These top tips for buying new construction will help prepare you to navigate, and enjoy, the complex process of building in a new neighborhood—and get the best possible outcome!
Get a buyer’s agent, right from the start. The onsite agent’s ultimate responsibility is to the builder, not to you. Having your own buyer’s agent ensures a knowledgeable expert is prioritizing your interests—someone who:
- knows what to look for in contract fine print—and helps clarify what is and is not actually included in your build.
- manages negotiations—invaluable, given the unique challenges of new construction deals.
Plus, enlisting a buyer’s agent early in your search, particularly if you’re new to an area, can help you find the location, neighborhood and builder most likely to meet your needs.
Know the developer and/or builder. Many people initially fall in love with a community or home—understandably—without knowing anything about the developer or builder.
- When purchasing in a new development you’re not just buying a home, you’re investing in a vision. Minimize your investment risk by assessing the developer’s track record.
- Similarly, the reputation, quality and consistency of your builder is critical in helping ensure your home turns out as you want and need it to. Read reviews. Speak with your buyer’s agent and even others who’ve used them.
Doing your homework at the early stages can save trouble and heartache later.
Consider how long you plan to stay in the home. Buying new construction is a little different from buying an existing home when it comes to appreciation value: it’s typically slower.
- New homes tend to cost a little more than existing/re-sale homes, in part because they’re new, accommodating current labor and material costs.
- Buying in the early phases of development might mean a slightly lower price because builders need to encourage you to ignore the inconvenience of construction noise and traffic—but it’ll typically take longer for your home to start tracking up in value, even in a strong market.
Be flexible with your move-in timeline. The average new construction build runs 7-12 months. But during the million and one steps from contract signing to handing over the keys, plenty can—and will—happen to throw that estimate off course. You’ll want to be prepared for delays, including where you and your possessions will go if your selling as well as buying.
More planning tips for buying new construction
Prepare your negotiation strategy. While you won’t have much wiggle room on the purchase price when buying new construction (and for good reason: that price affects the overall neighborhood’s appraisal value), that doesn’t mean you can’t negotiate! Each of the items in your upgrade and design package has potential—even lot premiums and upgrades can sometimes be negotiated. We had one client who was able to negotiate backyard grading changes that doubled the size of their backyard!
Have a list for the design center—and eat before you go! Temptations are everywhere at the design center. To avoid going overboard on splurges, make your game plan before you go. Think carefully about which upgrades you’ll truly enjoy, and will help boost your home’s value. Why eat first? A full stomach can help you stay focused during what is, for most people, a day that pushes the limits on decision-fatigue!
Make selections based on true value not convenience. Many options, from appliances to design upgrades and financing, will be available through your builder. That’s handy, but not all of them will give you the best value for your dollar. Buying the refrigerator through the design center is convenient, and would save you a chunky cash outlay now, but if it runs you 3-4 times the price overall, you’d be smart to think again.
Secure your own home inspection. While town or city building inspectors, as well as you and possibly your agent, will be checking on the home’s construction along the way, there’s still plenty that can go wrong. Ensuring a qualified, licensed, independent home inspector evaluates your new construction home (see this recent post on what to ask your home inspector for more detail) is a must. Don’t assume everything’s fine just because the builder says so.
This is a short list of tips for buying new construction to get you started. Since everyone’s situation differs, we recommend speaking with an agent early in the process. We hope you’ll give us a call when you start exploring your next move.