Finding your dream home may be challenging in our current low inventory market. You’re ready to purchase a house that has it all - that open layout for entertaining guests, a perfect kitchen or primary bathroom, or that picturesque mountain view. Maybe you’ve been searching for several months, and it’s starting to feel like that home doesn’t exist, or it’s just a little outside your price range. But have you considered looking into new construction?
For the past several years, buying a new build often came with its own unique challenges. Over the course of the pandemic, many construction projects were put on hold due to health and safety concerns. Then between 2021-2022, builders were hit with supply chain issues, which delayed the influx of materials needed to finish their projects. However, these issues may be fading away as many builders are getting back on track this year.
Like any major investment, buying a new build has its pros and cons. But again, in a low-inventory market where dream homes especially may be few and far between, new construction may be the perfect option for you to get all those features you’ve been dreaming about. You also may get more home for your money in certain cases! So, what should you know before deciding to purchase a brand-new home?
Let’s start with the most exciting aspect of buying a new home - it’s new! Everything is fresh, clean, and up-to-date, so you’ll likely have several years before even having to worry about the regular upkeep that can come when buying a home that has older appliances and systems. Also, the new appliances usually come with warranties, giving you some extra piece of mind. On top of that, sometimes you even get to customize certain features, like picking your own flooring, countertops, or paint schemes. It’s probably safe to say that we’d all love to live in a beautiful, brand-new home. And while it may come with a lot of enticing benefits, it’s important to understand the challenges as well.
Affordability & Financing
Buying new construction can cost more than if you were to purchase a home that was previously lived in. Not only that, but with our current mortgage rates, affordability can be even more of a challenge. However, there are also instances when you may actually be able to get more home for your money with a new build. It’s important that you work with your lender to determine exactly how much you can afford. If you’re comfortable with the financials, it may be a great time to buy new construction as you probably won’t experience the delays we’ve seen in years past.
Other than being able to afford the home, you also need to consider the financing available with new construction. Unlike a typical home purchase, you probably won’t be able to get a standard mortgage, as most lenders won’t let you borrow until the build is complete. There are many types of loans for new construction, each with their own pros and cons, so speaking with your trusted lender is critical to understand the financing options available to you. For instance, some options directly involve the builder, so you may need to take the time to research builders you’d like to work with as well. If you know you can afford a new home purchase, selecting the right financing shouldn’t be seen as an issue - it’s just important to ensure you get the best option for your personal situation and preferences.
Now let’s talk about the builders themselves. Not all builders are alike, and you’ve probably even heard some horror stories about companies to avoid. However, there are plenty of incredible builders out there, and picking the right one may be the most important decision you make in this process. To start, it may save you a lot of time to contact your local home builders’ association to get a list of builders in your area.
Once you’ve nailed down some potential companies you’d like to work with, it’s time to do some digging. You should ask the builder a bunch of questions about their processes, timeline for completion, materials and labor used, etc. This initial screening can help weed out some builders that don’t make a great first impression.
You want to make sure you’re working with a builder who makes quality and value a priority. Other than asking them questions directly, another great way to get an idea of their quality of work is to go and see their homes. Drive around one of their recent projects and look at the homes in the neighborhood. A lot of these new developments will also have model homes where you can get up close and personal with features like flooring, cabinetry, major appliances and other finishes. You may even want to drive through on a weekend when homeowners may be outside, and talk to them! Introduce yourself and explain that you’re considering buying a home in the neighborhood, and ask them if they’re happy with their home. “Have you had any issues? If so, has the builder been responsive and timely in fixing the problem? What do you love about the home? Would you buy from them again?” These are all great questions you can ask homeowners in the neighborhood. The more you speak with, the better understanding you’ll have of what it’s like to work with that particular builder.
Buying a newly constructed home comes with a lot of exciting benefits, especially in this current market. With a lack of inventory, a new build could be that dream home you’ve been looking for. Not only could it have all the features you want, but they’re also brand-new! Of course, there are challenges as well, but if you’re in a position to do so, considering new construction may be the perfect option for you.