When you think about purchasing a new construction home, you may assume this type of property comes with fewer problems than sometimes found in a previously owned home. However, that’s not always the case.
Builders cutting corners and unexpected additional costs are just a couple of the issues homeowners face when buying a new construction home. Negotiating the cost of a new construction home also looks much different than negotiating for a previously owned property.
Knowing how to navigate the steps of buying a new construction property will ensure a smoother homebuying experience. Secure a home that aligns perfectly with your preferences, needs and budget with these new construction buying tips.
New Construction Real Estate Agent
Before you begin speaking to builders and looking at floor plans, you should secure a new construction real estate agent. When you first meet with builders, they will be extremely friendly and excited to help you out. Resist the temptation to blindly go with their services and meet with a new construction real estate agent before making any lasting decisions.
Not only can a new construction real estate agent educate you on what to expect, but they can go to bat for you when negotiating with builders. This will help you get the best possible deal on your dream home. Having a professional on your side who knows the ins and outs of the new construction process is in your best interests.
More Like This: Working with a real estate professional who has experience in helping military members and Veterans may be in your best interest. Review the benefits of working with a Military Relocation Professional to determine if working with an MRP would be helpful to your home search.
New Construction Model Home
When touring model homes, remember they are designed to showcase all of the bells and whistles that could possibly come with your custom house. Builders do this to feature their best work and to entice buyers to fall in love with these homes.
It is likely that everything that comes with a model home would be an upgrade from a basic plan, which can be quite costly. The shiny features you see may be a mix of styles the builders do not typically package together, making it even more likely for buyers to want the most expensive combinations.
Appliances, landscaping, decks, patios, etc., may not come with the completed house, so make sure you figure those into the purchase price. Have your agent procure an itemized list of common features and upgrades as well as their costs. This way, you can go into the viewing with an understanding of what comes with a plan and what is considered “extra.”
The bottom line is that you need to be clear on what exactly you will receive with new construction and what it will cost. Prices can fluctuate between the time you ask and the time you sign, so be sure to check the numbers again before you lock in a contract.
If you can’t agree with the builder on what you want, be prepared to walk away and keep looking for a home that has what you need at a reasonable price.
Expert Tip: If you absolutely must have an upgrade that’s pricey, find out how much it would cost to have an outside contractor purchase and install it after the close of escrow. You might be able to save quite a bit of money!
Working With a Home Builder
Do your research before choosing your builder. Look for reviews and double-check with an experienced real estate agent for recommendations. As with any business, you are likely to find some great reviews and some less-than-ideal testimonials.
This is normal. It’s helpful to focus on the overall big picture you gather from reviews and agent opinions. Focusing solely on 1-2 positive or negative testimonials won’t give you the overarching truth of how that individual builder conducts business.
Questions to Ask a New Construction Builder
When buying an unfinished home, you must spell out in writing what will happen throughout the building process. Review the following top questions to ask a new construction builder, and have a conversation with your realtor before speaking to the builder about what expectations you should have regarding their answers.
- What is the estimated timeline for the project from beginning to end?
- What will happen if construction is not completed in time?
- What is the total cost of the entire project, including the indicated upgrades?
- How do you obtain the proper construction permits, and how do you handle inspections and approvals from the city?
- What is your process of handling any issues or problems with the home after construction is complete?
Your real estate agent may have more questions to add to the list above. Bringing your agent along when you’re speaking with your builder is often beneficial, as they can ask clarifying questions based on their experience and expertise.
New Construction Negotiation and Agreements
When you negotiate, you will find that it involves more bartering than bidding. The builder may not shift their price as an owner of an existing home would, but you can ask for a certain upgrade to be included in the cost they are quoting. You can also ask the builder to cover some of the closing costs associated with purchasing the new construction.
A real estate agent who is familiar with this kind of sale is going to be invaluable during the negotiation process. Ask your agent to get the builder’s warranty info early on in the and read it carefully. Then, incorporate any concerns you have into your offer documents. This will help address your worries from the get-go.
For example, builder delays can be frustrating and expensive for the buyer. Hotel and storage costs are just a few expenses that can add up if a builder does not complete a project on time. Spell out in your contract with the builder what will happen if there are delays. This will ensure you are not financially responsible for the consequences of an extended timeline.
New Construction Inspection
You should complete your own independent inspection with someone who does not have a relationship with the builder. Have the inspection done in two parts — before construction is completed and after the project is wrapped up.
