Buying a brand new home is appealing to many house hunters. You get to pick your floor plan, pick the lot, and get a one year warranty for problems that pop up after the sale. Compared to buying a resale where you may have to change a lot of things to get what you want or settle for a less desirable lot that just happens to have your dream home on it, buying a new construction home can solve a lot of those problems. However, if you aren’t experienced, it can come with it’s own problems, so let’s go over some tips.
Use an Agent
I’m not saying this just because I am a real estate agent. When you hire an agent, they are paid to protect your interests. The sales rep you meet at the model home is hired and paid to protect the interests of the builder. That means they want to get the most money for a home as possible and have it close quickly. This can cause problems such as a recent buyer who was using an FHA loan which has a loan limit. When she went to the design center to pick out her cabinets, flooring, lighting, etc, she went far over that limit, which essentially meant she could not pay for the home. No one noticed that until a week before closing! She had not used an agent, and the buyer almost lost her $15k deposit as a result. Had she had an agent with her everyone would have been reminded that she was only approved for so much and could not go over that. Luckily the builder agreed to lower the house price rather than risk having to put the home on the market and wait for a buyer, but they didn’t have to.
Having your own agent will protect you including making sure the contract is completed as signed, scheduling inspections during the building period to make sure things like insulation, roofing, plumbing, etc is completed as agreed, and guiding you to making good financial decisions that can affect your resale. The builder pays for your agent, which is built into the price, so it doesn’t cost you anything. While many people believe they will get a better deal by not using an agent, the builder will not lower the base price as that would affect their appraisals going forward. So you will still be paying for an agent, the builder just gets to keep that extra money rather than spending it on someone that will protect your interests.
Price Match Upgrades
When you walk into a builder model home you will likely see a lot of upgrades and immediately want them in the home you decide to build. First you need to realize that the price you see for models is the base price before any upgrades. Ask the sales rep how much the model home would cost as it is built and you will likely get quite the sticker shock, so you will need to understand what the base model includes. Then for any upgrades you want to do you will need to consider if you could have it done for less after you own the home. Somethings will make sense to have the builder do during the build such as flooring and cabinetry. Other things may make sense to wait to save a ton of money such as a deck or custom railing. In one new build a recent client did they were quoted $7500 for iron railings. My construction team could do it for $1500 after they closed on the home. That is a huge savings!
Consider Resale Cost
When you buy a new construction home in a community like Snowden Bridge where they will be building new houses for years to come, you need to consider what will happen when it comes time to sell your home. Today most families stay in their homes 7-10 years, but if you are buying your first home and plan to up-size in a few years, or might be relocated for work and need to sell, you will be competing with new homes.
When buyers compare new homes and resales they expect a discount on the resale since it has been lived in and they may want to make changes. If you add a lot of upgrades at builder prices when you buy, you will probably not get 100% if you have to sell quickly unless the community is done building new homes at that point or pricing has gone up overall in a fast moving market. The main attraction of building brand new is of course being able to get exactly what you want! Selling on the other hand is when you want your home to be a fit for the largest number of people possible for a fast sale. Choosing upgrades that will still be popular when it is time for sale is important.
While this is not always an option, many builders in the Winchester area have multiple developments they are building new construction homes in, and believe it or not the pricing for the same home can be completely different in another community, sometimes by $40k or more! Your agent has access to the floor plans and base pricing for every community so they can help you figure out if your plan is available for less elsewhere.
In the end, having an agent may be the most important aspect of shopping new construction homes as they will take into account your future plans, buying power and needs.