When it comes to buying a home there are a few differences in buying pre-owned and a newly built home. But surprisingly there are more similarities than differences. The biggest differences would be the age of the home, and it is probably a little easier to purchase a newly built home.
Why buy a newly built home? Well that all depends on the buyer. But there is one risk you do not have to take when buying a new home, and that is you don’t have to worry about the age of the home and how long the home, and the things in it will last. A lot of new homebuilders offer an extensive warranty on the home. They offer a walk thru at 90 days and a year, so they can patch up anything that might have gone wrong within that amount of time. They also offer a structural warranty on the home which can range anywhere from 10-30 years on the home. But most new homes do not need a structural warranty on the home for 30 years, because if something structural is wrong with the house it will show up before 30 years. So if the ease of knowing that the home is backed by the person or a builder is important, then building a new home is the best bet.
Buying a newly built home can be pretty simple. All the paperwork, financing, and closing are all taken care of through the builder. Realtors are always welcome to help through the buying process, they can help explain the contract and mortgage so that the buyer better understands it. The builder pays the realtors, because they help bring customers to them. The best place to start when purchasing a newly built home would be a realtor. Seeking out a realtor will save time and energy. When the right realtor is found then the decision on where to live needs to be made, and the realtor is probably the most informed person in your area when it comes to location. Things to think about when choosing where to live are really no different than buying pre-owned. Things like which school district to choose, how much house can you afford, and in general what kind of neighborhood are you looking for, are the same things that would need to be considered whether purchasing pre-owned or a newly built home.
Once the neighborhood is chosen then the realtor will set up an appointment with the sales consultant in the model home in that neighborhood. The sales consultant is hired by the builder to sell the home, they only handle selling the home, they are not responsible for the building process nor are they responsible for the financing. If the plan is to get financed through the builder then the sales consultant will submit the application, but their main job is to help through the selling of the home. They are also responsible for putting together the purchase agreement, and this is where having a realtor helps, they can help explain what everything in the purchase agreement means. Again having a realtor to buy a newly built home is not necessary but can save a lot of time and energy.
But before a purchase agreement is even drawn up the sales consultant will determine how much home the buyer can afford (if that hasn‘t already been determined by the realtor). Then a floor plan and all of the options need to be chosen by the buyer, and need to stay within the pre-determined amount on how much the buyer can afford. Options are “extras” for the house, they usually cost extra money but some new homebuilders have incentives, and the options in the new home could be free or cost very little money. Options may include upgrades of the carpeting and carpet pad, extra windows, upgrade in cabinets, vaulted or cathedral ceilings, and a garden bathroom are some of the many options available to make every newly built home unique. Every new homebuilder is different and different things come standard in their homes, so be sure to ask what comes standard. Once the floor plan and all of the options are chosen, then it is time to draw up the purchase agreement. The purchase agreement is basically saying that if all the financing goes through and the buyer is approved, and the house is built with no major defects at the price promised to you, and passes an inspection then you are promising to buy the home. The purchase agreement is a legally binding contract and once you sign it, and all conditions are met you cannot back down. Again the realtor will explain this in full detail.
After the sales consultant draws up the purchase agreement an appointment with the mortgage company needs to be made. Most homebuilders have their own in house mortgage company and it is not a requirement to go through them, but some builders do offer incentives to go through the in house mortgage company. Some offer to pay all closing costs, including points if buy down is being considered. But again it is not required, and if a better offer from a different lender is available then by all means take it.
After all that is done then an appointment with the design center is made. This is where all the decisions on carpeting, cabinet colors, and options are made. If the sale of the options is more than what is financed the money needs to be given by check right then and there, so try to pick all the major options out before the appointment with the mortgage company. Unless of course the money is available and the choice has been made not to include the cost of the options in the mortgage. This is one of the fun parts about buying a newly built home.
Once all the important decisions have been made then the building process begins. One of the most important things to remember when building a new home is to take pictures every week, and if at all possible everyday. It is also advised to hire a home inspector outside from the one the builder hires; it is always good to get a second opinion.
Once the house is all built there will be a walk thru inspection done by the buyer and the supervisor, and if there is a realtor involved they will probably join the walk thru also. This is where the buyer needs to be thorough and find everything that could be wrong with the home, they need to be picky and don’t worry about making any enemies. This is a huge purchase and the buyer deserves to get what they are paying for.
Finally after the walk thru it is time for closing on the house. If a realtor is involved then the realtor will accompany the buyer to help explain the terms of the mortgage and help inform the buyer on every step of the process, it can be very confusing and even a little nerve racking, so the realtor is there to help the buyer. At closing the buyer will receive the mortgage, title, and keys to their new home. Then the buyer is free to move in there beautiful newly built home, and enjoy owning their own home.
