Purchase the Newly-Built Home of Your Dreams In Five Easy Steps
Buying new home construction can differ greatly from purchasing a previously lived-in dwelling. While buying an already-established home entails working with prior owners, those interested in newly-constructed properties will be dealing directly with the builder. This can actually work to your benefit, as many owners increase their selling price based on an emotional response to all the great memories created in their home.
However, other more practical concerns will also play a significant role. These include things like setting up financing and establishing a realistic budget, as well as acquiring pre-approval from a bank or other financial entity. Buyers must also consider less obvious expenses related to property taxes and maintenance costs, which can add up quickly. Failure to evaluate each detail on its own may result in a much higher final cost than initially expected.
Because the overall process can be quite challenging, those interested in purchasing newly-built homes often require a bit of guidance throughout. Accordingly, the following steps can help buyers maneuver through the many complex aspects of purchasing new home construction, thereby ensuring they are completely satisfied with the finished product.
- Determine Whether New Home Construction is Right for You
The first step to determining whether new home construction is right for you requires knowing your options. Though new home construction may seem cut and dry at first glance, there are actually quite a few variations on the way your new property will be built and designed. Knowing the difference between the types of new home construction will help you determine the risks and benefits of each. In general, newly-constructed homes are typically available in one of the three following ways:
- Having a home custom designed and built to your exact specifications
- Choosing from a number of available features when a home is part of a development
- Selecting a home ‘built on spec’, i.e. a home that is has already been built and is ready to buy
While procuring newly-built homes can be extremely appealing, this sort of living may not be for everyone. That’s why it’s important to determine whether the above options will fit easily into your lifestyle. For instance, housing developments tend to be rather snug when it comes to home placement, which can then lead to some privacy issues. Also, many newly-constructed homes are placed in areas far outside the city. This can increase the length of work commutes a great deal, leading to an inconvenient situation for many buyers.
Unlike purchasing a previously-owned home, new construction buyers will be responsible for creating the home of their dreams from scratch. Consider something as basic lawn care; inhabitants of new property will be tasked with seeding their lawns, planting saplings, and other lengthy pursuits that are not a factor for other home buyers. These tasks will take years of hard work and dedication, which may not be feasible for every buyer. To this end, purchasing a newly-built home requires an investment of both time and money.
- Do Your Research
Extensive research on many different aspects of new home construction is greatly encouraged for potential buyers. One area that must be investigated is the previous working reputation of the builder. This often entails a bit of legwork to get a truly accurate picture.
Buyers should first check the Better Business Bureau to be aware of any complaints regarding a builder’s work history. You can also visit other properties constructed by the builder to speak with inhabitants about their satisfaction with the dwelling. This can be particularly enlightening when it comes to how well the home has stood up under common wear and tear.
Buyers must also research the area surrounding a property. You can often glean quite a bit of information by just taking a walk around the community. A more thorough approach involves visiting the city planning office to see what sort of developments may occur in the future. These factors will all play essential roles in a home’s resale value, which can be important for many buyers looking forward. Additionally, buyers should also look into the following when researching a prospective neighborhood:
- Be aware of the rules and regulations of the local Homeowners Association (HOA). Many HOAs are notorious for being exceedingly strict when it comes to property owners. Something as simple as exterior paint color may incur the wrath of a stringent HOA. Accordingly, homeowners may be privy to penalties and fees if they breach an established rule, which can get quite expensive.
- Look into available cable and internet companies in the area. Some services may be unavailable to a chosen area even if you are eligible. This can also help you find the best deals from available providers, resulting in reduced monthly utility bills.
- Read up on existing zoning laws within the city. This will afford you an idea of what types of renovations can be made to your property. Because zoning laws can often change without notice, it’s also recommended that you stay up-to-date on the most recent revisions.
- Know the Difference Between Standard and Add-On Features
When it comes to purchasing new home construction, all buyers must be keenly aware of which features are standard and which will incur an additional fee. This is vital to establishing a realistic working budget, while making certain that price doesn’t increase exponentially at the close of the deal. Many builders will afford a feature sheet complete with prices, and buyers are encouraged to go over these listings in great detail.
While upgraded features can be highly enticing, it’s important for buyers to stick with those upgrades that will benefit them most. Buyers can also consider having upgrades completed by a company separate from the original builder. In many cases, builder upgrades entail exorbitant markups because the cost for labor and parts is extremely low on their end.
You can also ask for upgrades to be included at a reduced price when negotiating over the final cost of a newly-built home. This is often far more appealing to a builder, who may be reluctant to back away from their original selling price. Effective negotiating may result in you getting those enticing upgrades at a better price, or even free in some cases.
- Insist On Thorough Home Inspections and Warranties
Home inspection and warranties serve as a means of protecting the buyer in the event that a home isn’t exactly up to par. This is particularly true when it comes to the inspection process, which many buyers erroneously believe to be unnecessary. While builders must pass inspections to receive permits, these instances are not enough to afford a potential buyer complete confidence regarding a new property.
A newly-built home can have just as many problems as a previously established dwelling, which is why an independent inspection is so important. While code inspections will certainly take place, these often fall short of professional inspections when it comes to identifying issues and concerns within a home. Independent inspections should factor in to any contracts or agreements, with language relating to what will occur if a home is not up to code.
Buyers must ask for the builder’s warranty up front to determine whether it offers sufficient coverage. This includes what is and isn’t covered, as well as the duration of terms. Buyers should also be privy to manufacturer warranties related to appliances within the home, which will not be included in the builder’s warranty. For truly comprehensive protection, warranties should include insurance backing.
- Compare Lenders Before Closing the Deal
Securing the right lender is a vital part of the buying process, and one that shouldn’t be taken lightly. Many new home buyers may opt to use the builder’s preferred lender simply out of convenience, but this can result in a much higher cost overall. In most cases, buyers should seek financing options outside of what is offered by the builder, and compare these options thoroughly to ensure they are receiving the best deal possible.
Because owning a home is such a long-term investment, fully understanding mortgage language is of the utmost importance. If anything is unclear or vague, buyers should contact the appropriate parties for clarification. Additionally, there are often funding programs available for first-time buyers, which can afford more reasonable costs when it comes to financing.
No matter what option you ultimately choose, you must remain fully aware of all that a prospective mortgage entails to make a truly informed decision. If you find yourself in over your head, consider hiring an attorney to help you sort through the contract language. Professional assistance can provide a deeper understanding of what you are signing up for, which is essential for receiving a fair deal.
On the Road to the Home of Your Dreams
From the seemingly endless negotiations to painstakingly reviewing contracts and agreements, purchasing a home is difficult even under the best of circumstances. These difficulties can be amplified when buying newly-constructed homes, which often include many additional considerations throughout the buying process.
Fortunately, the above tips can help virtually all new home buyers successfully navigate the process to procure the brand new home of their dreams. While the road may be long, the many rewards associated with home ownership make the journey more than worth it.