Home Buyers! What You Should Know About Purchasing New Construction

28 December 2015
 Categories: Real Estate, Articles

Buying any home can be exciting, but purchasing a brand new property either under construction or just built is a special opportunity for home buyers. There is little that can compare to the feeling of being the first occupant of a new home. However, new home buyers need to be aware of a few things that can impact their future experience with a given property. Below are some of these and how you should handle them as a prospective buyer:

Have professional representation by your side

Despite the fact you can often purchase a new home from the developer directly, it is in your best interest to have a professional real estate agent serving as a representative and advocate. Real estate agents often have an in-depth knowledge of particular builders, and they also can help you navigate the complex construction process from floor plan to finished home. When selecting an agent, be sure to choose one who is experienced working with new construction and who also understands the area where you wish to build.

Investigate the developer

Not all home developers are created equal; that's why you must investigate their backgrounds to determine if they are capable of doing the job. Here are a couple of things you can do that will help you ascertain whether or not a given developer is up to the task:

  • Testimonials - Always ask a developer for testimonials from past customers. Even better, ask them if they can provide you with contact information from customers so you can obtain first-hand knowledge about owner satisfaction or dissatisfaction.

  • Experience - Learn what projects have been previously completed by a developer, and take time to visit the site. Look at individual homes, but also be sure to pay attention to the entire development to get a feel for how well the developer was able to put all the pieces together.

Understand what drives the value of new construction

A common mistake made by home buyers is to believe square footage is the sole driving factor behind the value of new construction. While it is highly important, square footage isn't the only factor at play; instead, the price you can expect to pay for a new home is going to include these variables:

  • Proximity to existing and future development - A new home built close to existing homes and commercial development is probably going to cost more than one built in a more isolated development, with all other things being equal. Also, be sure to consider not only the impact of those features that currently exist, but also know that future development can cause the value of your new home to rise.

  • Prevailing materials in use at the development site - This can include the use of bricks, siding, stucco or other materials that range in cost. Typically, you will find a pattern of material use within a given development, and you should expect the material costs to be consistent from one home site to the next.

  • Utility service providers - The providers of electrical, telephone, internet, gas, cable, water, garbage collection and other services can impact the value of new homes. Keep in mind that new developments may not even have all services available, especially in rural areas, and this will depress the home values.

  • Connection to transportation corridors - New homes built near major road arteries and other routes will be priced at a higher level than those that require "back road" travel for access to needed services.

  • School district placement - The specific school district can be a major factor in home value, so even if you don't have children, keep in mind that a new home in a premier district may be valued at a higher dollar amount.

Obtain a home inspection as soon as possible

Home inspections are considered an important part of the buying process when purchasing an existing home, but it is also to your benefit to have a newly-constructed home inspected. Home inspections add accountability to the building process and can also help catch honest mistakes or omissions made by builders. There is no better time to have a flaw corrected than immediately after the building process concludes, and the home is transitioning from the developer's possession to the buyer's. When selecting a home inspector, seek the recommendation of your real estate agent, and also be sure to find an inspector who has an understanding of new construction and the special challenges they can provide. For additional info, contact a professional.