5 Tips on Buying New Construction Homes for First-Time Buyers

November 14, 2019
Last updated:
January 13, 2022
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Should you choose new construction, it is important to note that purchasing a new construction home is vastly different compared to buying an existing property. However, having full control of the customization of the property means you can create your dream home. And because there is no previous owner, you do not have to deal with the “horror stories” that are typical with used home purchases.

Buying a new construction home? Here are some tips for buying new construction homes for first-time buyers.

1. Choose a Reputable Home Builder

Not all home builders are the same, so choosing the right home builder for the type of new construction home that you want will make explaining the things you want easier. A good builder will be able to build the home the way you want it while bad ones will give you unsatisfactory work and high costs. For this reason, you need to shop around and look for the right home builder for the job.

When buying new construction homes for first-time buyers, you should create a list of potential builders by getting some referrals from family and friends or searching online for recommendations. Shorten your list by looking for online reviews or talking to previous clients. Most importantly, choose a home builder who is licensed, bonded, and insured. The license ensures that the home builder has the expertise to work on your home while insurance protects you from potential liabilities.

2. Hire a Real Estate Agent

The sales representative for the new construction home may seem nice and helpful but that doesn’t mean you should close the deal right away. Don’t be intimidated by their high-pressure tactics to get the sale. Remember that the sales rep works for the builder and thus protects the developer’s interest. You need your own agent who will look for your own interests and check the fine print to get you the best deal.

As your representative, your real estate agent is responsible for telling you the benefits and risks of the transaction. They will read the builder’s contract carefully to clarify the legal terms and point out the things that you may have missed. You also don’t have to worry about compensation as it is the builder that pays the agent’s commission.

Related: How Hiring Real Estate Agent Can Save Your Money

3. Identify Which Features Are Standard and Which Are Extra

Visiting a builder’s showroom will give you an idea of how your finished home will look like. However, not all the amenities and features that they are showcasing will be available in a basic home. That is why it is important that you check the feature sheet of the sample homes you are interested in and identify the features that are for the basic home and those that need to be upgraded.

Extra upgrades will incur more costs and the markups tend to be huge. It may be possible for you to hire a contractor and build the upgrades after the home is finished to save money. Your real estate agent may also negotiate with the developer to get you discounts if you really want the upgrades.

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4. Be Careful When Selecting New Construction Home Upgrades

While getting upgrades with your builder tends to be expensive, it is still more convenient to get upgrades straight from your builder. Here are some things to keep in mind when getting new construction home upgrades.

  • Take note of time-sensitive new construction home upgrades. Some upgrade options vary depending on how far along your home is in the construction process. For example, you may not be able to choose some structural upgrades when the foundation and layout are already finished.
  • Don’t exceed your loan qualification amount.  Again, new construction home upgrade markups are huge. Even if that extra bed and bath will be a great addition to your home, you may exceed your maximum loan qualification if you add it. Always check with your mortgage lender when considering some upgrades.
  • Consider upgrade options that increase your property value. Investing money in new construction home upgrades is reasonable if you think they can increase property value and help you sell the home in case you move in the future. Some of the upgrades that are good bets include hardwood flooring, upgraded kitchen, and even smart home technology.
  • Choose what makes you feel happy. At the end of the day, you and your family will live in the home you are building. It is important that you choose the home upgrades that will make you live comfortably and happy overall. New style trends change and the value property upgrades add to your home will fluctuate, so if you are not really planning on selling your home in the future, select the features that fit your lifestyle and personal preferences.

5. Perform a Home Inspection.

A home inspection is not just for pre-existing properties but for new construction homes as well. Just because a home is newly built doesn’t mean that it is free from defects. There are plenty of things that even seasoned builders miss or build improperly. Also, make sure you check if there are any pending liens and other issues with the contractors who built the house. For this reason, you need to perform a home inspection after the job is done.

Issues such as leaking plumbing, structural defects, as well as HVAC and electrical issues can be easily noticed by an expert home inspector. Additionally, you may protect yourself further by getting a builder’s warranty that covers at least one year after moving to your new home.

Buying new construction homes for first-time buyers is a challenging undertaking. There will be delays, a change of plans, and other unforeseen circumstances that you need to take into account. But by choosing the right team of expert home builders and agents as well as planning your home upgrades carefully, the entire new construction home building process will be easier. Keep these tips in mind and you will be a step closer to your dream home. Good luck!

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Need a Mortgage to Buy a New Construction Home?

If you’re in need of a mortgage, Sammamish Mortgage is here to help. We are a mortgage company serving the Pacific Northwest region including Washington, Idaho, Colorado, and Oregon. We have been providing mortgage programs with flexible qualification criteria to borrowers since 1992. Please contact us if you have any questions or are ready to apply for a home loan.

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