When you make the decision to buy new home construction, the thought can exciting and intimidating at the same time. You may have several questions going through your mind including; How does the process work? What is included in the price? How long does it take? Do I need a Realtor?
Buying new home construction is different than buying a resale home. These 6 money saving tips will not only give you a better understanding of the in's and out's of buying new home construction. But it will help you save money along the way.
1. Hire a Real Estate Agent
Having an experienced agent by your side prior to walking into the sales office, will save you money. It's no different than when you hire an agent to represent you for resale homes. An experienced agent will negotiate incentives for you, guide you throughout the new home construction process, give you advice on which home features will bring you the most value, and make sure that the contract is in your best interest.
A mistake that home buyers make is relying on the representative at the sales office. That rep is there working for the builder. Their job is to sell you a home on behalf of the builder. Homebuyers may think that if they go at it alone they'll get a discount on the price of the home because the builder is saving on commission. This could not be further from the truth. Most large home builders have the real estate agent's commission built into their marketing budget. And will not discount the price of the home based on commission.
So doesn't it make sense to have your own agent by your side to help you avoid making any costly mistakes?
2. Be the Early Bird
"The early bird gets the worm" In this case, the early bird gets the deal. In my opinion, the best time to buy new home construction is at the very beginning of the development. When the only thing you see on the new home development site is the sales office trailer. Now don't get me wrong, I'm not saying to pass up on new construction when the project is in the middle or end phase. What I'm saying is, is that you'll save money by getting in at the very beginning.
Typically new home builders will raise prices with each new phase of the development. Pricing is at it's lowest prior to the models going up. And then will increase at each phase of the development.
You're probably thinking to yourself, "but I can't buy a home without seeing it first." Many of us are visual. We need to actually walk through the home to get a feel for the space. To get a sense of living in the home and see if it will work for our lifestyle. It can be hard to visualize what the home is going to look like based on a paper floor plan. Not to worry, most large home builders have other developments in nearby towns. They'll either have the same or similar models to the one you are considering. You are free to visit those models prior to moving forward with your home purchase.
3. Compare Builders
New home builders are not alike. Check their reputation, research them online. Look at their warranty. Find out what is covered. If the warranty is long term, is it transferable? The sales office will supply you with the standard features included with the home. Here are important features to compare:
- Are 'all' appliances included?
- Is the heating and cooling energy efficient?
- If the basement is included, is it partial or full?
- Which construction materials are being used?
- What type of insulation?
- What is included in the plumbing?
- Is the garage fully drywalled?
- What is included in the electrical? Is it 100 or 200 amp service?
- Is the lot fully sodded? or is the front sod, and the back seed?
- Asphalt or concrete driveway?
- Is a patio or deck included?
- What are the standard interior features?
Once you've compared each builder's features, you can then decide on which home's features will give you the most for your money.
4. Avoid Falling in Love With The Model Homes
Model homes are beautifully decorated. Builders hire talented individuals to design them. But if you fall in love with them it will cost you money. Why? Because model homes have a mix of standard and upgraded features. That can cause you to spend more money. This is why it's important to know the standard features included with the home before looking at the model homes. It will then give you a better idea of which feature you'd want to upgrade.
Compare the square footages of the homes the builder offers. Will it make more sense to purchase a smaller model with upgrades, or a larger model without upgrades? Decide on which one works best for your budget and lifestyle.
After signing the purchase contract, you'll have a small window of time before you have to finalize your selection of features. The sales office will schedule an appointment for you to visit the design center where you will make your selections. Prior to your appointment, walk through the model home again and make a checklist of upgrades that you're considering. If you choose to upgrade, think about upgrades that will make more sense to have completed at the time of construction.
I usually recommend that my clients upgrade the exterior elevation. For the cost difference it's worth having some dimension to your exterior elevation rather than a flat elevation. Another recommendation is - flooring. If needed, upgrade the flooring in the bathrooms and main living areas. And lastly, the upper kitchen cabinets. If the home has high ceilings, it's best to opt for taller upper kitchen cabinets. Taller cabinets raise the eye level giving a sense of height, openness, and not to mention more storage space.
5. Get Everything in Writing
Any changes made from the original purchase contract, get it in writing. If you call the sales office and request a change, get it in writing. Any additional upgrade changes, get it in writing. I think I'm getting my point across here. Always be sure, for your own best interest, to get any changes made from the initial purchase contract that you signed with the builder, in writing.
6. Hire a Home Inspector
You may think that because you are buying new home construction you can skip the home inspection. Instead it's wise to hire your own home inspector. Typically the builder will not allow you to make the purchase agreement contingent on the home inspection. But rather the inspection is for your piece of mind to make sure the home is in order and up to code.
More Helpful New Home Construction Resources
- Why Have a Buyer’s Agent When Purchasing New Construction by Bill Gassett
- 20 Do’s and Don’ts of Buying New Construction by Wendy Weir
- Should I Build a New Home or Buy an Existing Home? by Kyle Hiscock
- Laying the Groundwork: Tips for a Newly Constructed Home by Debbie Drummond
- Buying a New Construction by Kevin Vitali
- Guide to Buying a New Construction Home by Anita Clark
It's an exciting time to build a new home. But as you can see it's important to educate yourself on the in's and out's of buying new home construction. It will save you money in the long run.
This Real Estate article "6 Money Saving Tips When Buying New Home Construction" was written by: Maria Mastrolonardo. I'm a Realtor with RE/MAX of Naperville, and I've been selling Homes in the West Chicagoland area including but limited to: Naperville, Wheaton, Lisle, Downers Grove, Aurora, and Winfield for 20+ years. Let me help you buy your next home or sell your current one. You can easily reach me by calling or text at (630) 248-6077 or via email at firstname.lastname@example.org. I look forward to working with you!