Buying a new construction home isn’t quite the same as buying a pre-owned home. There’s quite a bit that you have to consider even before you get to the stage where you’re picking out flooring and kitchen cabinets, as well as a lot of ducks that you’ve got to get in a row to ensure that you’re making a smart investment. If you’ve already weighed out the pros and cons of buying a new construction home though and are sure that you want to move forward, then it’s just a matter of following the necessary steps in between making your decision and turning your key in the front door. So what are those steps? Here are six of the ones you’ll need to get through.
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Research Builders and Locations
People usually go about buying a new construction home in one of two ways: either they have a builder they like and go to the location where they’re developing, or they have a location they like and find a builder who’s developing in that area. Either way, it’s important that you optimize both of these factors so that you end up with a house you love.
A good first place to start is by bringing on a real estate agent. Realtors aren’t necessary for buying a new construction home, but they are almost always warranted. In addition to advocating for your interests throughout the purchasing stage, a realtor can help guide you toward both builders and locations that appropriately suit your needs.
The key to being happy with your new home starts here. Don’t settle for a location that you don’t want to live in just because that’s where a certain builder is operating. Likewise, don’t work a builder who doesn’t have a proven background of quality, consistency, and reliability. You’ll find what you’re looking for eventually, so resist the urge to rush through this step and don’t move on until both your home site and your home builder meet your expectations.
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Get Your Financing In Order
Just like when you’re buying a pre-owned home you’ll want to enter the market with as accurate of an idea as possible of what you’re working with in terms of finances. This will help you set your budget and figure out what you can afford, and will also move you through the process of buying a new construction home with a lot more ease.
Depending on your income and current debt status, a lender may require that you sell your current property before they’ll provide you with a pre-approval for your new construction home (more on that in the next step). As such, it’s usually a good idea to talk to a financial advisor or mortgage broker at this stage to see what your best options are.
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Figure Out Your In-Between Living Situation
One of the unique features of buying a new construction home is that you’re almost always going to have a gap in between when you sell your current home and when you move in to your new one (assuming you have a home to sell). Waiting to sell until the last minute is risky, while selling before your builders even get to work means that you’ll have to find a new living situation for the next six months or more. Some builders will let you write in a contingency in your contract that allows you to back out if the sale of your home fails to go through, but not all of them (remember: this home is being built for you; builders are reluctant to build homes that they then have to try to sell to someone else).
Work with your real estate agent to ensure you list your home at the optimal time, as well as to figure out where you should live in the months your home is being built. There are a lot of options out there for temporary housing, including short or month-to-month leases, sublets, and extended stay hotels.
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Find Out What’s Included
You’ll have the opportunity to ask a lot of questions before you sign on the dotted line for your new construction home. Take this time to get all of your questions answered so that you’re not hit with any surprises later on.
Some of the questions that you’ll want to ask include:
- Are there HOA or other neighborhood fees?
- What are the expected closing costs?
- Is landscaping included?
- Are there any rules around what I can and cannot put and/or do in my yard?
- What is the timeline for this development?
- What warranties are offered on the home?
- What are the property taxes in the area?
The more questions you ask at this stage the better. While you’re going through the previous steps, keep a list of questions that you add to as they come up—that way you won’t forget something key when you’re finally sitting down with the builder’s sales agent.
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Make a Lot of Decisions
This step is usually the most fun for people who are buying a new construction home, but it can also be incredibly stressful. The decisions you make at this point are going to have a big impact on the look and utility of your home, as well as its final purchase price and future sale price. It’s important that you make decisions that are in line with your wants and needs, as well as decisions that don’t stretch your budget too thin.
As for what decisions you’ll be making, they run the gamut from the structure of your home to what’s in the walls to aesthetic features. These include:
- Exterior detailing
- Bump-out additions
- Extra windows and window placement
- Structural additions like decks and fireplaces
- Electrical placement (lighting and outlets)
- Kitchen design (counter tops, cabinets, appliances, etc.)
- Flooring
- Ceiling height
- Building materials
- Interior and exterior upgrades
- Smart home features
- Fixtures
Whew, that’s a lot, and you haven’t even gotten to home decorating yet!
This step takes place with your builder’s design expert or team, and is usually split up over several sessions since it can be hard to make all of these decisions at once. Note that you’re not going to know how everything looks together until your house is complete. You need to make these decisions carefully and with a vision for what you’re trying to achieve. Take your time, weigh your options, and be decisive—there’s no going back once you’ve made your choices.
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Wait It Out
For all of the hard work (and endless paperwork) that goes in to the previous steps, this one might be the hardest. Depending on the size of your home, the time of year it’s being built, and the developer’s job load, you may be waiting at least six months or more for your new construction home to be complete. That’s a short time compared to how long you’ll probably be in your home, but a long time when all you want to do is settle in.
During this stage, you’ll have a few opportunities to come meet with the foreman overseeing your build and to walk around the property. This usually happens after framing is done, after main systems are in place, and when it’s time for a final walkthrough. Ask the site’s sales agent about rules for visiting the home on your own. Because of liability and the potential dangers of an active construction site, you may not be able to go in the home before it’s complete or at certain stages—or you may need permission and a chaperone to step inside. Find out what’s expected and what’s required so there’s no need to guess.
As for the rest of the time during this period, you’ll just have to be patient. And while even six months can seem like forever when you’re waiting for your home to be built, keep in mind that with something as major as a home build rapid isn’t usually the way to go.
Looking for more new construction advice? Check out our articles on cool features to consider when building a new construction home and upgrades that are worth the money.
Sources: moving.com
Picture sources: Unsplash.com
