Can’t find the right house? Have you considered something brand new? Here’s what you need to know!

For the last few years, the biggest theme in real estate has been the lack of inventory on the market.  When our market is imbalanced, it becomes difficult for half the people to meet their goals, and in recent memory it’s been very hard for buyers to find the property they like and have their offer accepted.

For those who are able, buying newly constructed homes can be a way to break out of the “seller’s market rat race”.  If you’re tired of competing with 5 other buyers, offering way over market price, and waiving inspections and appraisals, and still losing out on houses you want, perhaps it’s time to start thinking about another approach!

Buying a new construction home can be an exciting process, but comes with its own set of challenges and complications.   Here are some key steps and considerations to keep in mind:

1. Research and Planning: Start by researching the real estate market in the area where you want to buy a new construction home. Understand the current trends, prices, and available options. Consider factors like nearby amenities, schools, and transportation options.
2. Builder Reputation: Look for reputable builders with a track record of delivering quality homes on time. Check online reviews, customer feedback, and ratings to get an idea of their reputation.
3. Visit Model Homes: Builders often have model homes you can visit to get a sense of their construction quality and layout options. Take note of the features, materials, and finishes they offer. If no model home is available, many times the builder has other properties that have recently finished, or are nearly complete that you can view to get an idea of the type of craftsmanship they put into their product.
4. Choose the Right Floor Plan: Determine the floor plan that best suits your needs and lifestyle. Consider the number of bedrooms, bathrooms, and other essential spaces like the kitchen and living areas. There is a big difference between buying a home that has already begun construction and paying a builder to build a custom home.  The earlier in the process you make contact with a builder, the more control over the final product you’re likely to have, but that doesn’t tell the whole story.  Some builders aver quite strict and only build according to their original plans.  Naturally, it’s important to get an understanding of what kind of builder you’re working with early on so you can have realistic expectations of the process.
5. Customization Options: Inquire about customization possibilities. Some builders may allow you to make certain changes to the floor plan or select different finishes and materials. This can include everything from the type and color of cabinets, flooring, and counters, to light fixtures and paint colors.  Some companies are 100% custom builders, giving you full control of the design process.  Keep in mind that building a home this way can be very overwhelming for some people, requiring a tremendous amount of decisive thought into all things big and small related to your new home.  Many people find it easier to start with a standard design offered by the builder and make modification as desired and allowed.
6. Consider the Setting: A large percentage of new houses are built as part of large developments like subdivisions.  Before committing to a builder in this type of setting, you’ll want to get a feel for the area and decide whether you like the neighborhood, the surroundings, and any amenities offered by the subdivision.  On the other hand, if you are purchasing a vacant lot to build upon, you’ll want to do enough research to understand if there are any restrictions that limit the type of home you can build or any other use you plan for the property.
7. Standard Features vs. Upgrades: Understand what features come as standard and which ones are considered upgrades. Be clear about the costs of any upgrades you might want. Importantly, you should be aware that many builders do not include certain things into the purchase price like landscaping (including a lawn) or concrete walkways and driveways.  While sometimes it’s possible to negotiate for these things, you may otherwise need to budget appropriately to have them finished after closing.  Other things builders may not include are patios and decks and appliance packages.  Lastly, if your builder’s original plan has an unfinished basement, you may be able to negotiate a price for them to create more finished area on the lower level.  Some home buyers prefer to do this because it ensures that the basement rooms will have the same look and feel as the rest of the house because it will all be done by the same builder.
8. Warranty and Inspection: Learn about the builder’s warranty and what it covers. Also, consider hiring an independent home inspector to evaluate the construction quality before closing the deal.
9. Financing Options: Explore your financing options and get pre-approved for a mortgage before making an offer.
10. Timeline and Completion: Discuss the expected timeline for the completion of the home and make sure it aligns with your needs. In Wisconsin, home building is impacted by the inclemency of seasons, and it’s important to understand how the weather, supply chain, and other influences can determine the timeline for your home’s completion.
11. Negotiation: Although builders may be less flexible on price compared to individual sellers, there may still be room for negotiation, especially if you’re willing to buy early in the construction process or if there are other incentives they can offer. (Having a good Realtor can help in this process!)
12. Closing Process: Generally, the builder and your Realtor will work together to organize the time and place for your closing. The documents related to your closing will be created and distributed by the title company.
13. Final Walk-Through: Before closing, perform a final walk-through of the property to ensure that everything is in order and meets your expectations.

Remember, buying a new construction home is a significant investment, so take your time, ask questions, and do thorough research before making a decision. It might be beneficial to work with a real estate agent who specializes in new construction homes to guide you through the process, since your Realtor will usually ask a lot of questions you never even thought of!

If you’re considering the purchase of newly built real estate, we’d love to hear from you!  Give us a call!