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Buying A Brand New Home



Last week we wrote an article on how to buy a house for first-time home buyers. The feedback we received was incredibly gratifying, overwhelming, and unexpected! We received a question from one of our readers, Jerry, regarding how buying an existing home compares to buying a new construction home, asking for both the similarities and differences. Also asking, when do you pay for a new construction house?




buying a brand new home


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Buying a new construction home is an entirely different dynamic than buying a home someone has lived in. You will be buying directly from a builder who has built the home with the sole purpose of selling it for a profit. This builder needs to move to the new home so he can move on to his next project. In order to understand the best strategies for buying new construction, you need to be able to put yourself in the shoes of the builder.


This guide is to help educate consumers on how to buy new construction homes from builders. Not having a strategy, the right team and the right education could cost you tens of thousands of dollars in the purchase process.


At the start of any home purchase, the first thing a buyer needs to do is shop for a lender. Raleigh Realty recommends buyers ask at least 5 lenders for their rates and options. Even the slightest difference over the course of 30 years could save you upwards of $20,000 total.


It's important to understand that looking at homes online versus in person is a completely different experience. For new construction, this article rings true because chances are the pictures you're looking at are of a home that hasn't even been built yet!


You want to find the very best builders BEFORE you go out shopping for custom homes. Our friends at Foley Homes, a top custom home builder in Northern Virginia, put together a great post on 5 things to look for in a builder.


Researching the best new home builders and new home communities in the area is not the most fun. It's super important though. It's a lot easier than you think too. We recommend our clients start with a google search for 'best new construction builders in Raleigh' or 'top new communities in the Triangle area'. The time and effort your spend researching the best new construction homes will pay off in the end!


Yes, you can negotiate on new construction homes - you're far better off negotiating for 'things' than for money off the purchase price. Even negotiating closing costs is easier than negotiating the purchase price because builders want the final price as high as possible for future appraisals in the neighborhood. If you're the first or second buyer to the neighborhood you may strike a great deal. Homes will be priced higher after the first few sales.


New Construction is often a better investment than resale homes thanks to the age of the property. New Construction homes with only one owner will oftentimes appreciate faster than an older home that has transferred ownership many times. People want newer homes.


There is a builder deposit that you will put down on your new construction home. Oftentimes this builder's deposit will be 3% of the total selling price. There are some builders who will go as low as $3,000 in terms of builder deposits. A lot of great builders will negotiate the money down so feel free to ask and see if they have any flexibility, you never know!


One of the more frequent questions we receive is in regards to the downpayment on a new construction property and how that works. It's going to be different for each builder, and each neighborhood and it's totally unique from buying a resale home. More often than not the builder is going to require a 'deposit' that may or may not be refundable. This deposit amount is normally anywhere from a little as $3,000 to as high as 20% of the purchase price. During hot and cold markets this deposit amount will vary. Each builder has its own contract so it's important to read through and understand it before you give the builder your deposit. If you have any questions it's always good to ask a real estate professional who has likely been through this process dozens of times before!


Buying a home is a complicated process, and buying new construction is both similar and different to existing homes. Some of the similarities regard the purchase process, while the differences can be found largely in negotiations, research on the builder, and looking towards the future for the new community neighborhood plans.


New construction homes in Raleigh, NC are plentiful as they are in our neighboring cities like Durham, Cary, Chapel Hill, and even smaller towns like Apex or Holly Springs. The reason for the large number of new communities being built is the large number of people moving here. Each day 62 new people join our community and right now rent is skyrocketing. The reason for the growth here in the Triangle is largely due to Raleigh being ranked the number one city for jobs. With a $110 million dollar investment in a new campus, MetLife moved its technology headquarters to Cary creating even more jobs.


For many, owning a brand-new, never-been-lived-in home is the ultimate dream. Yet the reality of tackling a renovation project or building a house from scratch can feel overwhelming, if not impossible.


For most of the United States, especially in Florida and New York City, there is an oversupply of new luxury condo construction inventory and little incentive to purchase pre-construction. There's no longer a race to buy the home before it sells out or prices escalate.


Before the closing date, the buyer is allowed a walk-through with a representative from the developer to inspect the home and create a punch list. This to-do list must be completed by the developer but not necessarily before the closing. The developer may continue finishing punch list imperfections after the closing has occurred, but the buyer must create the list before the closing and cannot add to it after. Therefore, this is the time to be as thorough as possible. It is not uncommon for buyers to hire experts who specialize in walk-throughs to ensure nothing is missed. Take this process seriously.


Your role in the construction and design of a newly built home can be wide ranging. It might involve purchasing an open spot of land and overseeing the entire home construction project; or it could be buying a home in a neighborhood planned and constructed by a builder with limited options. There are three major categories of newly built homes:


Buying a newly built home is similar to the process of purchasing a previously owned property, but there are important differences. Here are the six most significant steps when purchasing new construction.


A common step for prospective home buyers is to secure preapproval from at least one lender. Mortgage preapproval represents what a lender is willing to offer you based on financial circumstances and specific terms, including your credit, employment, income, assets and/or tax returns.


You close the real estate transaction after you have signed a contract for a new home. Closings usually take place at a title company and are attended by all buyers and the escrow officer, unless you are doing a mail-out closing. All buyers that are party to the contract should be present to sign, including non-purchasing spouses.


Buying a new home is an opportunity to get a fresh start in what could be your dream home. The key is preparing for the unexpected twists and turns that make this different than buying a previously-owned home.


The approval process for getting a construction loan is similar to applying for a mortgage to buy an existing home. The lender reviews documentation you provide in support of your loan application as well as the sales contract, construction plans and specifications in order to also approve the builder.


There are many pros and cons to buying a new construction home and it's important to understandthe whole picture before proceeding. In this article we will dive into all the benefits, drawbacks, and tips we have for buying new construction homes.


The new construction home buying process is quite different thanbuying an existing house. Buying new build homes is popular for a number of reasons, so let's take a look at the advantages of buying a new home rather than an existing home.


There can be a lot of charm to older houses, but they can also come with a long list of things to repair or things that will need to be repaired soon. When you buy a new construction home, absolutely everything is brand new. This means that you likely don't have to worry about making surprise repairs anytime soon.


In your new home, all of the surfaces will be in perfect condition, the fixtures and appliances will be brand new, and all of the materials are modern. Since you're the first person to have lived in the home, you know that no one in the past has jerry-rigged weird solutions to problems.


When you're buying an older house, you're also always running the risk that previous owners have done unpermitted work or that things haven't been brought up to code. This can create a lot of delays and frustrations during the home-buying process. On the other hand, when you buy a new construction house, you know that the builders have followed all of the modern-day codes and energy requirements.


It's pretty much impossible to find an existing home that has absolutely everything you need. Sure, you can make renovations and additions to existing homes, but there are practical and financial limitations to doing so.


When you're buying a new construction home, you get to customize the house to suit your needs. You won't worry about having to retrofit an existing house with the amenities that you are looking for. Instead, you can have them built right into the house from the get-go.


Older houses are typically less energy-efficient than new homes. If you buy a large New England colonial house, it's most likely beautiful and steeped in history, but there's also a high likelihood that it's drafty and more expensive to heat and cool. On top of that, an older house with outdated appliances will end up costing you when it comes time to pay the utility bill. 041b061a72


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