To build or to buy? That is a decision many buyers are contemplating as inventory conditions continue to dwindle and home values have continued to rise. So what factors should you consider when making your decision?
While new constructions are a great option - they may not be the right option for your specific home buying scenario. So what are the factors you should consider? One of the most important things to consider is your current living situation and your timeline. While most builders operate on a timeline, as with any construction project, there is the potential for delays. If you’re renting, this could leave you without a place to go. Of course this doesn’t rule out renters from purchasing a new home, however it is something you may want to consider for your leasing terms. Additionally, you will also want to consider how quickly you would like to move. Real estate in general appreciates, however in some cases it can take a few years to recoup the initial cost of building your home, particularly if your home is one with all the “bells and whistles.”
When building a home, you may have noticed signs advertising the starting price for homes in the development - what you don’t see is what that starting price actually provides you as many of the homes you preview will have features and finishes not included in the price. Thus it’s important when considering a new construction to be realistic with your expectations and with this, plan for the price to be higher than what is shown.
As a buyer, it is possible to start the process of new construction without your real estate agent - however realtors experience in the industry will likely come in handy throughout your transaction. A realtor experienced in new construction sales, can help you navigate selecting a builder, can help to make you aware of potentially unforeseen circumstances, and can provide you an unbiased assessment. At the end of the day, the building representative you address is a sales person, and has no fiduciary responsibility to you.
Additionally, although you may have good intentions, if you approach the construction company ahead of working with your real estate agent - you might be leaving your friendly realtor empty handed, as builders often reduce or eliminate their commission even if they help you throughout your transaction.
When many think of a new construction, many think that the homes have limitless potential - however that may not be the case depending on your builder. Custom homes range from templated layouts, where you may select finishes to completely custom homes, designing your home from the bottom-up. It’s important that when choosing a builder, you are aware and consider the various builder types and pricing models, and choose a builder that best fits your end goal.
If you have questions about purchasing a new construction home, please reach out to one of our knowledgable real estate professionals.