As we get into springtime, more and more buyers and houses will be coming out of the woodwork. You may be wondering if you should be looking at new construction or an existing house. If you’re interested in new construction, keep in mind that “new construction” is a very broad category, where houses land somewhere between “spec home” and “custom build”. Prices and builder processes can vary widely from home to home, so make sure you know what you want before you decide to buy.
First: Some explanations:
- Resale: This is a home that is not brand new. This is also known as a pre-existing home.
- Spec Home: This is a home that the builder has finished as an example of his/her work. It’s ready to go (minus some small items). Here, you generally cannot pick any of your finishes, appliances, etc.
- Home Under Construction: This is a home that has been started. Depending on the stage of construction (foundation, framing, drywall, etc.), you may be able to make some changes. The floorplan is generally set at this point, and some items may already have been ordered (for instance, cabinets must be ordered very early on in the process). However, you can usually change some items, such as counters, flooring, and paint colors. Based on the stage of construction, the house may not be ready for 3-6 months.
- Custom Build: This is a home that the builder will build from scratch, just for you. You have the choice to create a custom floor plan (which will require architects and drawings), or to take an existing floor plan from the builder and customize it to your needs. You can also choose EVERYTHING in the house, from the window type to the grout in the bathrooms.
|Questions to Ask||Resale||Spec Home||Home Under Construction||Custom Build|
|Can I choose my builder?||No||No -- Take the builder into account when deciding whether to purchase the home.||Maybe – Depends on where you want to build. You can find a lot where you can bring your own builder, or you can find the perfect lot and see which builder owns it.|
|Can I choose my lot?||No – Take the lot into account when deciding whether to purchase the home.||Maybe – Depends on whether you have a number of lots available, or you’ve found the perfect lot. A builder may already own your dream lot; in that case, you can see if the builder is willing to sell that lot to the builder of your choice.|
|Can I make changes to the floorplan?||No||No||Probably not, depending on the stage of construction and your requested changes. Depends on the changes you want to make.||Yes – You can either take a builder’s standard plan and adjust, or work with an architect to draw an entirely new floorplan. The more changes you make, the more you will pay.|
|Can I pick my finishes?||No||No||Depends on the stage of construction. Cabinets are usually ordered first, so those can be hard to change. Paint colors can usually be changed right up to the date of painting.||Yes, you should be able to pick all finishes. Builder may have a design center, or you may go to each vendor separately to choose.|
|Can I negotiate pricing?||Yes||Generally, builders will not reduce the price of their homes, as they want to ensure they keep the value for future builds. You may be able to negotiate closing costs being covered, upgrades, and/or appliances.|
|Do I need an independent inspection?||Absolutely||Absolutely. Homes are built by people, and people can make mistakes. It’s worth the time and cost to have someone else check before you purchase the house.|
|Is there a home warranty?||You can request a home warranty paid for by you or seller.||Builders generally provide a one year warranty with the house to cover all but wear and tear. Before closing, a builder will perform a final walkthrough with you, and explain how to contact the warranty team. Also, a builder will fix far more before closing than a seller selling a resale.|
|Do I need to buy items separately?||This depends on the home. If previous owners have put in window treatments or extras, those generally stay. Appliances are open to negotiation.||New homes typically do not include: refrigerator, washer, dryer, window treatments, or extras such as a fence or irrigation system. The refrigerator, washer, and dryer may be negotiated with the builder.|
|How fast can I close||~30-60 days from your offer date.||Depends on the phase of construction.||Can be 4+ months, depending on how fast you make decisions, weather, and the builder schedule.|
Choosing whether to buy a new construction home is a decision that cannot be made lightly. If you are still interested in exploring what new construction has to offer, contact me today; I’ve worked with multiple builders and am happy to share that experience with you.