Buying a new construction home is a bit different than purchasing a resale home – one that’s been previously owned by someone else. You’ll need to be familiar with a few tricks of the trade, along with understanding a bit about how the process works. These 20 tips to buying a new construction home are just the starting point on your way to the new construction home of your dreams. When you’re ready, I’d be delighted to be of assistance to you!
1. Use your own Broker/Agent
ALWAYS use your own Broker/Agent; doing so will help ensure that you get what you want. Understand that the sales reps you meet at a new construction community are likely really representatives of the Seller – the Builder, corporate owners, developers, whomever – that are there to present their product, answer your questions … and do the best job for the Seller that they can.
YOU want the same thing, but from your standpoint. You want to see the product, get your questions answered, but have your needs be number one. By using your own Broker/Agent, you can be assured that there’s no conflict of interest.
Most importantly, if at all possible, be sure to contract with a Broker/Agent before you start shopping. Often the policies at a community require that your agent be present at the first showing and then at every showing. If they’re not, you may find yourself working with the site rep even if you didn’t intend to do so. And your agent, who comes along later, may not get paid either – or perhaps will be paid a significantly less amount because the site rep was the person who registered you.
2. Don’t expect price reductions
Yes, it does happen. But overall, remember that Builders, etc., have established a set of prices that they feel best makes their product (the houses) marketable with an expected profit margin. Furthermore, lowering the price on a house drops the comparable value of other houses in the community, thus bringing the entire suite of houses down in price. Typically a pre-sale home … one that has not yet been built … will be slightly higher in price than a home that the builder erected as a “spec” house – one that was built to attract Buyers to the site. Note also, that very often homes that have not sold for a period of time will not drop in price – they actually go up in price at a new home development, thus supporting the builder’s position that materials and labor costs increase.
3. Look instead for builder concessions in the form of additional upgrades
Rather than price reductions, you may be able to gain a few upgrades from the Builder at no cost, or for less money. Perhaps the Builder would be willing to include a fence, landscaping, upgraded carpeting, or appliances as part of your purchase without charging you extra.
4. Builder incentives in the form of interest rates, etc., may not be coming from the builder
Lots of new communities boast incentive programs that cite things like “3.75% financing for 30 years” or “Zero Closing Costs.” What’s important to know is that the Builder may not be the one actually paying those closing costs, or reducing the interest rates. Typically, those types of incentives are coming from the Builder’s preferred lender who is counting on a sufficient number of loan transactions in order to recoup the cost of the incentives.
While Builders can’t require you to use their preferred lender in order to purchase a home from them, they can require you to use their lender in order to gain the benefit of the incentive. You’ll want to check with your own lender first to see if they’ll match the incentive or can give you a benefit in another fashion before deciding to switch gears and go with the Builder’s lender. Remember that nothing’s really free, so be a bit cautious when making decisions like this one.
5. Expect to use the builder addendum
In almost every case, new construction homes require the use of a Builder’s contract or at least a lengthy addendum in addition to the typical purchase forms used by a Broker/Agent. Generally those Builder forms include language specific to the terms of the building process and can be many many pages long full of tightly packed terms. While much of the language is common sense, be sure to read the contract thoroughly yourself (as will your Broker/Agent) and then consult with a qualified real estate attorney if you have questions or concerns. Agents, even those sales reps for the Seller, aren’t allowed to (and shouldn’t) attempt to advise you or interpret what those custom forms really say.
6. Builder warranties vary
Not all builder warranties are the same. Some builders warrant their work from top to bottom for several years, some only for one. Many builders will offer a warranty of up to about 10 years for structural-type issues, with other warranty time frames for things like plumbing leaks. In addition, you’ll find that your new home will likely have individual warranties for appliances, roofs, windows, etc. Be sure to carefully review the warranty offered by the builder of your desired home before signing the final contract for your Purchase.
