What You Should Know When Buying New Construction Homes

Posted by Larry Tollen on Tuesday, August 11th, 2020 at 8:28am

 

What You Should Know About New ConstructionWhat You Should Know When Buying New Construction Homes

There's a lot of new construction here in the Research Triangle Area, from fully customized high-end single family homes, to mass produced production homes with few options for the buyer other than cosmetic, and everything in between. Each and every builder has their own jargon and terminology to describe their product and there's a very significant difference in the quality of what and how they build and what a homebuyer can expect throughout the process. It's very easy to become overwhelmed.

Here's what you should know about buying new construction.

New homes have a lot of advantages, but there are trade-offs. As with any major purchasing decision, consider your personal priorities and think about your long-term plans for the home. Be sure to discuss the pros and cons with a neutral third party. An on-site agent works directly for the builder and while they may be knowledgeable about some aspects of the project their representing, they should not be considered an unbiased source of information. They work for and are paid by the builder, it's who they represent at all times. As Buyer brokers we represent your best interests and aren't there to promote a specific builder. Depending on what you want and can afford we have literally dozens of builders we can match you with. Both Andrew and Larry have extensive background as builders and have spent countless hours on construction sites. Lauren has benefitted from their experience and over the past several years has received a crash course and gotten invaluable "on the job" training. Most Buyer Brokers do not have any significant experience with new construction. Between us we have seen every type of structural problem you can imagine. Unfortunately, there are builders who cut corners because they are under pressure to reduce costs and/or meet deadlines.

In general, when you buy new construction, you get a modern design with a contemporary floor plan and new stylish fixtures. If you purchase from a solid builder, you can reasonably expect lower maintenance costs. You shouldn't have any major expenses in the first 7+ years, no concerns about your roof, painting, heating and cooling etc. In addition the home you buy may offer significant utility savings from modern framing and insulation techniques, LED lighting, low flow toilets and faucets, on-demand water heaters and 90%+ efficient heating and cooling equipment. Additionally new homes often come with extended warranties. In return for these benefits, you will have to go through a building process and often live with construction going on around you for some period of time. You will likely pay a higher price up front with almost no ability to negotiate, the landscaping will need 5-7 to really develop etc. Homeowners association dues have become relatively common and can be higher in new developments. (See also: What Buyers Need to Know about Homeowners Associations)

Choose The Right Builder

One of the biggest perks of buying new is the peace of mind that comes with lower risk of maintenance issues. However, there are no guarantees, and that's why it's crucial to buy from a reputable builder and understand exactly what you'll be receiving. You need to check out the builder carefully. Talk to the owners of other homes in the development, the HOA board or management company and/or the local municipality's planning or building department. Check out the builder's rating with the BBB and Google them to find out if there are outstanding complaints or lawsuits against them. Understand larger builders (we have many national and regional builders working in the area), are going to have some complaints. If you see 10 complaints in the past couple of months about a builder and that builder built 500 homes nationally in that same time that's less meaningful than 10 complaints for a builder who built 30 homes. Often the complaints stem from a lack of reasonable expectations. If you're buying a stock home from a national builder you can't expect a custom built home. Some builders offer more square footage for the dollar, while others focus on interior finish or energy efficency or some hybrid of them all. This is where experienced Buyer Brokers like us can save you a lot of time and energy. We can quickly point you to the builders who are going to match your specific needs and budget

If you are building a home, it's important to have an outside inspector visit the property at regular intervals during the major stages of construction (at a minimum, when the foundation is poured, when the framing is complete and when the home is finished). This will ensure that problems are documented before they can be covered up. Remember that county inspections do not assure quality standards; they serve to make sure that the builder has complied with state and local building codes. Building a home to code and building a quality home are absolutely not the same.

Factor In The Cost Of Upgrades

Builders all advertise the lowest prices they can to attract buyers, and then show them model homes with lots of extras. Add-ons and upgrades can easily add thousands of dollars (4-8% above the list price is common) to a home's price. Additionally, the brands or models of items like flooring and appliances you see in the models aren't necessarily the same ones you will receive. If you are buying new construction, you will benefit working with an agent who knows this area. They can offer invaluable advice on what upgrades are worthwhile and which may not be prudent. They can also assist in helping you estimate in advance how much the final price is likely to be.

Know Your Home's Warranty.

The home may come with one, but some people like to purchase one independently. Not all warranties are equal, so make sure you know what it covers and what it doesn't. Some warranties are comprehensive and cover preventative maintenance, whereas a more limited home warranty might only cover the appliances or major structural defects. Be wary of overpaying for warranty coverage (or paying extra for redundant protection), especially if you are buying a third-party warranty. A broker with experience in new construction can advise you on this as well.

