For first-time homebuyers, building your own home can offer excellent advantages. You don’t have to worry about typical resale issues like painting, scratched floors, or having to cover up distasteful DIY repairs done by the previous owner. If you’ve decided building your first home is the path for you, check out the items below that will help you reach the end of the process smoothly.
Choose what sort of construction home you would like
Custom-built homes: these result from a collaboration between you and your builder. It is designed just for you, without a walk-trhough, and is typically more expensive.
Semi-custom homes: these start from a plan and a model home walk-through, though you can have it customized. You will have to pay a little more and wait a little longer with these.
Production homes: these have fixed plans. After touring the model home, you’ll know exactly what to expect, without having to customize it if you don’t want to. These offer the lowest prices and quickest delivery.
Hire a realtor with construction experience
Developers often have sales reps on location, leading borrowers to think they don’t need a real estate agent, even though purchasing a new construction is much different than buying a resale home. We would be happy to put you in contact with a lender and realtor who are both well-versed in the world of construction and who would help walk you through the process!
Scope out the neighborhood
Visit build sites at different times of the day. Neighborhoods may look different during the work week than the do on the weekends. Try contacting local licensing boards to get an idea of other developments planned for the area.
Get it all done sooner rather than later
Your best chances for a deal is early on, when developers test market interest with first release properties. Prices may rise and be non-negotiable after that period of time.
Location, location, location
If you’re not building on a lot of your own, you’ll want to see out a new construction unit near the center of the proposed development. If you have considered townhouses, choose an end unit.
Pass on the model home
Unless there is an incredible discount, don’t go for the model home. They are usually sat at the top of busy streets to attract drive-by shoppers. They are often loaded with high-end finishes, adding to the price.
Timing is everything
If you’re not working with a private-builder, chances are your developer is likely part of a publicly-traded company and needs to hit regular sales goals, which means the company may be inclined to make a deal toward the end of the month. Deals can fall through as well, make sure to tell your Realtor to look out for opportunities that arise if another buyer falls through.
Keep the sun in mind
When you start the development plans of your house, make sure to take advantage of natural light; the sun rises in the east and sets in the west.
Have a lawyer on call to review all your contracts; instead of standardized contracts, many builders use custom ones that are developer-friendly, having a lawyer who is preferably one who is well-versed in new contracts will help in the long run.
Negotiate your closing costs
Knowing what’s important to you and determining what a developer might want to be flexible on are two good reasons to have an agent with new construction experience on your side. Builders won’t want to be a disadvantage when dealing with buyers, which will make them resistant to negotiate price. But they may be willing to cover closing costs to seal the deal.
Don’t forget about warranties
Because new construction can sometimes be rushed and problems might not be visible when you first move in, you’ll need warranty. Most cover a new home’s material and workmanship for one or two years. Coverage can last ten years or more, depending on the structural elements, like roofing, garage doors, HVAC, plumbing and electrical. Your lawyer can look over things like this and make sure to always ask for the manufacturer’s warranties for installed appliances.
Don’t forget to carefully review the Homeowner Association bylaws - they can keep you from painting your front door bright blue, plating a big tree out front, or even having a pet. There are some bylaws that even dictate which window treatments are allowed. Double check what your HOA insurance covers and when the fees are due - some costs may not transfer from builder to owner until a certain percentage of the project is sold.
Inspection, inspection, inspection
With a new construction project, you’ll want THREE inspections. The first ensures the site has been excavated and graded correctly. The second inspection takes place after the frame and roof are in place. The final one will make sure the home is safe and up to code - this is similar to inspections done on any resale property.
Choosing the right lender and getting pre-approved
If a development is in high demand, priority may go to first-time buyers who are pre-approved, make sure to discuss that with your lender up front. Also, pay attention to interest rates and see out one of our amazing loan officers who is experienced in new construction loans and can meet strict deadlines.
We are here to help you through the entire process and will make sure you end up with a beautifully built new home!