yet. Also some “premium lots” are priced higher and are sometimes saved to be sold last. Keep in mind that typically, all lots cost the builder the same, so be sure to inquire about lot pricing. Builders may offer discounts or special financing to help close a sale.

When spelling out the particulars of an agreement with your builder, ensure you protect yourself by having safeguards written into the agreement, such as:

• Placing your deposit in escrow

• Detailing your upgrades

• Allowing you access to the construction site to check on progress

• A 30-day advance notice of the closing date

• An explanation of what the fine print means in the warranties of the builder and/or manufacturer

Some builders, especially in high-volume communities that place large numbers of loans, can offer special financing packages. However, because “home loan” lending is highly competitive, you have many financing choices other than those being offered by the builder. Shop around for everything, from rates to lender fees. Appraisals, inspections, surveys, attorneys and closing fees can vary as well.

Warning: Many sites offer their own lenders or a "Buyers Bonus" as an incentive to use their lender. By using only their lenders could mean only their fees and rates. Several won't let you use your own lender and will take away the "Buyers Bonus" if you do purchase the home. Although a buyer bonus sounds good, it could cost you thousands more over the life your loan.

- Are you really getting the best loan available? Find, Compare and Save - click here

Yes it’s new and typically it’s built with modern materials that are durable, low maintenance, stronger, quieter, and safer. But because nothing is perfect, even if it’s new, consider hiring a reputable, licensed home inspector. Then create a builder “punchlist”, from what you’ve learned to address any problems before closing. Consider budgeting for items to be modified or added later on.

Here’s a fact that you may not be aware of - Some builders have newly-constructed homes available for immediate delivery. Usually these homes are ready to move into within 30 days. Even if some builders are eager to sell, they’ll probably keep that knowledge to themselves.

• The community where new homes are being constructed is nearly complete, so the builder proceeds to have the on-site contractors build “spec” homes (homes built on speculation for sale) on the last lots

• The model home is for sale

• The contract on a home has fallen through

• Builders include constructing homes for immediate delivery for buyers who are relocating or who have sold their previous home and need one to move into quickly.

Immediate delivery homes may be more desirable as builders sometimes offer financing incentives or free options and/or upgrades. This is done to keep buyers from chopping the asking price and to keep other sales from failing due to unfair price changes.

Find A Free Buyer's Agent and See New Construction Homes

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Top 3 Ways To Save Thousands When Buying:

1. Find The Proper Loan - The #1 way to save money is by finding the loan that meets your particular needs and then shop it.

2. Avoid The Listing Agent - The listing agent represents the seller and has promised them the highest price and best deal. How can they get you a better deal? They Can't! 

3. Get The Right Inspections - Even a new construction home can have hidden issues. Avoid costly repairs by having a professional find them before you buy.

Today's Home Buyer will save you thousands by (1) helping you shop for the best loans available, (2) through tough negotiations on your behalf against the seller and their listing agent and (3) suggesting proper inspections to help prevent hidden or costly repairs.