Having an inspector look over the home before the project is 100% complete will make it easier for them to see potential problems. An inspection right after the project is completed will ensure that everything was done correctly and according to the agreed-upon specifications and standards.
Discover More Housing Resources With AHRN
Are you considering purchasing a previously owned home? Browse the large selection of homes near military installations at AHRN. You can also explore more military housing resources, where you can find expert-level advice, tips and guides regarding purchasing and renting a home.
DLA says
What a terrific article. I can say that I experienced nearly everything mentioned through my home buying and building process. I never had ANY idea how complicated things could get. It was a wild ride!
Kristen says
Thank you! The process can certainly be overwhelming if you’re new to it!
Jordan Baker says
I love your advice to get everything in writing. Nobody seems to sees the value in doing such a thing. But, it really does make a difference in the way that your home is taken care of. After all, it is evidence that you were promised certain things. The last thing that you want is to miss out on certain opportunities because you didn't have it in writing. https://www.thelionteam.com
Kristen says
Absolutely, Jordan! Getting things in writing protects both the buyer and the seller by making sure that expectations are clearly understand all the way around.
Andre Beluchi says
In a newly constructed home how will the homeowners insurance cover the home and what type of coverage would you get that will be different than that of an older home? I ask this because of an idea that my wife gave me about looking at the newly built homes around her parent’s neighborhood. Some of those homes are what got her interested because of the style that they were built like.
Kristen says
Andre – that question would be best to direct to your insurance company as there is a good bit of variance from policy to policy 🙂
Laila Keirstead says
I think that you should beware of the model home that they have, but you also have to understand that it is the model. They are supposed to be the most perfect. I think it would be nice if construction companies made the homes identical, but there is always going to be slight differences. to get the best idea of what the home is going to look like go to the other houses in the neighborhood. https://www.goldwingconstruction.com
Kristen says
absolutely!
Veronica Marks says
I really appreciate the tips about working with your builder. I didn't realize that you can negotiate price with a builder. We are considering having a dock constructed on our property. I know it's not the same as a home, but I think the tips on dealing with a builder and contractor are fairly similar.
Kristen says
I think a contractor would be a very similar process!
Lauren Woodley says
Thank you for all of the helpful home building tips. Specifically, you talk about how it's important to do research on any potential builder, and I completely agree. You want to ensure whoever you hire is trusted and qualified for the job so that your house ends up being built correctly and with quality. Overall, being careful right from the beginning will ensure that you get the dream home that you've always wanted. Thank you for sharing!
Kristen says
You’re very welcome, Lauren!
Frank Kelly says
Really great advice. It’s so important to make sure you get referrals BEFORE you decide on a builder. So many skip this step and end up regretting their choice in the end.
Kristen says
Absolutely, it’s vital to do an a through check!
Elden Gatley says
I agree that you should get everything in writing. Otherwise, you could potentially lose the deal on your home. That or you'll lose lots of money.
Kristen says
Definitely! It’s worth investing the time and effort to protect yourself.
Kristen says
I’m glad you found it useful, Dianaa!
Kristen says
Great advice!
Silas Knight says
You have some great advice here for finding a home. Falling for the "model" is something that many people get tricked by. It is also really important to get the entire thing in writing, like you said.
Kristen says
Great point, Silas!
Kristen says
Budget is always a consideration – but the investment in a good contractor should pay off with improved durability and quality.
Kristen says
You’re welcome, Eamon
Jorge McMillan says
My wife and I are new home buyers and we are trying to figure out what to look for in a good home. I appreciate you pointing out to beware the model home simply because it won’t be built like that. We will be sure to be realistic about it and make sure that we like the design of the home and that it fits our budget.
larissa says
This is so incredibly useful to the buyers of a new home! Often, I feel like there is not enough information out there for a buyer interested in a new home. There is a lot that goes into new home construction and you definitely need to be properly informed and aware of all the changes that could arise. Thanks so much for sharing so much information with in depth details and great examples!
Christina says
Your warnings to get it all in writing, have an independent inspector, and understand what will happen in case there are delays are all valid points. These tips could prove very useful for someone creating their ideal home construction.
Kaitlyn says
This article is spot-on! It’s so easy to fall in love with the model. Getting everything in writing is key.
Kristen says
It’s so important, Kaitlyn!
Morton Stones says
Definitely get things in writing! Great tip.
Annika Larson says
My husband and I are looking at purchasing a brand new home. As you said, I think it will be important for us to have a realtor to help us through this new experience. Working with and researching potential builders is super important in making the process an enjoyable journey. We will make sure to keep all these tips in mind. Thanks for sharing!
