There are essentially two options when it comes to purchasing a new home: buy a pre-existing home or build a brand new one. There are pros and cons to both options, of course, but building a new construction home is the only way to truly get what you want for your home and is particularly appealing if this is going to be your Forever Home.
When you go with a new build, you have the advantage of getting exactly what you want without the hassle of searching through copious homes that other families have already broken in. This exciting process can be intimidating, for sure, but with some research and a bit of know-how, it can be quite an enjoyable experience!
The following is a guide to purchasing your new construction home and includes a step-by-step guide to the process, questions you’ll want to consider, and a few tips to save money on what can add up to be a pricey purchase.
A Step-By-Step Guide
Step 1 - Acquire an Agent
Many people think that you don’t need a real estate agent if you’re building a home, but it’s recommended to have a buyer’s agent represent you. Find someone who is familiar with new construction builds and who will work well with you to get exactly what you want out of your dream home. With an agent by your side, someone who knows just what questions to ask and has plenty of connections and recommendations for your benefit, the whole process will be much smoother than if you take it on on your own.
Step 2 - Find the Right Lender
Not all mortgage brokers will offer home construction loans. These loans differ from the traditional mortgage as the construction loans are released in the form of draws throughout the construction process rather than all at once. Builders will typically have a list of recommendations to lenders who provide this service or you can do your own research and meet with your financial advisor to find someone who will get you the loan you need.
Step 3 - Research Builders
Take the time to do your research on a number of builders. Not everyone is the same and much of the time, you do get what you pay for. Look up online reviews, ensure they follow local building codes and check into companies with whom they partner. Find yourself a builder who is going to work with you to create everything you envision and will do so at a fair price.
Step 4 - Visit the Home Site
It’s important that you’re familiar and happy with your potential new neighbourhood. Arrange a time to check out the project sites and scope out your new surroundings. Look into nearby schools, grocery stores, and other amenities that are important to you. Inquire about potential commercial expansions or any future plans for additional residential buildings that may encroach on your territory. Look into the demographics of the area you’re looking at, make sure it’ll be a good fit for you and your family.
Step 5 - Start Designing!
The fun part of choosing to buy a new construction home is picking out the style that you like best. Plan your home to suit your lifestyle; will you need plenty of bedrooms for your budding family? Do you want a cozy bungalow to spend your retirement years? Do you prefer open floor plans complete with floor-to-ceiling windows to soak up all that natural light? There are so many options when it comes to building a home that you can pick and choose to fit your exact specifications.
Step 6 - Choose Your Standards and Upgrades
All of your standard items include things such as flooring, paint colours, cabinets and countertops, light fixtures, and tiling. All these basic amenities that every home needs to have. The upgrades are all the little splurges you want to sink your teeth into! If you want the fancy appliances in your kitchen, factor them into your budget. It’s easy to get carried away with the upgrades, so if you’re on a strict budget, be very picky with what you choose to splurge on. You’ll be living in this home for the foreseeable future, so be sure you’re getting exactly what you’re looking for.
Step 7 - Get a Home Inspection
Even though your house will be brand new, you’ll still want to get an inspection done before you officially close the deal and move in. If the builder happened to miss something or didn’t live up to your expectations, now is the time to get that taken care of. Home inspections can be done all throughout the building process to ensure each stage of the build is going according to plan. Home inspections are an important and necessary part of the home-building process, whether you’re purchasing an existing home or building a brand new one.
Step 8 - Interim and Final Occupancy
This is an exciting stage during the closing process, it means your home is almost ready for you to take over! Your lawyer and real estate agent will help you through the final stages of the home-buying experience. Interim Occupancy means the house is just about ready for you and you’ll need to take care of any outstanding deposits and payments. The Final Occupancy is when your ownership will officially take place. At this time, your mortgage payments will commence and all builder fees will need to be paid before the contractor can sign over the house to your name.
Step 9 - Time to Move In!
At this point in the process, all the Is are dotted and the Ts are crossed. Your home is officially your home! The last step of the building process includes you taking ownership and moving into your beautiful new home! Sit back, relax, and enjoy the home created especially for you!
Questions To Ask Your Builder (Early On)
It can be overwhelming to take on the process of buying a new construction home. It’s easy to get lost in the whole ordeal, sometimes it’s best to have a written list of questions before you meet with a realtor or a builder. Some questions you may want to jot down include:
How long will building take? It’s important to keep to a schedule when building a new home, particularly if you’re planning your current lease around the building process. Something many people don’t think about is permits; ask your builder if the build time is inclusive of acquiring the necessary building permits.
Is the lot included in the costs? Sometimes when you’re picking from a model home, you can get swept up in the base cost of the house, the interior, and exterior features, and may forget about the land options. Larger lots may add to your expenses.
What are the standard finishes? The builder may present you with the best of the best, including top-of-the-line appliances, fixtures, and finishes. Be sure to inquire about the base model options and then you can add on and upgrade from there. The design stage of your house will come later, so it’s best to know what kind of costs you’re looking at upfront in order to factor in the items you wish to splurge on in the later stages.
Can you purchase your own appliances? Just because you’re working with a certain contractor or builder, doesn’t necessarily mean you have to work with every vendor they recommend. If you want to do some research and find your own appliances or you have custom features in mind that the builder doesn’t offer, ask if it’s ok to bring in your own sources. Some builders will be more lenient than others when it comes to outside vendors, so be sure to find out right away what they offer and how flexible they are.
Is landscaping included with the build? Depending on your lot size, you may have the opportunity to get creative with your landscaping. Some builders will offer basic landscaping services and others leave it completely up to you. You’ll want to be sure of what you can expect with your finished home.
It’s Possible To Save On New Construction Homes
Despite what some might think, building a new home doesn’t have to cost an arm and a leg! Sure, it may cost more to build initially than to just purchase an existing home, but think long-term. When you build a brand new house, you won’t have to worry about repairs and renovations, you won’t need to tear down and reconstruct, you’ll be getting exactly what you want in the first place. When it comes to the initial building costs, here are some handy tips to keep in mind in order to keep expenses down:
- Plan a budget and stick to it: Before you even begin to design your home or meet with contractors, sit down with a financial advisor to determine what kind of budget you can afford. Factor all costs into this budget. This allows you to splurge in some places and scale back where necessary.
- Choose the right builder: Not all builders are the same. You’re going to want to research and compare several different builders, preferably ones that come highly recommended in your area. Compare quality as well as cost, as in many cases, you get what you pay for.
- Inquire about closing cost incentives: Some builders offer incentives if you select their preferred lenders, this can include a few thousand dollars off of your closing costs.
- Is it possible to DIY?: A great way to skip costly prices is to just do it yourself. If you’re handy and willing to put in the time and effort, there are plenty of ways to save money.
- Research your appliances: There are so many options when it comes to appliances, from basic models to fancy upgrades, from different finishes and matching sets. Do your research, read the reviews, and find what will suit your home best. Keep in mind, you can always stick to the basics for now and upgrade later on down the road.
- Look at energy-efficient options: More and more, builders are offering green options when it comes to appliances, heating, plumbing, etc. These energy-efficient options may seem like the more expensive route, to begin with, but over the years they could save you a lot of money on utilities!
Buying a new construction home can be an affordable and wonderful experience for all home buyers. Don’t let the lengthy process or the seemingly endless array of decisions that come with it intimidate you. With the right agent to guide you and the proper research when it comes to builders, appliances, and styles, you’ll end up getting the home of your dreams, custom-made, just for you that suits your exact lifestyle and preferences!