Is New Construction Right for You?

Some home buyers in today’s market are frustrated.  There are so few homes on the market and they are competing with many other buyers.  Some buyers are opting to buy a new construction home.  There are some benefits and some issues to consider.

Benefits:

Many of the developments building large tracts of homes, have models built.  Buyers can walk through the complete house to see the layout.  Buyers can then select which floor plan they want to buy.

Many builders may offer upgrade options so buyers can customize the home to their liking.

Builders may also offer money towards closing costs if the buyer uses their preferred lender.

Things to Consider:

Builders may release a few lots each week.  Buyers will have to put money down and get on a waiting list for a future release date.  This is because builders have a limited number of workers and have to control the workflow.

As seen in the past year, there are supply chain issues.  For example, windows and doors have been back-ordered for months.  A buyer needs to be aware and flexible because a completion date is only a target.

Inflation is also a factor to consider.  As material costs increase, so does the cost of the house.  A buyer needs to be very aware of the language in the contract.  Some contract language allows builders to increase the price of the house.  This means, a buyer may agree to buy a house for $350,000, however, due to the higher cost of materials, the house may cost $375,000.  the buyer either has to agree to the higher price or walk away from the contract.

The contract language is very important and needs to be understood.  there have been cases in which builders had language to cancel the contract.  The builder would return the deposit money and sell the house for a much high price.  BUYER BEWARE!  

Do not assume that because it is a newly constructed house that it does not need a home inspection.  Workers make mistakes.  It is worth the few hundred dollars to have the home inspected.  I have been in a newly constructed home in which the windows would not lock, the plumbing was not working properly and all the outlets were not working.

A final word about newly constructed homes.  There are several large builders in the area.  Among them are D H Horton, Lennar, Centex and Taylor Morrison.  A buyer should check the reviews for customer service for these different companies.  If a buyer has an issue, the buyer will want it addressed and corrected quickly.  This is a function of customer service.