New Construction

The 12 Keys To Buying New Construction In Today’s Market

1. Some builders are selling faster than they can build the homes, so be wary of estimated completion dates.

2. Builders often advertise the base price. Know that options and lot premiums can add thousands of additional dollars to the final sales price.

3. Builders have a product that buyers want, they generally aren’t motivated to give deals when you build from scratch. If they do, it is usually built into the price in some way.

4. Negotiating on the base price of a home is rare. The Builders have determined their costs, profit margins, and marketability and set the homes prices accordingly. In rare cases they may have some room to move.

5. If you find a home that is already complete (referred to as a speculative or “spec” home) you may find that the builder is more motivated to accept an offer below asking price. They are losing money each day it sits on the market.

6. Most builders have similar standards for structural items such as windows, doors, exteriors, but can vary on what is included for cosmetic items. Tile, cabinets, sprinkler systems, appliances, and other items may be quite different, shop carefully.

7. Builders will usually offer incentives on closing costs if you use their preferred lender. If you use your own lender, you will most likely pay all of the closing costs, including some normally paid by seller.

8. Things you might think would be standard might not be, carefully go over the popular upgrades checklist to make sure that you have thought of everything. Changes during construction are generally not permitted without severe penalty, if allowed at all.

9. The Builder will require a binder deposit (usually 3-5%) to build your home. They normally will not require a construction perm loan and will incur the cost of building themselves.

10. Some builders are more flexible than others on when and how much binder they will accept. Check with your agent to see if you can negotiate a lower binder.

11. The agent that works in the model home works for the seller. Though they are required by law to be honest and fair, and most are very nice to work with, they do not represent you.

12. The builder usually works with Realtors who bring them business. The prices may not change much, if at all, by having your own agent.