If you’re looking to buy a home, you’re probably aware of the fierce competition in the housing market right now. People are moving more than ever before…upsizing, downsizing, relocating from other states, etc. All of this activity and demand is leading to bidding wars and higher property values. Fortunately, there’s a solution to help you avoid some of this chaos: buying a newly constructed home.
If you want to learn more about this option, keep reading! This article will discuss the things you need to know about purchasing a new construction home.
Choose an Agent and Lender
One of the crucial steps in buying a new construction home is choosing an expert real estate agent who can guide you through the process. For example, they can advise you on what to ask who to choose as a builder, or how to make the most efficient use of your funds. Make sure you choose an agent that is reputable and experienced.
Another step homebuyers need to do is secure a preapproval from a lender. Since you’re purchasing a new construction house, the lending process could be different. You may need to apply for a home construction loan rather than a mortgage. It really depends on the builder and the lender you are working with.
Find New Construction Homes for Sale
There are several ways you can find the new construction home of your dreams:
● Research online: You can look for new construction properties using Google or prominent real estate websites. Your agent can also search for new construction or properties that are under construction in the Multiple Listing Service.
● Drive around: Another great strategy to uncover new construction houses for sale is simply driving around the neighborhoods you’re interested in. Take photos of the builder’s signs and send them to your agent. Your agent can call and get all the details pertaining to the neighborhood.
● Check out home builders: Finally, you can look up some prominent home builders and check out their websites to see whether they’re building a home near you.
Negotiate and Understand the Terms of your Contract
I’m going to rip the band-aid off pretty quickly on this one. Right now, buying new construction is not about getting the builder to come off their price….because they’re not going to. There is simply too much demand for new housing and too much fluctuation in the cost of labor and materials for builders to come off their list price. Buying new construction is about securing a property while avoiding a bidding war.
All that being said, there are a lot of terms other than price that go into a contract. Is there an appraisal clause? What is your deadline for securing financing? Are there any points during the construction process where you can terminate the contract and receive your deposit back? Is the builder allowing upgrades or changes? What is their change fee? These are just a few of the details that will be covered by your contract.
Lastly, most builders have their own contracts written by their own attorneys, so you should read the contract carefully and understand exactly what the builder is promising to do, and what you’re promising to do as the buyer.
Perform A Home Inspection
Yes, even though it’s new, buyers should still perform an inspection on a newly constructed home. A new construction house is unlikely to have severe problems. However, these homes are still built by humans, who sometimes make mistakes. For example, I sold a new build in McKinney a few years ago. It was discovered during the inspection that the crew had missed one of the rooms when installing insulation. This was a problem that the builder remedied immediately. I sold another new build in Garland and the inspector found a leak in one of the large windows on the front side of the house. Again, the builder fixed the problem immediately.
The Bottom Line
If you want to escape the stress of bidding wars, purchasing a newly constructed home may be the best choice for you and your family. It’s also a great way to get into a property that will be much lower maintenance than an older property.
I hope that these tips are helpful to you. If you have any questions, please do not hesitate to give me a call, text or email. I’m always happy to help out!
Be well 🙂