A Step-by-Step Guide to Buying a New Construction Home
If you’re considering a new construction for your next home, you may be wondering how to go about buying one. For many people, the process seems complicated and daunting, particularly if they’ve never done it before, but we’re here to show you it isn’t. Understanding the steps involved and the important actions you need to take is key to ensuring that you’re able to easily and successfully turn your dream of owning a new home into reality.
NewHomesMate is here to guide you through the entire process of buying a new construction home, from searching for homes and communities all the way to closing on your dream home. We’ve put together this guide to give you an overview of the process so that you’ll know exactly what to expect when you decide you’re ready to move forward. Read on to learn more.
How to Buy a New Construction Home
- Get Mortgage Pre-Approval
- Get a Real Estate Agent
- Understand the Timeline for Completing the Homebuying Process
- Research Properties, Neighborhoods, and Builders
- Negotiate and Review Your Customizable Options
- Inspection and Sign Off
Get Mortgage Pre-Approval
Before you begin to search for a new home, you need to know what you can afford. As part of the mortgage pre-approval process, a lender will review your financial details and creditworthiness to provide an estimate of how much you can borrow and what your interest rate will be. Before you apply for mortgage pre-approval, be sure to do what you can to improve your chances of getting a mortgage as this will give you more options in both the amounts you are able to borrow and the interest rate.
To obtain a mortgage pre-approval, you will need to gather financial documentation, including your employment details, income, assets, and tax returns. Once the pre-approval process is complete, the lender will issue a preapproval letter to you, which is a statement of the value of the amount they are willing to lend. Getting a pre-approval from a lender does not mean you are obligated to borrow from them–you can still continue to shop around for more favorable options during the buying process.
Get a Real Estate Agent
No matter where you are in the homebuying process and what type of house you’re looking for, consulting a real estate agent is a good decision. First off, a realtor can help you understand your options so you can decide whether a new build or an existing property is the right choice for you. They will use the information you provide about your needs, desires, and budget to help you find your ideal property, and they will guide you through each step of the homebuying process including financial negotiations, setting timelines, and dealing with any contractual issues that arise.
At NewHomesMate, we’ve gathered some of the best real estate agents in the areas we operate in. Our realtors have a deep understanding of local neighborhoods, as well as good relations with local builders that can help you get better terms and options for your new construction home purchase. By working with us, you can be sure that you will be guided through the entire process by knowledgeable professionals who are experienced with new home purchases.
Understand the Timeline for Completing the Homebuying Process
Many of the factors that will impact the timeline for completion of your new home purchase will be out of your control. However, it’s important to understand what these factors are and how long they will take, so that you have realistic expectations about when you will actually be able to move into your new home.
Custom-built homes usually have extensive timelines that allow for plans to be drawn and approved, builders to be engaged, and construction to be completed. For semi-custom and spec homes, much of the timeline is determined by the builder/developer, but you also need to factor in time for finding a lender, selecting a property, customization, and building completion. Keep in mind that if you have to sell your existing property before you can complete the purchase of your new property, this can further delay your timeline.
Research Properties, Neighborhoods, and Builders
From selecting a neighborhood to deciding on the layout and style of your new home, there are so many things to consider. By thoroughly researching and exploring neighborhoods, properties, and builders, you can ensure that you are equipped with all the information you need to make the best decisions. A real estate agent who knows the local area and has a good understanding of the current real estate market and available properties will be your best asset. They will take the time to understand your needs, desires, and budget so they can do all the research for you and present you with the best options.
One of the main considerations in buying a new home is location. The best way to research an area is to actually drive or walk through it. Take notice of the amenities and get a feel for the neighborhood and community by simply spending some time there. You may also want to consider whether the neighborhood has a homeowner’s association and review its rules and costs.
Once you have narrowed down your options for which areas or neighborhoods you wish to live in, you will need to begin researching properties and builders. For semi-custom or spec homes, your choices will be limited to the available properties and developments in the area. If you’re building a custom home, you will need to research and carefully select your building team, which will include an architect, builder, and several contractors.
Reviewing a construction company before committing to purchasing a new construction home from them is a very important step, given the large financial commitment you are making. New home construction companies and developers can range in size from major national corporations to locally-owned operators, but the methods for reviewing them are the same. Be sure to look at Better Business Bureau ratings as well as online reviews, and try to find evidence to support a track record.
Negotiate and Review Your Customizable Options
The final price for a semi-custom or production home depends on the customization options you choose. Depending on your builder and the type of home you are buying, you may be faced with all kinds of decisions regarding the construction, design, and style of your new home. Exterior features you may need to select could include brick type, siding, roofing materials, fencing, and yard options. For the interior, you may be asked to choose your kitchen design features, bathroom fittings, light fixtures, paint color, and even which brands or types of appliances you want.
If you are building a custom home, there are even more decisions to make. Be prepared to decide on, negotiate, and review every detail of your new house from exterior to interior.
Inspection and Sign Off
During the construction process, builders will conduct their own inspections to ensure they are meeting all building code requirements. You also have the option to appoint an independent inspector during the building process. An independent inspector can ensure that all details of your new construction are being delivered as promised and that all materials and systems installed in the home are safe and in good working order. Once construction is complete, a housing inspector from an external organization is appointed to inspect the home to ensure it meets all local building code requirements.
Before closing the sale, it’s a good idea for you to review your new home warranty to ensure you understand what is covered and the coverage period. It’s also essential that you do a final walkthrough of your new home. Every home is different, but many houses have the same potential issues. Your builder may provide you with a checklist of things to look for or you can have your independent inspector advise you. The result may be a list of items that still require the builder’s attention, but this ensures that your home is near flawless when you finally move in.
Start Searching for Your New Construction Home Today
Choosing to buy a new construction home may be one of the most important decisions you make. There are many factors to consider and many steps in the process, but the final outcome is a brand new home that is built to match your personal needs, preferences and style.
NewHomesMate makes the homebuying process for new construction homes easy. On our platform, you can search for and discover thousands of new construction homes and communities in your area. And, when you’re ready, our new home experts will be there to help you make an informed decision and guide you through the entire homebuying process so that you can turn your dream home into a reality.
Start searching with us today!