Your Need to Know Guide to Buying a New Home
Updated: Apr 16, 2019
If you’ve been following along, you know that last time around we covered a lot of the important things you should be thinking about when buying an older home. They’re great, but they can also be expensive and needy — definitely not for everybody.
Today, we’re looking at buying a new construction home. Although it’s a chance to get the house you’ve long wanted, buying a brand new house can also be fraught with problems.
New Construction Homes and Their Builders
There are no two ways about it, a new construction home can be the best decision you’ve ever made. Not only are they up to current building codes, they’re well-insulated, nothing needs to be fixed — all you have to do is move in and keep your new house clean.
There are essentially two distinct types of builder: custom and speculative.
Custom home builders wait for a person who wants a house built to come along, then they work closely with the home buyer, architects, electricians and other home pros to create your dream home. That being said, custom home builders tend to be on the upper end of your local housing market, but some also cater to people who want a smaller home.
Speculative builders (also known as production builders) build a bunch of houses and hope someone will come to buy them. These folks are generally responsible for creating whole neighborhoods out of thin air. One day, you’re driving by a field, the next week it’s a 100-lot development with 20 houses already going up. Speculative builders are nothing if not fast. You won’t necessarily get the house of your dreams unless your dreams are pretty vanilla, but you will have a home that’s new, up to code and that will keep you out of the rain. Super important, that.
New Construction Pros and Cons
You may be considering a new house, but aren’t sure you’re totally willing to wait for one to be finished. If only there were a place you could get an overview of the pros and cons of buying new. Wait, there’s a list below!
Pros of New Construction:
Owning a brand new house is a pretty sweet deal for most people. Here’s why:
Low maintenance requirements. A new house is, well, new. From the bottom to the top, everything is yours to break in. What this means for you is that you can expect to have several years to ease into learning how to do home maintenance and the bigger ticket items like your air conditioner condenser won’t need replacing (with normal use) for at least a decade.
Warranties on pretty much everything. Did you know that most new homes come with a warranty? Sometimes it’s a builder’s warranty, meaning the builder themselves will fix any problems that crop up during the specified period. Sometimes it’s a home warranty through a warranty company. Either one will help you sleep better at night knowing that you’re not on your own if something breaks.
Less risk of neighborhood blight. Unless you buy an infill home (a new house that’s built in an older neighborhood), new homes virtually guarantee you won’t have to worry about neighborhood blight for a while. Blight can occur in any neighborhood, but it’s far less likely where most of the occupants are owners and the houses are all the same age. It’s the ultimate in peer pressure, really.
It’s a blank canvas. Your new home has never been lived in by anyone, ever. You probably realize that, but it can still be sort of a shock to know that you are the one who will start this particular home on its road to being a quaint and charming place fifty years down the road.
New House Drawbacks:
Of course, a new house isn’t for everyone. There are a few drawbacks to building from the ground up, including:
Higher monthly costs. Unlike an older home, where you may find an owner who just wants to get out from under their loan so they can move across the country, a brand new house is pretty much priced where it’s priced. You’ll have to pay what the builder is asking if you want it, which may push the price of your house to the top of your price range. If you request any changes to the plan of a home in progress, or one that hasn’t had the ground broken yet, you may be asked for a larger escrow deposit in case something happens to prevent your being able to close when the house is finished.
It’s a blank canvas. As noted above, a new house is a blank canvas. For some people, this is pretty intimidating, since that also means that more often than not, there’s not a lot in the way of storage systems or other handy aftermarket items that houses that have been lived in are generally fitted with. You can ask your builder about closet systems that go beyond a single bar for hanging clothing, but generally you’re better off to install these yourself so you can get exactly what you want.
You’re probably subject to an HOA. There’s nothing inherently wrong with a homeowner’s association, but it’s an additional cost that you may not have budgeted for. The additional amenities that an HOA provides are often worth the extra spend to homeowners, but if you’re already tight, it’s going to make things even tighter.
Flexibility is key. Building a house is an exercise in patience. Sure, you think you’re going to be able to move in on February 1, but sometimes things get in the way and construction is delayed. You’ll need to be flexible, otherwise you’ll drive yourself crazy trying to guess when you’ll have the keys.
New Year, New Home?
If you think a new home is for you, your Realtor can recommend some great home builders in your area. Just log in to Ask Live402 and ask for a connection! Your Live402 and Agent Jason Feldman can also help you connect to home pros like interior decorators and architects, the kind of people who will help you and your builder turn pile of lumber into a home you’ll love for a long time.