Buying New Construction
If you know or it becomes apparent after viewing properties that you're quite particular regarding your personal list of "must haves" in a home, your real estate professional may suggest considering new construction since you generally have the opportunity to chose some or all of your personal preferences.
There are multiple ways to go about buying a newly constructed home. Your real estate professional can assist you with your search for new construction homes for sale that are in various stages of completion. These properties may be listed by the builder or developer directly, or by their real estate agent. There are also home listings "to-be-built" that typically require you to work closely with a specific home builder who owns the development, or perhaps with a contractor and/or real estate professional hired by the developer. This option generally opens up a wide range of personal preference possibilities since you'll be involved in the construction process from breaking ground to completion, however you'll need to be prepared to deal with a potentially stressful, rather lengthy period of time until your home is completed. Your agent will be with you from start to finish, providing moral support and helping you navigate through the entire construction process.
The price range of new construction options vary widely to fit a variety of budgets and can include listings from economical modular homes all the way up to the best-of-the-best in luxury homes for sale.
What to Consider
Location, neighborhood, and style: Your real estate agent will guide you through the options that are available—either land for sale, where you hire your own builder to complete the project, or to-be-built listings either on a parcel of land that a builder is trying to develop or within a planned neighborhood development. You will also need to choose the style of home and general square footage. Typically, if your home will be part of a development, there is already a plan in place that dictates a general range of home size, a list of home styles available and a value range the developer has established. In other words, a luxury home development builder will not likely accomodate a buyer who wants to build a small, modest ranch-style home. In the same respect, you probably don't want to build an expansive luxury home in a development of smaller homes.
Cost of the new home: If a builder has a general plan in place, for example, a 2,000 square foot colonial and lot for $550,000, they will likely have a specification list describing what comes standard with the base unit accompanied by a list of upgrades and pricing. You can then sit down with the builder and modify the plans (within reason) to fit your wish list and budget. For example, the standard model might have laminate counter tops, but you may prefer granite throughout. You might want to add a garage or a great room at an additional cost, or you might scale the plans down to 1,500 square feet in order to trim the budget. Once you've narrowed down your wants and needs, it's time to review everything with the builder so your final completion cost can be determined.
- Obtaining financing: As with any loan, it will require lots of documentation pertaining to your earnings, credit status, design plans and final construction cost. On occasion a buyer may have to revise their original building plans in order to obtain lender approval if the final cost exceeds their affordibility or the appraised value falls short. Patience and flexibility are helpful throughout the loan process. I would recommend checking out my guide on obtaining a mortgage in order to access some valuable financing information.
Once you've settled on a final design and obtained your financing, it's finally on to construction. This may be the most rewarding period as you see your dreams and wants on their way to becoming reality. Changes in design or product choices should be kept to a minimum in the interest of time, cost, and everyone's peace of mind. But in the end, you will get the keys to the home you always pictured.