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New construction


Buying or building a new home is an exciting and calculated decision with many questions to consider. As you decide whether to purchase a newly built home or to undertake a building with a contractor or within a new development, you will want to weigh the pros and cons that are specific to you. You should always hire your own realtor to negotiate in your best interest. The builder’s agent works for the builder and will do what works best in their favor.

Is New Construction for You?

  • Building is time-consuming. You will need to check on your home’s progress on a daily basis once the home gets dried in. You need to double-check everything to make sure mistakes are not made. If you are living far from where your build is, this may be difficult.
  • You may get to customize the features. Depending on what stage the home is in when you buy, you may get to choose the finishes, fixtures, and appliances. Of course, if you are doing a fully custom build, you get to choose everything.
  • You have the option to add in the latest hi-tech features such as a security system, audio systems, automatic lighting, and smart faucets, appliances, and thermostats.
  • Everything functions correctly. Your money can go towards furnishings and decorating instead of repairs and replacements. Your home maintenance costs will be lower for the first several years.
  • Your big-ticket items, the roof, appliances, HVAC are all under warranty.  In fact, the builder’s warranty may cover additional items such as windows, doors, and trim, electrical and plumbing systems, and workmanship on tile and drywall installation.
  • You will have to abide by the builder’s deed restrictions, and possibly an HOA. New developments usually have certain restrictions homeowners must adhere to, and most newer neighborhoods also have homeowner’s associations. This is not a bad thing, but you should know what the rules are before you buy.
  • You will have immature landscaping for some time if you are in a new development. Unless you have purchased a vacant lot in an established neighborhood, you will have to wait some time for new trees to mature and provide shade to your home and yard.

Deciding on a Builder:

If you are looking at planned development, find out if there is one builder or if the developer allows you to bring in your own builder. If you are looking at building on a lot that is not restricted to a particular builder, it’s important to research builders in your area to find one that is reputable and stands by their work. 

It’s important that they are organized and communicate well. Make sure the builder has someone that is communicating with you through every step of the build so you know when your choices must be made and when each phase will be completed. 

Check out your builder before signing anything. Find out if there are any complaints registered against them and ask for references from other homeowners. Find out if you can tour a model or a recently completed home and bring someone who can judge the quality of the workmanship.

Questions to Ask the Builder

What warranties are provided? Normally a builder offers a warranty lasting from six months to two years, possibly longer for some items. You should know what is covered under the builder’s warranty and for how long. All the major structural items and mechanical systems are usually covered. Appliances are not, but they should come with a manufacturer’s warranty. Damage from weather, shrinkage, or expansion of the home or foundation, and anything resulting from the homeowner’s failure to provide maintenance or from work done on the home after construction is not covered.

What are the deed restrictions and is there, or will there be, an HOA? Developers usually file a subdivision’s restrictive covenants when applying for approval to build the development. Any persons buying a property in the development are bound to abide by these restrictions. You can get a copy of the deed restrictions from the builder. Also ask if there is, or will be, a homeowner’s association, what the HOA fees will be, and what they cover.

Is there, or will there be community amenities? Amenities may include a gate or guard, communal park or green area, pool, playground or recreational facilities, a dog park, or parking area. The amount of monthly or annual HOA fees will depend upon the amenities and the number of homes in the development.

Can you do a final walk-through before closing? Usually, there will be a “punch list” of items the builder needs to finish up at the end of construction. This may include a thorough cleaning, touch-up painting, repairing drywall nicks or scratches, last-minute trim work, caulking around cabinetry, changing out or re-keying door locks, and replacing landscaping that didn’t survive planting. It’s important that you go through the home before closing to make certain that every detail is taken care of before you sign the closing documents. If you and the builder agree that they will come back after closing to finish some details, make sure both of you have signed off on the list of what is still to be finished.

Can the builder charge extra for unexpected cost increases? Look over the builder’s contract carefully, or have an attorney do so, and note if there is an escalation clause that would allow the builder to pass cost increases onto you in the event that materials or labor costs increase during construction.

Obtain Pre-Approval or Proof of Funds

Builders or developments often work with particular mortgage companies and will offer discounts on closing costs for using their “preferred” lender. Whether you use the builder’s lender or someone else, you will need to get pre-approved for financing. If you are not financing, obtain proof of funds from your financial institution. 

Builders use their own contracts that are similar to a regular sales contract but include additional terms specific to the building process, such as at what points during building the contractor gets paid, and what options you have to choose from. I will help you interpret the terms of the builder’s contract before you sign.

Selecting Your Options 

In a planned development, you usually have option levels to choose from, the scope of which depends upon the price point of the home or development. You may be able to up or downgrade any of these items. You will need to discuss with your builder how changes to their options packages will affect your sales price. 

Various options are usually offered for these items:

  • Exterior finish colors
  • Interior color scheme
  • Flooring choices
  • Cabinetry
  • Door and window hardware
  • Countertops
  • Light fixtures
  • Plumbing fixtures
  • Tile
  • Interior, exterior, and garage doors
  • Appliances
  • Landscaping

Walkthroughs 

You will need to check on every phase of construction to double-check that everything is done according to plan. Even the best builders have miscommunications, mix-ups on orders, or problems with installations. Plan on visiting the home daily once it gets dried in.

 Optional Inspection

Even though your home is brand-new, you might still want to have a home inspection done. Sometimes an inspector will catch something that slipped past the contractor and code enforcement.

Closing Day

Closing day on new construction differs slightly from a pre-owned home in that there is often a “punch list” of items the builder is responsible for finishing up either on closing day or shortly afterward. This may include cleaning, touch-up painting, installing landscaping, or changing out locks. You should have the opportunity to go through the house with the builder shortly before closing to add items you notice to the punch list.