7. The floor plan isn’t the floor plan
The little floor plan you see when viewing your potential home at the builder site isn’t an exact representation of what your home may look like. For example, you may see a nicely drawn oval bathtub with rounded edges on the drawing only to find out when the home is almost finished that the actual tub is rectangular. Room sizes are close estimates, but usually measurements are rounded. Sometimes the location of outlets will move around. Sometimes your chosen particular lot requires other modifications in order to fit the home properly.
8. Rarely can you modify the floor plans
Unlike building a custom home, most community sites where several homes are being built by the same or a group of builders are based on a preapproved set of plans that have already received the stamp of approval from the local building authorities. Conversely, in a custom home situation, your set of plans can be modified prior to building or even during the construction process if you want to pay the extra associated costs.
In these preapproved communities, fewer options for modifications are generally allowed. Doing so would significantly increase the amount of time the builder wants to spend on any one house, while also increasing his/her costs. Changes to floor plans, even to add extra outlets, etc., must be included in the particular permit and approved, which can involve new drawings and perhaps repeated permit processes. If you do want to make changes, be absolutely certain you’ve worked this out as part of your purchase contract.
9. Expect changes
While everyone starts out thinking all of the choices have been made, finishes chosen and the idea that the new home will look just like the model, realistically suppliers run out of or change products or prices, thus affecting the appearance of your home. Builders typically reserve the right to substitute materials and finishes, sometimes leading to surprises. Try to tour a finished home or two and do ask lots of questions about the sorts of things that the builder might substitute. It’s nice to know upfront what you might expect!
10. Expect about 5 months after permit or approximately 100-120 days after lumber drop
Every builder, City, County, etc. has different time frames that historically work for them when completing a home. For most builders in the greater Thurston and Lewis County areas, I’ve found that it takes approximately four months for a builder to complete a home after lumber drop – i.e., the date on which that huge stack of wood is delivered to your home site. Remember that lumber drop occurs after the construction permit from the city/county/etc. has been received by the builder … and after the foundation is complete. Those two tasks can add another month or even two to the process.
11. Add an extra month or so to the anticipated build-out time
As part of your pre-sale purchase, the Builder and/or sales rep will provide an estimated date of completion for the building of your new home. What’s important to remember is that the estimate is just that – a projection of when the home will be complete and ready for occupancy providing everything goes according to plan. Realistically, however, plans don’t work out exactly on time. In my experience, I’ve found it best to add about an extra month to the whole thing. Go ahead and include the Builder’s date in your contract, but in your heart expect delays.
12. Be sure to include your Broker/Agent in every walk through; cc them on all conversations, etc.
As indicated in Tip #1, your Broker/Agent is a critical part of your purchase team. With that in mind, be sure that you’ve asked your Agent to attend every walk through and meetings with the builder, and that you’ve included them in email conversations, etc. Note that some builders really try to restrict Agent attendance, but in my experience, you need an extra, knowledgeable set of eyes and ears to help keep things on track. You’ll want to negotiate or handle any restrictions they may have to this at the time you work through your Purchase agreement.
13. Don’t expect perfection
As much as we feel we’d like to control every piece of the building of our new home, realistically the house won’t be perfect when it’s complete. For example, the quality of wood used to frame the walls of your home is just not what it used to be. You’ll see knot holes, crooked boards, perhaps what look like curious framing practices, and so on. Unless you see significant problems, however, remember that each step of the build process has been inspected not only by the foreman in charge of your project, but also by the local building inspector who should be keeping an eye on things to be sure that the local building codes have been met. If you do see problems, be sure to bring them to the attention of your own Broker/Agent who will assist you in working out any issues with the builder.
14. Walking the site will get you into trouble
Stay away from the construction site, especially during working hours. There are a lot of physical hazards involved – workers are carrying lumber, shooting nails, stringing wires, spraying drywall compounds, etc. Most job sites require workers and visitors to wear hard hats in an attempt to prevent injuries.
Equally as important is the fact that you don’t really want to disrupt work flow. You want your house finished. By getting in the way of the current project, you’ll cause inordinate delays. Those workers can’t make changes and, as odd as it may seem, probably won’t even talk with you. They’re there to do their jobs, not chat with the Buyer.
