Buying new construction? We make it easy.
Buying new construction is similar – and different – to buying an existing home. And even if you’ve purchased or built a new home in the past, it’s always good practice to review the process.
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Test Your New Home Knowledge
1New construction costs more than existing homes.
It depends. New homes generally cost a little more than an existing home in the same Zip Code. This is largely due to higher land prices, inflation from sub-contractors and suppliers and more government regulations.
It depends. New homes generally have the newest technology and equipment designs, which may slightly increase the price over a comparably sized existing home.
2You must finance new construction through the home builder.
No. While some builders have their own mortgage company, most will use outside sources. You also have the option to use your own lender.
Builders often offer incentives for using one of their preferred lenders. This is so the builder will have more control of the transaction and assurance that it will go smoothly. But you may have the option use your own lender.
3New construction requires a large down payment.
Not necessarily. While a down payment is required on most all new construction purchases, it can vary from 1 percent to 20 percent, depending on the financing program.
No. New construction financing, like any kind of mortgage, requires an evaluation of credit worthiness of the buyer. New construction loan programs can require a down payment as low as 1 percent or as high as 20 percent.
4Most new construction offers a warranty.
Yes. Most builders offers some type of warranty – from 1 to 30 years. Larger builders generally offer an in-house warranty that covers everything for the first year; mechanical and structural for the first two years: and structural only for the remainder of the term.
Actually, most builders offer a warranty. Large builders may offer an in-house warranty. Medium and small builders usually offer a warranty through a third-party company. Custom builders may not offer a formal warranty but will guarantee the home for one year.
5It takes a village to build a new home.
When you build a new home, you have a team of professionals working with you to help you reach your goal. This begins with a pre-construction meeting to discuss the building process, procedures and expectations. Team members in attendance may include the onsite builder, onsite sales agent, the buyer’s agent and the buyers. There are also a number of inspectors who will be involved as your home nears closing.
New construction requires a team of specialists, each who play an important role. From builder’s representatives to carpenters to skilled tradesmen like plumbers and electricians, to inspectors, there will be many people involved in making your new home a reality.
6I have plenty of time to pick my colors and decorating features.
While some builders will allow you to select certain options while the home is under construction, such as upgraded flooring or carpet, most require you to select all of your options prior to the start of construction.
Part of the fun of building a home is choosing from the many options available from today’s builders. But once you make your choices, you’ll need to stay with them. If changes must be made during the process, most builders charge a fee.