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A First-Time Homebuyer’s New Construction Guide

The most common definition of a newly constructed home is one that was built recently and is without owners. This includes homes that are built to build a custom home or homes that are constructed by developers or builders at their own discretion and then sold for the very first time.

For a first-time homebuyer a home built from scratch offers attractive options, like an affordable home that has a high-quality contemporary design located on land that you own. However, the process of buying new-construction homes from builders is a bit different from the typical homeowner-to-homeowner transaction. Understanding the distinctions can help to determine what you are most concerned about the most when making a first home purchase, especially if anticipate changing your housing needs in the next few years.

Key Takeaways

  • Homebuyers who are first-time buyers may opt for an unbuilt home due to the fact that they are looking for a low-maintenance lifestyle or the chance to personalize.
  • First-time homebuyers must be prepared for a brand new construction house to be more costly than resales homes in the vicinity and for loan closing to take a bit longer.
  • If you are buying a brand new home, be sure to make sure you don’t miss the inspection of your home to make sure that the builder is able to deliver the promises they made.

 

What Is a New-Construction Home?

A newly constructed home is a property that was built recently and isn’t used or owned by any other person. The properties are sold a variety of ways, ranging from being customized on the land you bought separately, to being constructed in the entire neighborhood of the developer which is then sold in individual parcels to the homeowners.

When you buy a new construction property typically, you’ll be working with a builder’s sales team or a developer’s representative. Be aware that you can also engage an expert real estate agent who can represent you when making a new construction purchase, even if it isn’t necessary.

For a new construction purchase it is usually necessary to secure financing. Work with your lender to have the property appraised. Also, take the time to read through the contracts you signed for purchase to ensure you are aware of what you’re getting for your money.

But, unlike the homes that have been built before it is possible that your house will being constructed, which means you could also be able to modify or make a few design changes in the course of the purchase process. In addition, once the house is completed, you’ll have the option of bringing an inspector to inspect the property prior closing to make sure that the home is built to the requirements of a strong and secure home construction.

 

Pros and Cons of New-Construction Homes

Pros

  • In most cases, it won’t be necessary to make major repairs for many years
  • Options for customization may be available.
  • An insight into the future neighborhood

Cons

  • Sometimes, the price will be higher.
  • Potential for problems in the use of materials and techniques
  • A lack of an agent can be a disadvantage

Pros Explained

  • Most likely, you won’t require major repairs for a long time low maintenance is among the primary advantages for new homes. Since many components within a home can endure for decades without requiring major repairs or replacing, you might have very low maintenance expenses for over 10 years, particularly in the event that your builder offers warranties on the various equipment.
  • Options for customization are an option Builders who are who are selling houses that’re not fully completed may give you an option of countertop materials or some basic floor plans. These options may aid buyers in finding the perfect layout or material to the house they are purchasing.
  • An insight into the upcoming neighborhood Developers who is planning to build a number of homes in the same neighborhood and you are interested in community amenities like walking trails or water features. Developers can discuss these details with you throughout the selling process.

Cons Explained

  • There are times when may be accompanied by a higher A new home is more expensive in a variety of areas than older homes. It is possible to pay a significant amount for a brand new home as opposed to, for instance an identical house that is just less than a year older.
  • The possibility of issues in the use of materials and techniques Certain builders might skip deadlines or cut corners. Finding a builder who is focused on quality may require local referrals as well as studying reviews. If there are concerns discussing them with the developer prior to moving forward.
  • The absence of an agent could be a disadvantage In the absence of an agent for buyers when buying direct from the developer can permit first-time homebuyers to pay more and not fully inspect the property or even default to the builder’s preferred lender instead of comparing.

 

How To Shop for a Newly Constructed Home

If you’re looking at the model homes, you’ll have to keep certain things to keep in mind that someone looking to purchase an existing house would not have to think about. But, generally speaking keeping the same eye can be beneficial in any situation.

Define the Price You Pay in relation to. the price advertised

If the new home you purchased is being constructed and you are able to visit it, a lot of the selling process look like an existing home purchase regardless of whether you purchase from an actual developer.

Note

If you’re looking to purchase an unfinished home You may be making choices based on the features you observe in the house model. If this is the case, you’ll need to know what components are standard and. what are improvements.

“One among the more important factors that buyers of first time to know when buying a new home is that the price advertised will not be what you pay. In the case of newly constructed homes there are a lot of things you see in the model or spec home are additional features that you’ll have to pay for,” Bill Gassett, real estate agent with RE/MAX Executive Realty, explained to The Balance via email.

“New construction usually comes with a higher price tag not just due to the improvements that be costly, but too. Buyers should be aware in that they’ll pay more for the things they would like,” Gassett said.

This is why you should get a clear estimate about what your build will cost instead of using a basic model that isn’t upgraded or could include more than what you’ll need. In addition to this step of the process, it’s a good idea to speak to homeowners who own homes owned from this developer as in gaining a sense of the reputation of the developer.

Define Your Purchasing Timeline

Take note that even If you’re interested in an available property in a builder’s neighborhood the property could be put under contract before you are able to buy it. Then you’ll need to consider the length of time you’ll need for the home to be completed.

Another method to think about this is to begin researching construction projects as early as you can, to ensure that there will be an inventory of the building available for when you’re ready to move.

Gain an Understanding of the Developer’s Vision

Developers have a dream of whether they’d like to construct sprawling, huge homes on vast acreage within smaller communities or a walkable community with affordable ” starter homes” on smaller lot that can be easily maintained.

Although you might be able of assessing your options based on the existing properties and other properties, you should talk to the people who live who live in the area to gain an understanding of the area you’re moving into. Developers might have a vision however, they also have business interests and aren’t part of the community. Residents who live nearby or in the area can tell you more about the community’s culture is such as, with both positives and negatives. You might consider attending community board meetings and contacting online neighborhood groups to get a fresh opinions.

Conduct a New-Construction Home Inspection

On the surface, one may think that a recently constructed home wouldn’t require an inspection of the home since it’s not yet had the chance to allow the effects of aging to take hold However, poor craftsmanship can be a possibility.

Note

One method by which builders make sure you are comfortable with the new construction home is by walking you through the property prior to the closing. 1 But be aware that the closer it is to closing, the greater stress you will feel to conclude the sale even if you’ve got questions.

If you employ an inspection service for your newly constructed home ensure that you hire an experienced inspector. Make sure that there’s a way for them to inspect the house thoroughly after construction is completed, however you could request an opportunity to look over the construction in during construction as well.

The inspector of your home will keep an to be on the lookout for any issues in new houses, but there are a few basic things to consider when conducting your walk-through

  • Unlock all doors, windows and cabinets to test the proper fit.
  • Be sure to check for any cracks or weatherstrips that aren’t in good condition.
  • Find any spots that are missing in the paint as well as other finishes.
  • Make sure that the faucets and appliances are functioning.
  • The landscape around the house that is sloping towards the base.
  • If any specific enhancements or requests were made be sure they’re present.

All of these are items you can include on your the list of changes or repairs prior to closing because they’re an element of the cost you’re paying. It’s worth the time and effort to get these fixes done without cost prior to moving into the property.

the authorAaron Krause

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