When it comes to looking for a place to call home, some buyers prefer a "blank slate" with a new construction home. Like purchasing a new vehicle, a home that has just been completed will be yours from the start.
While news the past few years has focused on slower building starts and increased costs and delays for new builds, there are still homes under construction here in Central Oregon. If you fall in love with a home and are not represented by an agent, it may be tempting to try to navigate the purchase on your own. The transaction will go more smoothly and you will have fewer headaches if you have a broker working for you. New construction buyers should work with a trusted real estate broker to guide them through the process and keep these tips in mind.
First, if you are financing, your lender may require additional documentation for loan approval. Keep in mind that some builders offer their own financing packages, either directly or through an affiliate. If you wish to purchase before selling your current home, there are additional options available for new construction buyers. You might be able to qualify for a bridge loan or new construction financing. Shop around the money side before falling in love with a new home!
Second, you will be required to complete additional forms to buy new construction. These include certification of building plans, acknowledgment of what is (or is not) included in the sale, and initial requirements to meet if the home is subject to Covenants, Conditions and Restrictions, or CC&Rs. Keep in mind that most new builds are located in communities and there may be restrictions on paint color, additions, landscaping, maintenance/appearance and parking. The local jurisdiction will have to inspect and approve the home after completion, and you will not be able to move in until a certificate of occupancy is issued.
Third, understand that a new home often includes additional costs for which you should budget. Appliances—especially refrigerators and washer/dryers, some light fixtures, window coverings/blinds, landscaping and garage door openers are additional expenses you may need to make immediately. You may be able to negotiate upgrades to the home in early stages of construction, but that will add to the price, as well. It is also worth noting that any homebuyer should budget for closing costs, which are typically about 1% of the purchase price, in addition to a down payment.
Finally, do not forego an inspection under the mistaken belief that there will not be any issues with a new construction home! The relatively small cost for a professional inspection may save you much frustration in the future.
Buying a new construction home can be more complicated than a previously owned house. But if you have a professional real estate broker to guide you through the process, you can soon be calling that brand-new house yours.