Complete Guide To Buying a New Construction Home

When it comes to finding that perfect place to call home, you want to find something that checks all your boxes. One way to do that is to painstakingly search through the dozens of real estate listings, touring homes until you find the one that feels right for you and your family. A much simpler way to get exactly what you’re looking for is to build a home perfectly suited to your needs and expectations! 

New construction homes come in all shapes and sizes, and builders often collaborate with prospective homebuyers to create a space they will feel comfortable calling home. The benefit of building a brand new home is that you get a say in all the features, you work alongside the contractor to pick out materials, fixtures, and appliances to design your dream home

If you’re looking for your Forever Home, the best way to truly get everything you’ve ever dreamed of is to build it yourself. Read on to discover more about the process involved with buying a new construction home. 

What’s involved in the process of purchasing a new construction home? 

There are basically two options when it comes to finding a new home: purchasing a pre-existing home or building a new home. Surprisingly, both options have a lot of similarities; both require an agent of some sort to assist in the process, lawyers to sign off on the paperwork, and lots of research. There are, of course, many differences between the two types of purchases. Building a new home allows for much more creativity and input on your end as to what the home will include, the style you prefer, and the layout of the house. This entails a much more involved process than selecting a home from the collection among the listings. The following is a guide to the steps involved in purchasing a new construction home.

1. Hire an agent. The first thing you’ll need to do when you’re buying a new construction home is to find the right real estate agent. You’ll want to find someone who is comfortable and familiar with new builds and who is compatible with you, someone who will do their best to get you exactly what you’re looking for. When you have a qualified agent on your side, you’ll get access to their many contacts, and you’ll be able to ask them for advice and recommendations on materials and suppliers. This will make the building process a smooth and enjoyable experience! 

2. Research suitable lenders. When you apply for a mortgage, you’ll want a particular type of loan ideal for construction projects. The difference between a traditional mortgage and a construction loan is that the latter is released in segments or draws throughout the building process. In contrast, a conventional loan is released all at once. You’ll need to do some research and find a lender who deals in these types of loans. 

3. Interview builders. Not all builders are the same or offer the same services. Take your time and do some research to find a company that will be able to provide the same services you’re looking for. Be sure to check out reviews from past clients and look into which vendors or suppliers they partner with. Some builders will want you to work with their connections exclusively, and some will be more flexible, allowing you to bring in your own sources for materials or appliances.  

4. Check out the home site. Once you settle on a location, you’ll want to explore your new neighborhood a little. Find some time to come see the project site, check on the progress of your house, and scope out the surrounding area. Learn a little bit about the nearby amenities and facilities, figure out where you’ll be doing your grocery shopping, and look into the local school system if you have young ones at home. 

5. Begin designing. The best part about building a brand new home is that you get to incorporate your style into the design process. You’ll get to choose a home that will suit your specific lifestyle, select the type of floors, the fixtures, and the appliances. So many options can seem overwhelming, but this is the stage that you can have the most fun during the whole process! 

6. Select your standard features. When you’re building a house, there are several items that are considered standard. These include the floors, paint colors, cabinetry, countertops, light fixtures, tiling, and windows. These are things that every house needs and you can even save some money on these features. Don’t turn your nose up at faux wood floors or generic cabinets, particularly if you’re on a budget. There are some really fantastic options that look just as good as the expensive name-brand items. 

7. Choose what you wish to upgrade. There’s nothing wrong with splurging on a few items here and there. If you factor it into your budget, you can afford to spend a little extra on certain features. If you’ve had your eye on fancy faucets for the sinks or statement light fixtures, make room for them in your budget. This is going to be your home, after all, it’s okay to enjoy it! 

8. Get a home inspection. Even a brand new house needs to pass inspections. Throughout the building phase, various inspections will need to be completed. These inspections will ensure your home is safe, reliable, and up to code. Your contractor will likely have a checklist along the way of the various inspections your home will need to pass in order for you to take ownership. 

9. The final stages of the build: Interim and Final Occupancy. When you’re home is unbelievably close to being yours for good, you’ll go through what’s called an Interim Occupancy. This means it’s time to take care of any outstanding deposits, payments, and fees. Before you can take ownership of the house, you need to settle any debts with your builder. Once that’s finished, you’ll enter the Final Occupancy stage. This is when you officially take ownership of your beautiful new home, your construction loan is transferred to your official mortgage, and your builder can finally sign the house over to your name! 

