Purchasing a new home can be one of the most memorable times of a person's life. I speak from experience as a consumer and also helping buyers purchase new homes. Here are few considerations to keep in mind:
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Re-sale Value Impact.
If you decide to sell your new home before the development is completely finished, you will be competing against the builder's inventory of remaining lots and even spec homes (if underway). This can sometimes have a dramatic negative impact on your resale price if you are competing for limited buyers, as many buyers will always choose to build, provided they have no time constraints. The value of a home BEFORE a development is finished versus AFTER can be significant, depending on relative strengths of the development after build-out is complete. -
Length of Ownership.
You need to try and determine, to the best of your ability, how long you plan to own your new home. If you are one of the first ones in a development and have to sell before the development is complete, your re-sale value will most likely take a hit. If you are one of the last ones in a development, but still need to sell right after the development is complete, you also have more financial risk as homes often cost more during the last phase of development, versus the buyers who purchased early on. -
You are paying a premium.
Plain and simple, you pay a premium for a new home, all things being equal. Why? Land costs more, materials cost more, labor costs more, infrastructure costs more, loans costs more, overhead (corporation itself and various sub-contractors). -
Upgrades.
By the time you are done selecting your various options and how you want to outfit your new home, you will be in sticker shock for the difference between the base price of the model versus what YOU end up paying for it. There is a HUGE cost to "having it your way." This is where builders REALLY make their money. -
Real Models versus Paper Models.
Ensure you have actually walked through the floor plan you select from the builder's various options. How it looks in 2-D on paper versus real life can be world's apart, and if per chance you buy it, sight unseen - you may find yourself completely depressed if the paper doesn't live up to reality. -
Don't finish that basement for 12-24 months.
A new home an extensively HIGH level of moisture and chemicals in it for the first year or two as concrete basement walls and floor slab cure, paint cures, and the various materials throughout the home settle into place. If you choose to have the builder finish the basement and there ends up being a problem with water intrusion or cracking foundation walls, you may never know it. Even normal settling can stress drywall and create nail pops and framing cures and twists a bit. If you were to run a dehumidifier constantly in an unfinished basement of a new home, you would be shocked at how much moisture is pulled out on a daily basis. Do you want this in your new carpeting, drywall, and insulation behind the drywall? -
Install a Radon Mitigation System.
Hopefully the builder will do it for you, but if not, ask if they will do it and add it to the price, it will cost less, increase the marketability of your home during future resale, and provide peace of mind if you do use your basement. -
Install rough-in plumbing if not standard in the basement.
Most builders will install rough-in plumbing in the basement so a half or full bath can easily be added afterwards. If they don't by default, ask them to and pay for it, it will cost you much less in the long run if you decide to install a bathroom. -
Window Treatments, Landscaping and the kitchen sink.
Okay, the builder will definitely install a kitchen sink, but by the time you are done outfitting your new home with window treatments, landscaping, a deck/patio, furniture, plumbing/electrical/cable changes, custom painting, and a host of other things, your head will hurt and how quickly the costs can add up. Rule of thumb: Whatever you plan to spend, double it and you will be in the general range!
Please also view the: Selling Considersations for New Construction
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