Your purchase contract will probably state that you cannot visit the site without making an appointment with the seller rep who will then set up an appointment with the project superintendent or foreman. And then, of course, you’ll also want your Broker/Agent to also be in attendance so that there’s a good record of who said what and when. (Your Broker/Agent should also be conversant and knowledgeable enough with the process to help interpret what’s going on and what could be done to satisfy everyone involved.)
15. Be nice to the foreman!
You may only meet the construction foreman for your home build a few times, but these folks are gold when it comes to completing what you need. They’re usually very nice … but very busy … trying to coordinate several projects all at the same time and making sure that everything is done correctly. Remember, they have a critical job to do, but you want them to also be your advocate. They want the job done right too!
16. 
Take lots of pictures
Each time you have the chance to take a walk through of the home or when you do visit the home site, be sure to take your camera along. I can almost guarantee that you’ll want to hang a shelf on a wall at some point – and wouldn’t it be great to know approximately what’s behind that drywall? Not only that, it’ll be fun to look back at the process … later.
17. Ask for leftover paint, vinyl, granite tiles, carpet scraps, etc.
Most of the bigger builders will put together a very nice box of touch-up paint for you as normal practice, but if you can, you may want to also request that leftover vinyl flooring, the sink cut-out from your granite counter, and the leftover hardwood flooring pieces and carpet remnant be left for you. These can be helpful patching materials when accidents happen and it’s nice to have everything match. Note that many of the finishing steps are done by subcontractors, however, and it may just not be possible to capture any of the leftovers. In addition, significant leftover materials may be used in other homes or even returned to the supplier. It never hurts to ask!
18. Do your own inspection
More precisely, prior to closing on the purchase of your home, be sure that your purchase contract allows you to bring in a qualified home inspector to test the various workings of your home … checking outlets, plumbing fixtures, walking the roof, the crawlspace and attic, and so on. Typically the items found on your independent inspection will be repaired by the Builder, but will not affect timely close of your purchase. Builders often retain a time period after closing to repair defects.
19. The “certificate of occupancy” is probably not a certificate at all
The final step before the Builder releases the home to you for closing of your purchase will involve receiving signatures on the final inspections by the City/County, etc. thus allowing the home to be occupied. The term “certificate of occupancy” is a phrase used to indicate that the final signature was received and you’re ready to go!
20. Move-in day is the sweetest day on earth
Well, of course it is for every Buyer for every home … but there’s just nothing like the unparalleled excitement that seems to surround moving in to a brand new home in which you made all your own choices. On the day before the furniture arrives, buy a roll or two of that tacky carpet protector stuff or paper to cover the walking paths on the rugs and floors so that you and the movers don’t track the great outdoors into your new home.
… And then take a moment for a big smile! Take a few minutes to sit on the floor, on the deck, on the sofa in the middle of the room (because you can’t figure out where to exactly position it) and reflect on what you’ve accomplished. This was a BIG deal!
I seriously love that idea of taking pictures during the walkthrough. I might end up buying a newly built house instead of having a home built. That suggestion sounds like it might be a good thing to do when I check out houses since it might make it easier to compare all my options later on.
Thanks for the advice for buying a custom home. Perfection is what my wife wants, but I know we won’t actually get that. Like you said, there will definitely be small issues around.
I appreciate you talking about reviewing the warranty offered before signing the final contract. My roommate is looking to hire a site development service since he is getting married next month and wants to build a home. I’ll be sure to talk to him about looking at everything before coming to a decision.
My husband and I have decided to get a new home that was recently built, and we are wondering how to go about it. So I appreciate your tip to check out the builder’s warranty to make sure it is solid. We will definitely be looking for new homes that have great warranties, especially on things like the foundation.
I really like what you had to say here in regards to using your broker or agent when buying a newly constructed home. Just as you explained, you can make sure that there are no conflicts of interest when consulting with the realtor so that you both can get what you want. My wife and I are thinking about buying a new home and this information is going to be really helpful for us. Thanks again!
