New construction homes offer a variety of advantages, such as modern floor plans, reduced maintenance costs and warranties. However, it’s important to understand what the process will entail before buying a new construction home. It can take months to close on a new construction home, and they are often 13% more expensive than existing properties.
What makes a house a new build?
The first step is meeting with a mortgage lender to get preapproved, which will let you know how much you can afford to pay. Your real estate agent can help you find a lender who is familiar with the new construction process. Once you’ve found a lender, ask them about the available loan options and rates. Then, shop around and compare the different lenders to find the best option for you.
If you want to buy a new construction homes spec or tract home, you can usually make a cash purchase or put down 5 percent. For custom new construction, you can expect to put down a much higher percentage, depending on the builder and your needs. A lender will also conduct an appraisal to ensure the purchase price isn’t more than the home’s value.
A Realtor or real estate agent is recommended for buyers of new construction, as they can help you negotiate the contract and act as your advocate. Luckily, most builders will pay for the real estate agent’s commission when you buy a new construction home. They will also be able to answer questions and provide insight throughout the building process.