Buying New Construction: What You Need To Know
New construction homes are a popular choice among home buyers for a number of reasons. There’s something to be said about being the first owner of a home and moving into a property that’s in pristine condition. New construction can include single-family homes, townhomes, condos, and even multi-family homes. If you’ve been thinking about purchasing new construction for your next home, here are a few things you need to know:
Not all builders are created equal
The experience you have when buying a new construction home can vary greatly from builder to builder, so it’s important to do your research. Some builders offer better warranties, incentives, customization options, workmanship ,and general customer service than others. If you’re unsure of your chosen builder’s reputation in your area, contacting a local REALTOR® is a great place to start.
You should still use an agent to represent you
Piggybacking off of the last point, I highly recommend buyers choose an agent to represent them through the new construction process. The sales representatives for builders, as nice as they are, have a duty to represent the best interests of the builder. Having an agent on your side ensures you have someone looking out for your best interests as well as you navigate the process. Additionally, buyer’s agents will be paid a commission from the builder, so their service is of no cost to you.
You are entitled to an inspection (and you should absolutely get one!)
Home builders have their own inspection process, but they generally do not share those reports. Once you’re about a month out from closing and your home is mostly or totally completed, it’s important to have your own inspection done to ensure you’re comfortable with the home you’ll be moving into. While uncommon, I have seen instances of poor workmanship in new construction homes that caused big problems down the road that could have been fixed by the builder prior to closing had the buyer had their own inspection.
Your negotiating power is limited
Unlike buying a resale home, your ability to haggle for a better deal on a new construction home is very limited. Rarely do builders come down on price, and almost every home upgrade will cost you. Builders operate with their own contracts and their own bottom lines they need to hit.
Your closing date is subject to change
When you sign a contract with a builder for a new construction home, unless the home is already completed, your closing date can change. Weather, supply chain issues, and a number of other factors can prolong the completion of your new home. This can make the process very lengthy and unpredictable at times. It’s important to work with a builder who prioritizes communication, so you know what to expect.
Be aware of metro districts
Many new construction homes in Colorado are built in metro districts. These are special entities with taxing authority formed to fund public infrastructure for new development without burdening the existing taxpayers of that city or county. What does this mean for you as a buyer? Your property taxes will be higher if you live in a metro district. Many districts offer great amenities for these increased taxes, such as communities centers, schools, recreation areas, pools, and more. But, it’s important to do your research. Just like builders, not all metro districts are created equal.
If you’re thinking of buying new construction, a great first step is to talk to an experienced agent. I’d love to help you navigate your journey towards owning a brand new home. Reach out below for a totally complimentary, no-pressure consultation!