Asking for the left over paint and other scraps is so handy, especially if you scuff up a wall when moving furniture in (speaking from experience!). It’s nice to just have the paint to fix it, otherwise it might be easy to leave it undone until you’re ready to move. Lol
Do you have to put a down payment on the new construction before they start to build?
Pauline, that totally depends on the loan type you’re using and the purchase itself. I’d highly recommend that you chat with your lender to determine what the options are for the type of purchase you’re considering. If you’re building on a lot you already own, sometimes the value of the lot can act as sufficient equity in the completed project to be the “down payment.” However, every situation is unique. I don’t know where you are, but if you need a referral to an awesome lender, check the referral page on my site, or give me a call.
I like your tip to expect changes to the home and its finishes. I’m fairly easygoing when it comes to those sorts of things, so it shouldn’t be much of a problem. Later this summer I’m getting married and hope to buy a newly constructed home soon after.
I liked that you should see if you can see if you can make changes to the floor plan. After all, it can make the home more custom. It does seem like a good idea to talk to a draftsman and see if you can make a change to a default floor plan.
Thanks for the tips for buying a new home. My wife and I are considering buying a newly built home this year, but we want all the information we can get first. I like that you mentioned to make sure you use your own real estate agent so you know that they are representing your best interests. We will be sure to do that.
I do like that your article encourages readers to make sure that their contract allows them to bring in a qualified inspector. After all, every home, whether it is newly build or old, should be inspected before purchase. You want to make sure that everything from the electrical work to the plumbing is working properly.
I like that you pointed out that it is good to remember that the home isn’t going to be perfect. It is nice to know that there will always need to be little touch ups made to a home. I am someone who would freak out if something when wrong, so that is really a good thing for me to remember.
We have been living in the same apartment for nine years in hopes to save enough money to one day build our own house. It was super nice to know that each time you have the chance to take a walk through of the home or when you do visit the home site, be sure to take your camera along. I will keep that in mind when we start construction within the next couple of months!
I appreciate your tips for buying a new construction home. I especially like knowing that I can ask for a few upgrades and try and get discounts on them. I won’t loose anything by asking either. I also like the idea of asking for leftover paint. If that isn’t possible, definitely ask what the paint colors are and write them down. Paint shops can match colors, but it is easier when you don’t have to worry about this.
I appreciate the tips on buying a new construction home. I agree that it is important to use your own broker or agent, this can help you ensure that you get what YOU want rather than what someone else wants to do. My mom is looking into having a new home built, I will be sure to share this information with her.
This is a question that I have always though of. I’m thinking about partnering with Peter Veskselman a real estate expert located in Atlanta, GA. I’m thinking about building a home from ground up and I wasn’t sure if I should bring an agent on quite yet. Any advice?
I got very nice information after going through your post. Thanks for sharing.
Building the right commercial building for you needs the right people to do so. Always go for excellent record contractors when hiring.
Hiring the right contractor is very important in building your dream home. They should be excellent and should work in your budget.
I would really like to appreciate for giving such good tips that should be considered while buying a newly constructed house. But it is very important to consider the warranty period provided for the newly built house.
Yes, it is important!
I didn’t realize that you could ask for upgrades on this type of thing. It is good to know that it is more worthwhile to look into these than price reductions. To be honest, I would rather spend my efforts on getting a more awesome house than getting a cheaper home anyway. I’ll have to keep this in mind for when I talk to my builder, thank you for all of the helpful tips!
I don’t know much about this kind of stuff, but I didn’t think buying a new construction home would be that different that a resale home. I guess it does make sense that there aren’t price reductions. The new places does have to be paid off right? I’m not sure if that’s how it works out, but that’s how I think it would work.
There sounds like there’s something really satisfying about moving into a house that hasn’t been lived in before. I think tip seventeen is some very practical advice. I wouldn’t have thought about asking the builders for leftover materials.
