New Construction Myths
New construction homes can be a great option for home buyers, especially depending on how much pre-existing resales are available.
When considering purchasing a new construction home we typically see 3 options to choose from.
- Production homes - Builder builds on large tracts of land, has a handful of different floor plans and a few different interior options to choose from. With these builders you may have the ability to choose your lot, floorplan, exterior style, and choose from a selection of interior options such as hardware lighting, and more.
Spec Homes - Builder chooses everything, floor plan, exterior and interior finishes. In some cases a buyer may be able to make some small changes but it’s not uncommon for the builder to have already ordered all of the material. Spec homes may be built by production builders or by smaller independent builders that build on single lots.
Fully Custom homes - These are homes where you buy the land, buy plans or have an architect draw them up to your specs and hire a contractor to build it. With fully custom homes you get to choose everything.
In the following videos we will discuss some of the myths surrounding new construction homes.
Myth 1: New Construction Homes Are Always More Expensive
Yes, new construction homes can be more expensive and depending on any upgrades you add the purchase they can be considerably more expensive.
However, when considering the cost of a new construction home you need to figure in the savings that come with a new construction home.
Large ticket items such as the roof, HVAC, water heater and appliances are all new and should be covered under some sort of warranty, plus new construction homes typically have a 1 year builder warranty for builder defects. New homes are also more energy efficient.
Myth 2: New Construction Homes Are Harder to Finance
Fully custom homes can involve more complicated financing, you have the purchase of the lot to consider, you have to get your plan, builder and budget approved by the bank and close on the construction portion of the loan then when the home is finished you close on the home again with new permanent financing. Some banks offer a one time closing, construction to perm loan, to make the process more streamlined.
But with production builders and spec homes the process is a lot simpler. You line up your permanent financing with completion of the home and if the home is already complete then even better. It’s really not that much different than purchasing a resale.
Myth 3: Buying a New Construction Home Takes Too Long
Building a custom home can typically take anywhere from 8 - 12 months depending on how large the home is and how complicated the design is plus there can be material and subcontractor delays.
I’ve seen production builders build homes anywhere between 4- 6 months. Keep in mind that these builders build many homes so they have the process streamlined with their project managers, subs, and vendors.
A spec home may be complete or near completion so there may not be any wait time for construction.
Myth 4: The Options Are Overwhelming
For a fully custom home that can be the case because you literally make all the selections, paint, flooring, trim, lighting, and more plus there are many options on where to get these at.
When it comes to production builders if options are available you typically choose from the selections they offer making the process easier. In some cases they may have a design center with the options displayed or builders have samples available for you to choose from.
Again, with Spec homes you may not have any selections to make as the builder will most likely have the selections made.
Myth 5: Working with a Builder Is a Pain
That’s not really the case with production home builders. They typically have a process and each one can be different so it’s helpful if you work with someone who has a good understanding of new construction and how different builders work. That makes the whole process much smoother.
When it comes to a fully custom home builder it really depends on who you hire and the complexity of the project. Some custom builders are great and others not so much.
Myth 6: You Can’t Have New Homes Inspected
You definitely should have your home inspected prior to closing. It’s easier to get repairs done before closing on the home and you want that third party looking over everything to make sure everything is right, connected, and working properly.
The second time you should get an inspection is prior to the end of your one year builder warranty. Again having a third party look over your home and provide a report to handover to the builder is very helpful in getting repairs made that you may not be aware of.
Before the offer to purchase is created, you must be at least pre-qualified or, better yet, pre-approved by a lender, unless you are paying cash.View Community
Are you thinking about buying? The video resources below cover many of the common questions that most people have during the home buying journey.View Community