If you are considering building a new home (or buying a ready-made new home), give us a call at 919-451-7868 or send us a message online we love talking about new homes!

Interested in New Construction, easily check out what's being built below.

Cary New Construction

New
945 Weycroft Avenue, Cary
  • Residential
  • 5 Beds
  • 5 Baths
  • 3,626 SqFt

945 Weycroft Avenue, Cary

$775,000
New
178 Wildfell Trail, Cary
  • Residential
  • 3 Beds
  • 4 Baths
  • 2,688 SqFt

178 Wildfell Trail, Cary

$400,000
New
2034 Chipley Drive, Cary
  • Residential
  • 3 Beds
  • 3 Baths
  • 1,892 SqFt

2034 Chipley Drive, Cary

$334,900
New
329 Roberts Ridge Drive, Cary
  • Residential
  • 3 Beds
  • 3 Baths
  • 2,239 SqFt

329 Roberts Ridge Drive, Cary

$390,000
New
364 Roberts Ridge Drive, Cary
  • Residential
  • 4 Beds
  • 4 Baths
  • 3,239 SqFt

364 Roberts Ridge Drive, Cary

$469,900
New
1421 Bond Gardens Road, Cary
  • Residential
  • 5 Beds
  • 5 Baths
  • 3,625 SqFt

1421 Bond Gardens Road, Cary

$549,900

 

Chapel Hill New Construction

New
3618 Stonegate Drive, Chapel Hill
  • Residential
  • 5 Beds
  • 6 Baths
  • 5,691 SqFt

3618 Stonegate Drive, Chapel Hill

$1,395,000
New
128 Lystra Grant Court, Chapel Hill
  • Residential
  • 4 Beds
  • 4 Baths
  • 2,835 SqFt

128 Lystra Grant Court, Chapel Hill

$629,900
New
68 Davis Love, Chapel Hill
  • Residential
  • 5 Beds
  • 4 Baths
  • 3,850 SqFt

68 Davis Love, Chapel Hill

$850,000
New
136 Post Oak Road, Chapel Hill
  • Residential
  • 3 Beds
  • 4 Baths
  • 2,855 SqFt

136 Post Oak Road, Chapel Hill

$535,000
New
117 Founders Ridge Drive, Chapel Hill
  • Residential
  • 5 Beds
  • 5 Baths
  • 4,100 SqFt

117 Founders Ridge Drive, Chapel Hill

$1,435,000
New
38 Kingbird Lane, Chapel Hill
  • Residential
  • 3 Beds
  • 3 Baths
  • 2,650 SqFt

38 Kingbird Lane, Chapel Hill

$825,000

Durham New Construction

New
1116 N Buchanan Boulevard, Durham
  • Residential
  • 3 Beds
  • 3 Baths
  • 2,426 SqFt

1116 N Buchanan Boulevard, Durham

$649,900
New
1009 Kindness Lane, Durham
  • Residential
  • 3 Beds
  • 3 Baths
  • 2,104 SqFt

1009 Kindness Lane, Durham

$284,490
New
1005 Kindness Lane, Durham
  • Residential
  • 3 Beds
  • 3 Baths
  • 1,729 SqFt

1005 Kindness Lane, Durham

$254,990
New
1003 Kindness Lane, Durham
  • Residential
  • 3 Beds
  • 3 Baths
  • 1,635 SqFt

1003 Kindness Lane, Durham

$244,225
New
115 Phantom Lane, Durham
  • Residential
  • 3 Beds
  • 3 Baths
  • 1,690 SqFt

115 Phantom Lane, Durham

$244,900
New
303 Ibis Lane, Durham
  • Residential
  • 3 Beds
  • 2 Baths
  • 2,798 SqFt

303 Ibis Lane, Durham

$575,000

 

 

2 Responses to What You Should Know When Buying New Construction Homes

Six Myths and Urban Legends about Buying and Selling a Home wrote:

[...]for compliance with applicable codes; they don’t assure construction quality. (See also: Thinking About Buying New Construction? What You Need To Consider.)
Myth: Living near power lines will give you cancer.
There’s a popular myth that all[...]

Posted on Tuesday, November 24th, 2015 at 4:52pm

Brooke McAvoy wrote:

It is really helpful to read information about how to find the best builder. This has been my priority ever since I decided to buy a new construction home. Something that I think should be looked into is the materials and equipment that they are experienced with. This could be the determining factor for whether you choose one professional or the other, don't you think?

I agree, checking out a builders specification list is a critical part of a buyer's diligence process before signing a contract with a builder. Having an experienced Buyer Broker with extensive experience as a builder (such as my partner Andrew and I have) can make a buyer's diligence process much easier.
Larry

Posted on Thursday, August 18th, 2016 at 12:48pm

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