A Step-by-Step Guide to Buying a Brand-New Home

New Construction: A Step-By-Step Guide To Buying A Brand-New Home

Purchasing a brand-new home is different than purchasing a previously-existing construct. With no previous owner, new construction lacks a seller with emotional ties to the structure, which means a shorter negotiation for you. Whether you are having a home built on spec in a new subdivision or designing your own custom home, the only person you’ll need to deal with is the builder.

Just like you would with a previously-owned home, you’ll need to know your budget and receive financing before deciding on the build. You must be pre-approved by a mortgage lender or bank before you start. Not only will you need to keep the cost of building in mind, but also smaller items such as maintenance, landscaping, furniture, insurance, and of course, property taxes. You don’t want to end up with a home that you can’t afford in a few years.

If you’re thinking about purchasing a newly-built home, these three steps will help guide you:

Step 1: Look at Both Sides of the Coin

Living in a brand-new home can be exciting. You can build to your own specifications and you’re the first person to use everything, so you can probably expect fewer problems. However, before you get caught up in granite counter tops and sparkling appliances, be sure that new construction appropriately fits your lifestyle. For example:.

Do you mind close neighbours? Construction in new developments tends to lack privacy.

Do you object to a commute? Building developments and other new construction are often built away from the lights of the city.

How important is a lawn? New developments require you to coax a lawn into being and trees planted won’t mature for another 20 years.

Step 2: Research Agents

When looking to buy a home in a newly constructed development, it can be a good idea to work with a buyer’s agent who understands the pros and cons of the area, can set up a time for you to tour the basic home, and guide you through the closing process. However, you must consider the following:

  • If you work strictly with a listing agent, know that they work for the builder and are looking to make a sale rather than help your family make a good decision.
  • If you hire your own agent, let them know up front that you want to look at new dwellings. Many states require him or her to go with you on your first visit in order to get a portion of the commission if you buy.

Step 3: Get a Warranty and Home Inspection

Once you’ve made the decision to buy, never sign a contract without writing in a mandatory home inspection by your own professional. A newly constructed home should never have defects. Municipal inspectors may look for code violations, but an independent professional will always be more thorough. It would be best to have the home inspected at each building phase in order to make problems easier to find. If a builder objects, that may be a bad sign.
After your new home passes inspection, buy the warranties necessary to protect yourself. While new homes must come with a warranty that covers defects in the structural integrity of the home, you should also ask for one that covers defects in craftsmanship for a year or more after your move-in date. Be sure that it’s backed by insurance.
The most important thing to remember when buying a newly-constructed home is to work with professionals who are on your side, not working explicitly for the builders.
Someone you hire is more likely to help you find the best place for your family instead of being motivated strictly by money.