Buying a new construction home sounds like an amazing opportunity to many buyers. A new build is a home that has been recently constructed, and no one else has lived in that home since it was built. It's all yours to do with as you like.
However, you have to decide if a new build is the right choice for you. Make sure you know what you're looking for and consider these key points before you make your purchase.
The pros and cons of buying a new build home
Buying a new build home has advantages and disadvantages. Carefully evaluate these before determining whether a new build home is the best choice for you.
The advantages of new builds
Many people like the idea of buying a new build. They come with a number of advantages.
1. You can often customize the final details that go into your home
When you purchase a new build home, many of the details that go into finishing up the property often haven't been completed yet. Instead of having to fit your vision and your possessions around features that are already in place, you can choose the items you want.
2. No one has lived there before
It's brand new, and all yours! For many buyers, this is a substantial draw.
3. Your new construction home is likely more energy efficient
Energy efficiency has grown exponentially over the past several years alone and looks set to continue growing in the years to come. A new home is often more energy-efficient than an older one, with doors and windows that let out as little energy as possible, efficient heating and cooling, and the latest features throughout.
4. New builds often exist in new communities, with better amenities
New construction often goes up quickly in areas that are experiencing a great deal of growth — which you can take advantage of. You may get a neighborhood with better parks, more recreational facilities and a variety of stores and restaurants nearby.
5. New homes are often move-in ready
You don't have to wait on someone else to move out or take care of fixing up and cleaning up after they leave.
6. Maintenance costs are often lower in the first few years
In those early years in your new property, you shouldn't have to worry about fixing up as many details. And your new build will come with a home warranty that will cover a lot of the problems that could arise.
The disadvantages of new builds
Of course, no home purchase is without its disadvantages. Before purchasing a new build home, make sure you take these cons into consideration.
1. New builds may offer a lack of design choices
You may not have the same freedom you would have if, for example, you were building a home yourself. You may also find that buying a new build leaves you without as many options when it comes to flooring or paint colors — all things you might need to update after you buy the property.
2. Not all contractors have the skills to build your home
Poor construction can be quickly concealed behind the lovely elements of a new build home. Unfortunately, they may start to show up after you move in. A home warranty, which the builder may include, can help offset the cost of some of those potential problems.
3. Upgrades can add a great deal to your price
You may want to customize a new build home before you move in. Those changes, however, can add up quickly, especially if you don’t evaluate your budget before you make those changes.
4. It can take more time than anticipated to close on your home
If you're picking a new home in a new neighborhood, you may need to wait until the contractors are finished before you can close — and weather and other challenges can create unanticipated delays that make it take longer for you to get into your new home.
5. You may have less room to negotiate on the price of a new construction home
If you have a tight budget, keep in mind that you may not have a lot of negotiation options when you purchase a new build home. It takes a significant investment to build a new property, and every option that you add to the home adds to that price, too. As a result, you may not have a lot of negotiating room when you come to the table. Negotiation may decrease even more if you’re interested in a home that’s recently been completed, especially if you’re competing with other buyers.
What to look for in a new build property
When looking at a new build property, make sure you know what you need to look for and what matters for your family. By evaluating these critical elements, you can make a choice that better fits your family's specific needs.
- Testimonials from previous buyers. Take a look at previous homes constructed by the builder you're considering. How have they held up over time? If possible, speak to neighbors who have purchased some of those homes. Ask what they like about their properties and what they dislike, including what they would change if possible and how accommodating was the builder during their homebuying experience. This conversation can give you a better idea of what to expect when you buy your new build property.
- Contractor options. Many contractors will create a relatively limited set of options for buyers in their new neighborhoods. You may want to carefully consider what options are available to you and which ones are important to your family. For example, if you don't want carpeting in your home, does the builder offer an option that will allow you to choose hardwood, laminate or tile instead? Can you choose your own paint colors? Discuss these options before you move forward with buying so you know what to expect.
- Warranties. Even the best contractor can make errors. Unfortunately, those errors can lead to substantial expenses once you own the home. Take a careful look at the warranty options the contractor provides. You want a contractor that warranties the work and will work hard to ensure that you get the high-quality home you wanted.
- List of available amenities. Often, when you buy a new build home, you’ll walk through a model property, not the one you’ll be purchasing. The model home is designed to look the absolute best it can. Not only does the builder often take more care with it, it may contain the top-of-the-line upgrades and options that don't really fit into your budget — or that you can't afford at all. Before you make a decision about your new home, make sure you fully understand what extras or options you’ll be purchasing along with your property — and what you won't. Ask questions up front about what those upgrades, especially the ones that you're most interested in, will cost.
- Contract and contingencies. Before purchasing a new construction home, make sure you get everything in writing. If you add options to your home, the contractor is supposed to finish up specific milestones by a certain date. If they need to come back and take care of something after you move in, make sure you get those details in writing and ensure your lender will allow that particular item to be done after closing. Do you want to make upgrades to your home? Get them and their costs in writing. You don't want a contractor to back out on you later.
- Any additional costs. Buying a new construction home can come with some additional costs. You may need to worry about landscaping, window treatments, and other upgrades to the property
A new construction home can be a great investment, especially if you're looking for the latest amenities or trying to make sure you have everything in place for your family later. By considering these elements up front, you can increase your odds of making a home purchase you'll love.
Speak with a Home Lending Advisor to learn more about your options for buying a new build home.