10. It’s time to move in! The most exciting part, the most anticipated part of the building process, is when you finally get to move in! At this point, you’ve signed all the paperwork, you’ve paid the contractors, and the last thing you need to take care of is settling into your brand new home! 

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What are some questions you should ask before settling on a builder? 

The process of purchasing a new construction home can be intimidating and it’s completely normal to be a little unsure of what you should be looking for in a builder. If this is your first experience with building a house, we’ve compiled a handy list of questions you might want to ask before you make any decisions. 

How long is the building process? You’ll want to get a timeframe from your builder, especially if you have a current lease to work around or need to plan the selling of your current home to line up with moving into your brand new home. Be sure to ask if the timeline includes the process of acquiring the necessary building permits. 

Are lot costs included? If you’re picking from a model home, you may just be looking at the base cost, which includes the interior and exterior features of a home. If the lots vary in size, larger lots may add a great deal to the cost of your home while smaller lots may save you some money. 

Is landscaping included? Some builders offer basic landscaping services and some leave it up to you to hire a landscaping company. You’ll want to know what you can expect with your finished home, and what extra costs you’ll need to factor into your budget. 

What are the standard finishes? It’s important to understand what you’re choosing from a builder. Some will present a very basic model and others present the top-of-the-line features including state-of-the-art appliances, the finest quality flooring, and luxury countertops. Inquire about the standard finishes and find out where you might need to stretch your budget. 

Can you bring in your own appliances? For some people, it’s a great money-saver to find and purchase their own appliances, as what the builder has to offer isn’t always the most cost-efficient option. If you prefer to find your own appliances and fixtures, you’ll definitely want to ask your builder if this is allowed under their contract, as some companies partner with certain vendors and include their features in the building process. 

Is it possible to save money during the home-building process? 

It may come as a surprise, but building a new home can end up saving you money over purchasing a pre-existing home. When you purchase an established home, you’re bound to run into repairs and costly maintenance that come with the average wear and tear of a house. If you’re looking long-term, a freshly built home shouldn’t cost you an arm and a leg in repairs, your appliances will all be brand new, and you won’t have to worry about costly renovations. As for the rest of the expenses, here’s a list of tips and tricks to keep expenses down during the home-building process: 

Stick to your budget. Before you even sit down with a builder, you’re going to need to know what kind of budget you can afford. You can sit down with a financial advisor to figure out how much you can spend on this new home and plan the building process around that. As you’re meeting with builders and looking into appliances, keep your budget on hand and be very strict with it. Find out where you can splurge and where you need to scale back. 

Find the right builder. This is an incredibly important part of the building process. You’re going to want to find a company that is willing to work with you, provide exactly what you envision for your dream home, and fit it into your budget. Do your research, read the reviews, and compare quality as well as cost. 

Look into closing cost incentives. Many building companies offer closing incentives when you go with their preferred lenders. If you choose to use their partnered appliance company, they may knock off a couple of thousand dollars of the closing cost. Each company is different, so it’s best to ask about this upfront. 

Can you do it yourself? If you’re a handy person and are willing to put in the time and effort, DIY projects are a great way to save on a house. When you work with a flexible builder, there’s plenty of opportunities for you to take care of certain projects yourself. Whether that’s tiling the bathroom on your own, installing the electrical or plumbing if you have such skills, or painting the rooms, there are so many opportunities to get in there and do it yourself. 

Research a variety of appliances. If your builder allows you to source your own appliances, you can save a lot of money with the proper research. You can search around to find a good deal, buy used, and find exactly what will suit your home. Keep in mind, you can always buy the very basics, to begin with, and upgrade later on. 

Go green. A great way to save money, in the long run, is to purchase energy-efficient appliances and utilities. There are so many fantastic options to consider, as more and more companies are offering eco-friendly, green products. It may seem like the pricier option initially, but these features will save you big money down the road. 

There is so much to consider when you’re building a new home, it can be a little daunting. But with the proper research and knowledge, the process can be smooth and even enjoyable! Allow yourself to get swept up in the excitement of a brand new home, just remember to stick to your budget and you’ll end up with a fabulous new place to call home.