I like your tip about expecting changes and asking a lot of questions when you tour a home. My husband and I have been looking at new homes for the past few weeks because we want to move into one to start our family. I think that asking questions about the materials and style of the home would be really useful to the buyers so that know what they are going to be dealing with, thanks!
I really appreciate all 20 of these tips, because I am currently in the process of trying to buy a home that is under construction. I’m actually planning on talking to the builder tomorrow afternoon so that I can take pictures around the property. However, I have not thought of asking for leftover paint, tiles or scraps, but I can see how that could be beneficial to me in the future and so I will ask the builder about what he thinks of that.
You are going to want to check what the homes warranty is, what it includes, and the rest of it’s terms and conditions. With buying a new home, you have to make sure you are getting exactly what you need to have. Some remodels can nullify a warranty as well, so look into how that will work for you.
This is some really great advice for anyone who plans on buying a new home. I had never thought about a lot of these points before, especially things like floor plan. But it makes sense that a lot of the time specific distances and measurements will change over the course of construction. Thanks so much for writing!
This is really great advice for having a smooth home building process. I agree that it is important to not deviate too much from a floor plan. The floor plans that you get to choose from are sturdy, and will ensure that your home is sustainable for a very long time. Deviating too much can change that pretty easily.
great article for new home builders. this article surely help for the poeples those who are all going to build thier new home.
You must first decide what type of home to build. House styles today are as varied as those who live in them. When you see a home that appeals to you, decide exactly what features or characteristics caught your eye. Make a note of these or, better yet, make a quick sketch. Keep all these ideas together in a file. You don’t have to decide how to implement them all yet, but eventually you’ll decide how best to fit these into your home design plan.
Make sure and protect yourself in any new home transaction by using qualified professionals to protect your interests.
Another tip is to find a builder or even contractor by referral. It is best that you know them or an acquaintance of your friend’s or relative’s. Great article by the way 🙂
Thanks, Jenna. I love being able to use referrals when at all possible!
These 20 tips are a great start and perhaps all you’ll need as a buyer of a newly constructed home.
My family and I own a home building business in Peoria, Illinois. The majority of our customers are building their “first” home (or as I like to say, building their dream home). If any potential first-time home builders are reading this blog and comments, I would like to stress that so much of the process should be discussed with your builders. Don’t be afraid to be involved and ask questions!
It can truly be a fantastic experience & tip #20 couldn’t be more true!
What a great comment, thanks! I couldn’t agree more than communication is key in new construction. Unfortunately many of the big builders really don’t value questions directly from their buyers, which is why an experienced agent is so critical to satisfaction with their home. We’re often there to field the basic questions and get necessary answers to all of the others. I’ve handled many a meeting with a construction or site supervisor and a buyer making sure everything was answered and everyone stayed calm, focused, and moving forward to the same goal.
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The choice of materials for a project requires considerations of aesthetic appeal and initial and ongoing costs, life cycle assessment considerations such as material performance, availability and impact on the environment and the ability to reuse, recycle or dispose of the material at the end of its life.
Retaining walls must be used in just one finite emplacement within a yard and may serve as an emphasis wall or center of attention, or if needed, a complete system of tiered walls could possibly be designed to turn a sloped exterior space into eye catching landscape design that is as functional as it is beautiful.
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Thanks for stopping by, Velda. I’ve emailed you privately with some “blog” thoughts!
The best way to save money on construction material is usually to purchase the materials yourself. A good way to know the price of the materials for your building project is to have the builder separate out the cost of labor and the cost of materials. Then you’ll get the flavor for how much the materials are being marked up. If you can live with that, fine. If not, then get the materials list and start shopping!
Check out metallics.Gold, silver or bronze paint can make a bold statement in living rooms and dining rooms. Cover whole walls or just paint trim and molding.
Renovations can produce a great deal of waste if not handled properly. Here you can learn about the management issues you should consider, the availability of green building products, indoor air quality problems that might arise, how to reduce renovation waste and how to dispose of the remaining waste properly.