Buying New Construction

A while back, I had a nightmare of a transaction. Not my best moment as a new agent, but in this business you learn from your mistakes. My client found a home in a new sub-division and took it upon herself to investigate a new home being built there. She was determined to meet with the builder and talk plans. All great, right? You would think. I sometimes think that clients don’t understand what it is that we do as agents in representing them and this was just the case.

I took the initiative to sit down with her and the builder to talk of the plans for the new home. When she arrived to the meeting she brought her “amendments”. To make a long, convoluted and frustrating story short, she became the realtor and I became the blame for all things that went wrong due to her wanting primarily a new custom build.

Due to the lack of inventory here in RVA, contractors can’t build homes fast enough to satisfy the desire to live in prime locations with great schools. In my case, my client wanted to build her dream home in a planned sub-division. Keyword here is PLANNED. Buying a home has its process, but buying new construction requires slightly different criteria. Here are some tips to know when buying new construction.

LISTING AGENT: The listing agent works for the builder, NOT you. They are more about quantity than they are about finding you your dream home, hence why you should have a agent to help you be a liaison and communicator. In my particular transaction, I was cancelled out and both myself and the listing agent had to do a lot of damage control pacifying frustrating conversations with the buyer and the builder.

PRICE: New construction comes at a “base” price. For example, the home you want starts at $410,000 which will include certain features, but will also give options for upgrades. All those “options” add up. If you choose to go outside of the “included” fixtures.

“Builders rake in the cash on upgrades because they can get parts and labor relatively cheaply. The markup is huge, so investigate each option you're considering to see whether it would be cheaper to bid it out after you move in.” - HGTV

Decide on these things early on in the process, you should get a sheet with all the features and pricing for the vendors they stock with. Also note that in times like these, demand is high and materials are scarce which tends to up the pricing.

FEATURES. You can have whatever you want. Some builders will cater to a client’s customized build, but NOTE, having whatever you want does not mean your price will stay the same. You want gold fixtures, it’s going to cost you. You want to change the plumbing logistics? It’s going to cost you, not just in supply, but also labor. Builders tend to work with options they have already in place, you have choices, but they are determined choices of the builder’s stock. When you go outside of those choices and a builder agrees, you still have to pay for those upgrades. It is best to stay within the features list of options, fi you want that Khoeler shower head but they are using Ferguson’s, take the Ferguson. You can change it later and probably at a cheaper cost.

KNOW THE MASTERPLAN. When there are just a few houses in the neighborhood, it’s easy to envision your own little realm. It’s best to ask what the plans for the neighborhood is and all it’s amenities. Will there be a pool? How close will my neighbor be? Will I be able to build a privacy fence later? These are good to know as the community grows.

HOA: Speaking of plans, most of these communities will have an HOA. Getting those docs and knowing what will be allowed and permitted on your property is vital. Also, cost is a factor here. Are you going to be paying for full maintenance of your property or just the common areas? Will it be $300 a month or $160.

THE BUILDER. Make sure it’s a reputable builder. Do your research or have your agent do it, they should be able to see if there’s any issues or complaints about them. You also want to make sure they do quality work and work with materials that are going to last.

INSPECTIONS: Most new builds are inspected in order to pass codes and such, but it is advised that you have your own inspection as well. Some new builds also come with a Home Warranty, but some do not and your agent should make sure you are protected from any defects the home may have as well as the hardware it comes with. These inspections you provide will be more thorough.

IF you are looking for a customized build I highly suggest you buy a piece of property somewhere and hire your own builder. It is what my client should had done considering all the upgrades and changes she made to the planned construction she had purchased. Allow your agent to negotiate and advocate for you, they can give you real knowledge when dealing with new construction and know what to look and ask for.

If you are looking to buy a brand spankin’ new home, please contact me today!