If you’re in the market for buying a home, new build homes can be an enticing option. From the start, buying one has its own process that makes it distinct from buying an existing home with increased control over the look and feel of your house and access to the latest materials.
Still, there are fundamental similarities between the two. A late spring/early summer buyer’s market for 2022 makes for good timing to look at real estate, and it’s best to scope out new home projects available to you when pricing is advantageous.
With that in mind, let’s explore the steps of buying a new build home from start to closing.
1. Pick your ideal type of new home
While you may have an idea of what buying a new home might look like, the reality is that there are a variety of options available based on your wants and needs; it could be anything from building your dream home from the ground up on an empty lot to buying a completed house that’s ready to be bought as built.
Tract homes are parts of new developments on land purchased by builders with the intention of building a new neighborhood. The builders typically provide several models with base options and layouts.
Tract homes also provide a balance of customizability, with the buyer able to make some requests on adding or removing features from the home before and during the build while still letting the builder handle the overall blueprints.
Custom homes are built from the ground up to the buyer’s specifications. It’s as custom as new build homes get. Working with a chosen builder each step of the way, you can determine the blueprint to build your dream home.
However, going the custom route means that you need to have your heart and your wallet fully invested in the process. There is considerably more work on the buyer’s end than with the other new home types. Predictably, this is also the longest and usually the most expensive way to go.
Spec homes are pre-built, fully finished homes ready to be moved into. Like the other two, everything is brand new. They are usually in the price range of tract homes but without the waiting period for construction. The tradeoff is losing your input on the design and building process—you get what is there, just like buying an existing home.
The simplicity of buying a spec home translates into requiring slightly fewer steps than the ones listed below, as the other two types are usually more in demand and require more steps to complete.
2. Meet with a representative or agent
A new construction site will frequently have a representative on-site who can familiarize you with the neighborhood or land (depending on the stage) and the houses available to you. From touring model homes to preliminary pricing, they can set the stage for orienting you with their builder and project.
For sites without a representative or if you’d like someone working on your behalf throughout researching and visiting multiple sites, a qualified buyer’s agent can act like a real estate agent advocating on your behalf and informing you on details you may be unfamiliar with.
3. Pick the right neighborhood
As with existing home buying, location matters, even if the immediate neighborhood is under construction or hasn’t been built yet. Consider the lifestyle you want to live, the amenities you want, and the proximity of your potential home to important places like schools, work, outdoor spaces, entertainment, and more.
The characteristics of the new build community may be aligned with or deviate from your envisioned experience. For example, some communities are 55+, which could fit with your goals but be out of touch with the needs of your adult children. The terms of a homeowner’s agreement (HOA) might add complications to your plans for exterior design. Considering factors beyond the home itself is an important step to make sure you’re satisfied with your residential experience.
4. Secure a home construction loan
A home construction loan provides short-term financing while a home is constructed. This loan differs from a traditional mortgage because, while the latter is paid in its entirety at closing, loans for new home construction are released incrementally (“draws”) at certain points along the timeline of construction. Once construction is complete, it will be converted into a mortgage or the lender will require you to get a mortgage elsewhere.
Look for lenders who are familiar with new construction loans or use the recommended lender provided by the builder who may offer a reduced price for using that lender. Either way, it’s fine to shop around, looking carefully at the terms, rates, and reputation of any lender to make sure you end up with a fair deal.
5. Research builders and their developments
Conduct research on the builders and their existing projects. Looking at their website or conversing with the builder’s representatives are good ways to see previous developments and get an understanding of their building and community philosophy.
At this stage, it’s a good idea to look at model homes (or at least vacant ones) if you haven’t yet. There is no substitute for seeing and feeling a finished product to assess if it meets your expectations and feels right.
6. Review a purchase agreement
When it comes time to review the details of a purchase agreement, a representative or agent should be working with you to make sure you’re clear on the terms and conditions.
There is less room for negotiating compared with buying an existing home, it is still good to pay close attention to ensure that you understand what might happen if issues arise during construction. Will you be readily informed of unexpected price increases for certain materials? Will the builder be willing to provide you with replacements?
Materials shortages have been known to occur, especially after the pandemic, so it’s prudent to plan ahead.
7. Select and customize your plan
Most builders maintain a catalog of available models or floor plans. This gives you a degree of choice in style, size, and starting price. Think of the best lifestyle for you within your budget, and pick one that is the best fit.
Pre-construction meetings with the builder allow for the discussion of options, upgrades, and expectations, but the first meeting is likely the most important. Here, you’ll determine the plan and core details of the desired finished product.
The standard options for colors, finish, appliances, and more are almost always the least expensive choice by default. These may work well for you. In any instance where you want an upgrade, you can preview them with the builder. While they cost more, it may be worth the investment if you want to increase your home’s resale value, or if a certain component of the home is especially important to you.
You may have more flexibility than you think in asking for features that aren’t included in the plan layout, or removing ones you dislike. Most builders are open to installing third-party extras or taking out unwanted options - usually for an extra cost, though.
8. Conduct an inspection
Just like when buying an existing home, an inspection ensures that the builder’s finished product is in agreement with the homebuyer’s wishes and devoid of any issues.
An accredited inspector familiar with new homes should be able to make sure that everything is in good condition and in compliance with codes.
Anything not up to expectations will be noted, and the builder will come back to remedy any issues on the list before the project is officially deemed complete. It’s good to have an inspection after this occurs as well.
9. Understand the warranties
Before signing the warranties provided by the builder for your home, it’s important to understand the difference between the two types.
Implied warranties take into account workmanship issues that impact the safety or livability of a house. They tend to be non-specific and apply for ten years.
Express warranties more clearly state any issues that the builder must be responsible for repairing. The length of warranty will vary depending on the builder, and it indicates how the homeowner should raise a claim.
10. Make the final walkthrough
After the inspections and final fixes by the builder are in order, it’s your turn to see the house with your own eyes one last time before taking full ownership.
If you’ve had an inspection and worked with the builder in the previous step, just about everything should be in its place. Still, it’s your home, so you are at liberty to make sure there are no final concerns or materials left behind.
Once you feel comfortable with all you’ve seen, you’re ready to finalize the process.
11. Close on your new home
Finally, all the steps have been completed to your satisfaction, and it’s time to make this new home your own.
When you indicate that you wish to close your home, the agent, lender, and builder will become aware of its status as in closing. You will complete paperwork, answer calls or emails, and be notified of anything else needed to officially close.
When all the technical parts are finished, you will receive the keys to your home. Congratulations!
Are you ready to start construction on a home designed specifically for your lifestyle? Then check out all that Brunswick Crossing has to offer. With a variety of models and resort-style amenities, your dream home awaits. Take a virtual tour today and explore the plethora of opportunities right at your doorstep.