Taylor Hicken says
I agree, delays could be pretty expensive or frustrating for people. I remember talking to my friend when she was in the middle of building her home, I think she had some of those issues. I’m hoping that I’ll be able to find a contractor soon, that way we can start planning to build.
Larry Weaver says
Thanks for the tip to have an agent that knows what kind of sale you have when meeting with a builder for negotiation. I could imagine that working with residential community builders could be pretty important as well. My wife and I decided that we would like to start looking for a new home, so we’ll have to remember finding the right agent before moving forward.
Ashley Maxwell says
Thanks for your comment about how you should try and get to know your contractor so that you can be sure that positive reviews are true and that you can discuss what your expectations are. I like how you said that you should be sure to get a contract and insurance so that everything is done legally and safely. My husband and I are looking for home construction that is safe and reliable as we begin to plan moving out of our house.
Ashley Turns says
My husband and I are planning a home construction soon and we are wondering how to work with the builder we end up hiring. So I appreciate your tip to make sure that everything (from if delays happen to how an inspection might be performed) is written in the contract. We will definitely have to make sure that everything is written in a contract before we end up hiring a home construction service.
Elsa Anderson says
I do agree that purchasing a brand new home is quite a unique experience which is why having a guide would be significantly helpful. That said, I would be sure to find the best real estate agent and contractor to help me with my new home project. Being able to find or build my perfect home will be a dream come true. Thanks!
Alexandria Martinez says
A good friend of mine called me the other day to ask how to search for a new home builder. She was interested in getting some insights since her family is not sure if this is the right move for them. I will let her know that she should get it all in writing.
L2 Construction says
Very informative blog!!! Thanks for sharing this blog. I really enjoy reading this blog.
Candice Eisenhower says
I agree that we should find an expert in picking newly constructed homes of our choice where we’ll benefit the most, specifically realtors because of their extensive background in choosing good quality constructed homes that fits your taste and budget. It makes sense because they are the ones who are exposed to the field of real estate and will likely give you better choices without making too much effort in figuring them out yourselves. I’ll keep this in mind the moment that I’m able to save up to buy a new home for myself.
Penelope Smith says
This is some really good information about the home building. My parents have been thinking about building a new home. I liked that you pointed out that it would be smart to get everything down in writing before starting the project. That does seem like a great way for them to be on the same page as the contractor.
Lutech Engineering says
To be honest, I searched in several places regarding buying a new home and I think my hunts ends here. This post explains some vital thing regarding this topic which I was looking for. Thanks for this lovely post! Will keep visiting in future to keep myself updated with latest things…!!!
Camille Devaux says
My sister is thinking about getting a new construction service. She wants to look into getting a contractor to start working on a new home. It might be helpful for her to know that checking the reviews of this person might make them easier to pick.
Ellie Davis says
Thank you for pointing out that you should make sure and do research on your builder. My husband and I are wanting to find the best contractor to help us build our dream home. I’ll have to do some research and find the best home contractor in the area.
Jolly says
Very Nice article!
I think everyone should Know this type of information. I would definitely share this post on my social wall
Jacob says
A good contractor will take your suggestions in building the perfect home for you.
jacob says
Great
Neil Dimapilis says
thank you for sharing this amazing and insightful article with us! Appreciate this so much!
Jenna Hunter says
It think it was interesting that you said to do your research about the builder and the house. If I build a house I want to be sure that it is structurally sound. I also want to make sure that it is done well for the best quality of house.
Patrick North says
That’s absolutely true. I have seen people save money in all sorts of planning. Some save in quality and some leave out a part of construction just to save money. Thus, their home isn’t so beautiful to see…
Angela Waterford says
I suppose that I should get all things in writing once I agree to buy a new home for sale. It would be ideal if I meet with the real estate agent who is selling the property so that I can assess if the home is well-built. Thanks for pointing out that I should be prepared to walk away if things don’t go as planned, so I’ll make sure to look out for things before I buy that home.
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Jimmy Evans says
I loved your post as it’s quite useful and informative for people who are planning to buy a new house. I was thinking of buying a new house for quite a long time, but nothing was getting finalized. I do agree that purchasing a brand-new home is quite a unique experience which is why having a guide would be very helpful. I’m sure your article is going to help me out as well. Thanks for sharing this great post.
williamanderson says
You have provided the all information before buying a new home. amazing content thanks for sharing