Things You Need To Know Before Building A New Home

Building a new home can be overwhelming for many home buyers. Whether it is your first time to build a new home or you’ve gone through it before, the ins and outs of the process can be difficult. You need to be engaged in all aspects of the home building process to ensure everything goes well and that your new home turned out the way you envisioned it. Here are top 5 things you need to know before building a new home to arm yourself with the knowledge to get started.

1️⃣ Building a new home takes time

You’re going to need a lot of patience when you decide to build instead of buying a resale home. Building a new home takes time. When you see this beautiful model home you want and sign a contract, it would take somewhere between four and nine months before you get to enjoy your new home. The waiting time is longer for bigger homes. You also have to keep in mind that the contract you signed is in favor of the builder. The contract has clauses that allow them flexibility. Let’s say they quote you at six months but ended up taking nine months. You need patience for this scenario as there could be delays that could prolong the construction process of your home.

2️⃣ Know what’s included in the price

It is important to know what features are included in the base price of your home and what features are optional. Some new construction communities have a lot premium. There’s a separate price for the land and the home, so the price you’re looking at for a home doesn’t include the lot and you’ll have to pay an additional premium. Also be careful to separate upgrades from the standard features to know what you’re buying. Usually, model homes show features that are not included in the base price.

3️⃣ Know what’s not included in the price

Sometimes it is easy to get carried away with what’s included, the upgrades, and what the builder can do for you that you forget what they’re not going to do for you which is just as important. Typically what a new construction doesn’t include is a basement, a backyard, and a fence.   Those are some of the basic items that many new home builders don’t do. Each builder is different and you should check with them, but it is more likely that there’s additional cost if you want to have a finished basement, a backyard with full landscaping or a whitewashed fence yard.

4️⃣ Builders have a preferred lender

Usually, builders have preferred lender or in-house lender.  They usually offer incentives so you’ll choose to finance with their preferred lender.  Now there’s a pro and con to this. Sometimes it is really beneficial to use their preferred lender, they could give you closing costs, they could add upgrades to your home for ‘free’ or include them in their price. However, sometimes they give you incentives but their interest rates are higher compared to other lenders. So it is best to compare rates with different lenders and go for the one that will give you the best rates.

5️⃣ Builders actually pay for you to have an agent

Many people go on their own and buy new homes without an agent either because they think they could save money by not using an agent or because they are not aware that they can hire one. The on-site agents in a new construction community represent the builder. They are helpful and kind but ultimately they do not represent your interest. It is best to hire a real estate agent to represent you in buying a new home. An experienced agent can help you understand what’s common, what’s not common, what’s rational or irrational with what they’re asking you to sign. Best of all, it’s free service to you. Builders actually pay for you to have an agent. In most cases, the builder would like for you to have an agent representation because it would make a smoother transaction for all parties.