Buying a new construction home can be an exciting adventure. The idea of being the first person to live in a brand-new home is something that many people dream about. I did it myself for my first home purchase! However, before you sign on the dotted line, it’s essential to weigh the pros and cons of buying a new construction home. Here are some things to consider:
Pros of buying a new construction home:
Everything is brand-new
A big pro of buying new construction is that no one has touched a single thing in the house! The house is built with modern materials, new appliances and fixtures are installed, and the surfaces are in pristine condition. Because everything is brand new, you’re less likely to be burdened with surprise repairs. If there’s a problem in the first year, most builders offer a free home warranty that will cover the cost to fix almost anything.
No bidding wars
It’s first come, first served. When purchasing a new construction home you can walk in their office, sign a contract, and as long as you abide by the language in the contract, the home will be yours! You will avoid competing against 20-30 other offers that may take the home’s final cost to 20-30% over the list price.
New construction will make the house and everything in it more energy-efficient. The builders will install modern windows, improve insulation, install more efficient heating and cooling systems, and use appliances that consume less electricity and water.
Built to today’s standards
New construction means the building is built to today’s standards. People marvel at the craftsmanship and detail of older homes… but remove the sheetrock to inspect the electrical work or crawl under the house to inspect the plumbing, and you’re likely to find some issues. Sadly, the problems you find are going to be pretty costly — at least a couple thousand dollars per repair.
You can personalize the house to suit your tastes. New construction allows you to choose the finishes that you want, therefore eliminating the added cost you’d have to pay to renovate.
Cons of buying a new construction home:
Not all builders are created equal
You have to vet the builders! As with everything else in this world, not all (fill in the blank) are created equal. Same goes with builders. If you want to be sure that you’re hiring someone who is going to their job and do it well, you need to vet the people that you’ll be working with. If you don’t do your research, you could wind up with a newly constructed house that is riddled with problems, code violations, and more, so do research on any builders you interview. However, as a real estate agent it is our job to know the builders and their reputation.
The Fine Print
When researching the pros and cons of buying a new construction home, this one is a big one. It may be tempting to go at it alone, without the help of a real estate agent. And the builder or their representative may even tell you that you don’t need an agent, or that you can save money if you don’t use one. But this is a big RED FLAG. It’s important to keep in mind that the builder’s sales representative works for the builder, not for you. So if you do not use an agent, you are unrepresented and the fine print often will limit your ability to use one once you’ve even toured the home without one! Make sure to check out this post on the other issues you may face if you decide to purchase a new construction home without using a real estate agent.
A real estate agent can help you navigate the complexities of the new construction process. From negotiating the contract and reviewing the warranty, to helping you understand the potential resale value of the property. They can also help you identify any red flags or potential issues with the builder, ensuring that you make an informed decision and avoid any costly mistakes.
Less room for negotiation
With most builders you will not be able to negotiate the base price of the home. However, the right agent may be able to help you negotiate for the free upgrades you want, or for better financial incentives.
Personalization can get expensive
As you’re looking through a model home, you have to keep in mind that it’s going to have the best features, fixtures, and appliances the builder has to offer. To have all of those upgrades in your home could end up increasing the price tag by $100,000 or more! The design center is the profit maker for vendors, so make sure to choose upgrades that will also add value to your home.
Options are not endless
You maybe able to pick out the flooring, color of cabinets, and what fixtures you would like. However, your selections are not endless on what you can modify. You will likely not be able to change any major structural component. Or you may not be able to add that fireplace to the living room, or put in that skylight in the primary bathroom before you move in. Always check to see what options are available to you and what you cannot change.
Move-in date isn’t guaranteed
On average, it takes approximately 10 months to build a home from start to finish. However, material shortage, bad weather, or crew issues can hinder production and cause delays in your move-in date. These delays can be problematic if you have a particular timeframe for moving.
For more information on what to avoid when buying a new construction home, check out this article at Bankrate.com: Buying new construction? 5 costly mistakes to avoid
In conclusion, buying a new construction home can be a great option for those looking for customization, energy efficiency, and modern amenities. However, it’s essential to consider the potential downsides, such as limited location options, construction delays, higher costs, and unforeseen issues. As a real estate agent, it’s my job to help you navigate the pros and cons of buying a new construction home and help you make an informed decision that’s right for you. If you are interested in discussing purchasing a new home I’d love to help answer any questions you may have! Reach out anytime!