New Construction - What You Need to Know

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Real Estate

New construction can be a great way to go for your next home. There are a lot of benefits about building new, but there are also things you will want to know prior to jumping right in. Let's take a look at what you should know...

When you buy new, you get to build a home that is the floorplan & layout you really want. You get the benefit of choosing all your own finishes, color scheme, and the house is how you want it at closing. You can also choose your lot location*. 

*The downfall is that new home subdivisions don't have mature trees usually, can look more uniform in style, locations may be a little further out since a good amount of land is needed for a subdivision to be built or to build a little more custom. Established areas don't tend to have many available lots/vacant land left.


CUSTOM BUILD | With custom build, you find your own land, you bring in your own builder, you have your own blueprints or work with an architect to develop a blueprint, and every item and design in the home is yours and is completely customized.

You will want to find out what utilities you can get on the land and what the cost is to get those utilities added, and how good is the internet service. Also, you are more likely to have unknown costs to come up through the process and how you finance a custom build is different.

*With custom, you really need to settle on a builder and have them check out lot conditions/soil tests to determine if you can/want to build the house you want on the land and if there will be additional costs to prep the land.

SUBDIVISION BUILD | With a subdivision build, you use the builders offered in the subdivision, and you pick from the floorplans available in that new build community & the lots available. There will be restrictions as to what changes you can make, especially structural, and the base price can be deceiving since you will need to factor in about 8%-50% in upgrade costs. This varies greatly depending on the type of subdivision, standards offered in base price and level of upgrades desired. Could have possible subdivision amenities, pool, ball courts, playground, lake, etc.


Financing will be different with new construction. You will want to talk with a trusted lender beforehand so you are well informed and can more forward accordingly.


To find out about new construction communities, you can drive around areas you want to live, search builders/subdivisions online, OR talk with a Realtor who already knows about new home communities or has more knowledge on all the builders to ask and knows where to look for new home options. Experienced Realtors find out about new builds before signs go out since they are constantly networking & working in the industry.


Each builder has a different style and look. Begin by researching the builder's look that they build. what look do you like? Research the builder's reputation. *A Realtor can provide a lot of insight into reputable builders from their clients experiences in building and what they hear through the industry. Then, what are the areas in which the builder builds? What price range of homes they usually build, and what builders then could fit into your budget? Will they build on your own lot or only in their subdivisions? Will the builder make custom changes you want? (not all builders will) What is the builder's build time? And lastly, how the builder finances their build to make obtaining or financing the loan easier on you as the buyer.


You will want to look into what items are most important to you when it comes to location. Do you need to be in a certain school district? Do you want a subdivision with amenities? Or maybe you want to be close to friends, shopping, dining, and nightlife. These will also play a big role in what community and builder you end up using.


Items to consider when choosing your lot location: What does the lot back to? Floodplain, future development plans around the lot, etc. What is the size of the lot? Does your desired home plan fit on the lot? Do you plan on adding any detached structures or a pool later? Also, what is the elevation of the lot? This will determine if the lot will be a walkout, lookout, or ingrade lot. 


You will want to start by picking your floorplan & structural things first (fireplace, bay windows, garage extension, ceiling heights, vaulted ceilings). These are the items that can't easily be changed after it is built. Then price what your wish list is then remove from there, remember more upgrades may come after contract: flooring, lighting, cabinets,...  


Builder contracts are written to best protect the builder. You want to make sure you read and fully understand the contract you are entering into. When we represent our buyers, we read through the contract entirely and have a thorough conversation to make sure our buyers understand the terms of the contract. Please reach out to have a conversation about the items to look for on a contract.


The agent on site at construction locations work for the builder and has a fiduciary responsibility to represent the builder's best interest. Most builder agents are not licensed Realtors. They don't represent you in any way even though they are usually very nice. Their job is to secure a contract with terms that are great for the builder.

What does that mean for you? It means you don't have anyone on your side making sure your best interests are being looked after. That is, unless you have your own agent. Your agent needs to be with you at the very first appointment, even if you're just in the preliminary stages. A lot of builders will not pay your agent to represent you if they are not at the first meeting.

*Builders do NOT negotiate price if you are not working with an agent.

*Some builders agents are thorough and good at their jobs and some are not. Contract mistakes can cost you money if you aren't looking over everything in detail yourself to make sure it is correct. 


A buyer's agent is FREE to you. Your agent would be paid by the builder and using your own agent will not cost you any extra when building. 

How is that the case? An agent/Realtor is paid out of the builders marketing fund that they set aside from every single build. They figure in paying a agent/Realtor in the base price of every single home. The reality is when you build without a Realtor, you are still paying for one but not getting the benefits of their experience, guidance and them being another set of eyes to make sure the contract you sign is truly what you want to build and agree to.

Having your own agent ensures you have representation for YOUR interests and explains in detail what you may need to be concerned with before entering a contract to build. They will read the contract in its entirety and reviews all paperwork before signing, and answers any questions.

They are an expert guidance throughout the entire process.

They can offer tips for upgrades and design help, and recommendations for what is good for resale of your home in the future.

Your agent will help keep things on track. Your agent will follow up on your build status, financing, and communicate with the title closing company.

And lastly, they fight for you and handle issues that come up during the build process, making sure things get resolved/corrected.


Thinking about new construction for your next home? Reach out today and let's start talking!