Things to Know Before Putting in an Offer on a New Construction Home
The idea of a new construction home is definitely appealing, but it’s important to remain realistic about your expectations. New construction transactions work differently from resales. Builders are not like regular sellers in that they have no emotional attachment to their listings. Their main concern is to make a sale. Consider the following before putting in an offer on a new construction home:
1. You Will Probably Pay the Full List Price
Unlike resale transactions, there is usually no back and forth negotiation on a new construction home. Builders dislike lowering prices because it sets a lower precedence for future sales. If the builder has inventory that has been sitting for a while and needs to move, you may be able to talk them down from their original list price. Search for homes that have been on the market for 45 days or more.
2. You can take advantage of incentives.
The builder’s #1 goal is to get you to purchase the home at list price. In order to make that happen, oftentimes they are willing to compromise. They can sweeten the deal by agreeing to make upgrades at no additional cost or offering to help with closing expenses.
3. Your home won’t look exactly like the model.
Model homes are always outfitted with the best appliances, fixtures and materials. The purpose of this isn’t to mislead you, but to help you imagine what the finished product can look like at its very best. Standard home configurations usually involve cheaper materials. Keep in mind that selecting the more expensive options can save you more money by eliminating installation fees.
Once a new construction community nears completion, the model home may go up for sale. While it’s still a new home since nobody has lived in it, remember that the model home has seen a lot of foot traffic. Hundreds of prospective buyers have walked through, and the builder might have even used it as an office prior to going up for sale. Since the home is already built, you also won’t get the option of customizing it beforehand. If none of those things bother you, you’ll be getting the best house on the block with all the top-of-the-line features.
4. You can—and should—work with a realtor.
Most new construction homes are staffed by realtors who work directly with the builder. It’s a good idea to bring in your own agent, who will represent your best interests and point you in the right direction. A good agent should also be a neighborhood expert, and will likely be familiar with the builder’s past listings. Once you decide you’re ready to buy, your agent will help you put together an attractive offer.
5. Expect to still encounter issues.
Just because a home is newly constructed, doesn’t mean it won’t come with any problems. Ask your agent to put you in touch with a reliable home inspector who will ensure that everything is built safely and up to code.
Comments(3)