5 Tips for Buying New Construction Homes
Thinking about buying a new construction home? It’s a great way to go when the existing home market is hot! New construction often gets you what you want and the competition is often less fierce. Before venturing down that path, here are five essential tips to help you make the best decision and get the most out of your investment.
1. Don’t Skip the Realtor
Even in new construction, having a realtor is crucial. Many buyers assume that since they’re dealing directly with a builder, they can skip the realtor and save on commissions. However, a knowledgeable realtor can negotiate on your behalf, ensuring you get the best deal possible, whether it be in price reductions or home upgrades. Remember, the builder’s agent is representing the seller and is not working in your best interest. Best practice before touring new construction model homes is to inform your agent (hopefully us!). They will either join you or give the builder’s representative the heads up. This ensures that the builder will respect your agent relationship.
2. Prioritize Inspections
Just because a home is newly built doesn’t mean it’s free from issues. Always schedule an independent inspection. Just because something passes permitting doesn’t mean it’s built to the highest standards. A qualified inspector can catch potential problems that could cost you later. For a deeper understanding, check out StructureTech Inspection’s informative video on common new construction home defects.
3. Explore Financing Incentives
Many builders offer financing incentives that can significantly lower your overall costs. This might include discounts on closing costs if you use their preferred lender or title company. It’s worth investigating these options to see how much you can save when financing your new home.
4. Factor in Overlooked Costs
It’s true, when you have a new home, everything is brand new and you should not have to do any initial maintenance! What buyers often overlook is that the home does not come with gutters, window treatments, a water softener, washer or dryer (and sometimes refrigerator), and depending on the builder and the city, there might be no landscaping or trees. All these things can easily add up to $10,000-$15,000 that you will expect to pay after purchasing the home if those items are not negotiated or added into the purchase agreement.
5. Weigh the Benefits of Spec Homes
If you're looking for greater flexibility in negotiations, consider spec homes. These are homes that are already built or nearly completed, giving you a clearer picture of what you’re buying. Spec homes often come with greater incentives and room for negotiation compared to homes that are still under construction. Just remember, if you’re opting for a fully customized new build, be prepared for a timeline of 6-12 months and higher earnest money requirements.
Buying new construction can be a rewarding experience if you approach it with the right tools and knowledge. By leveraging these tips, you’ll be better prepared to navigate the process and find the perfect home for you. Happy house hunting!