The Top 10 Steps to Buying a New Construction Home
Are you dreaming of a brand-new home from a builder like DR Horton, Lennar, or a local favorite? Buying new construction can be an exciting journey, but it’s a little different from purchasing a resale home. Here’s a step-by-step guide to help you navigate the process and avoid common pitfalls.
1. Get Pre-Approved for a Home Loan
Before you start touring model homes, get pre-approved for a mortgage. This isn’t just about knowing your budget—it’s about being ready when you find the perfect home. Builders often have “preferred lenders,” but don’t feel pressured to use them. Shop around for the best rates and terms. If your new home will take months to finish, ask lenders about extended rate locks or float-down options in case interest rates drop before you close.
2. Hire a Realtor to Represent You
Don’t walk into a builder’s model home alone! The onsite agent represents the builder, not you. Having your own realtor ensures you have someone on your side, guiding you through contracts, negotiations, and even helping you discover communities you might have missed. Best of all, the builder typically pays your agent’s commission, so it won’t cost you extra.
3. Start House Hunting
This is the fun part! As you tour homes, ask about completion timelines—especially if you’re on a tight schedule. Remember, model homes are often decked out with upgrades that aren’t included in the base price. Make sure you know what’s standard and what’s extra so you’re not surprised later.
4. Make an Offer
Unlike resale homes, builders usually expect to get their list price. You probably won’t need to offer above asking, but be prepared to put down earnest money. Also, expect to sign both state and builder-specific contracts. Read everything carefully, especially the sections about inspections and making changes to the home.
5. Schedule a Home Inspection
Even brand-new homes can have issues. Hire a professional inspector—ideally when the home is nearly finished—to check everything from outlets to light switches. City inspectors don’t look at every detail, so this step is crucial.
6. Be a Considerate Buyer
It’s tempting to visit your new home every day, but try to limit your trips to the construction site. Too many visits can disrupt the contractors and slow down progress. Trust your realtor to keep you updated.
7. Create a Punch List
After your inspection, make a list of any repairs or touch-ups you want the builder to address before closing. Most builders will handle these items a few days before your final walkthrough.
8. Time the Appraisal Right
About two to three weeks before closing, let your lender know you’re ready for the appraisal. Don’t do this too early—if the home isn’t finished, the appraiser will note missing items, which could mean extra visits and fees.
9. Secure Home Insurance
Good news: insurance premiums are often lower on new homes because everything is up to code and brand new. Shop around for the best rate, and enjoy the benefit of a new roof and modern systems.
10. Closing Day
Depending on your state, you’ll close at a title company or attorney’s office. You’ll sign documents, pay your closing costs and down payment, and officially become a homeowner. Remember, you can choose your own title company—don’t feel pressured to use the builder’s or realtor’s preferred option.
Buying a new construction home is thrilling, but it comes with its own set of steps and insider tips. Follow this guide, lean on your realtor’s expertise, and soon you’ll be turning the key to your brand-new home. If you have questions or want to get started on your new home journey, reach out—I’m here to help you every step of the way!