What to Expect When You Build a New Construction Home
Building your own home can be intimidating. There are a lot of moving parts, but when it is all said and done, it is pretty cool to say you built your house to fit your EXACT wants and needs! We recently sat down with our VP of New Construction, Shelly Rampetsreiter to talk about the process and what to expect.
Hiring a Buyer’s Agent
First things first, you will want to hire a buyer’s agent. The number one reason is to be able to get a professional’s opinion on the builder’s reputation. One of the greatest things about working with a good Realtor is that you benefit from their network of agents, vendors, lenders, and other industry professionals. Word gets around when businesses or service providers don't take care of their customers in the real estate industry.
If there is a builder in your area that isn't reputable, chances are the agent will know about it. On the flip side, he or she is likely to have heard about the builders that go above and beyond for their customers.
They will also help you review any contracts you sign to make sure you are protected and that you are getting what you think you are getting. Your agent will verify that all aspects of the contract are understood by you and that you are OK with them. If there are any issues, the agent will notice them and be capable of explaining them clearly to you and to the builder.
Find the Right Builder & Select a Lot and Floor Plan
Next, you will want to find the right builder. Start by speaking with your agent about your budget, neighborhood, and style of home you are looking to build. Your agent should be able to recommend and put you in contact with a few builders for you to meet with. It is important to also tour model homes, read reviews, and if you can, talk with past clients who now live in homes built by the builder.
Once you select a builder, you will select your floor plan and lot. Usually, you can tour model homes of the floor plan you are considering as well as look at plans. If not, ask if there's a home under construction or recently completed that the owners would allow you to walk through.
Put Down a Deposit & Select Upgrades
Once you decide on a lot and a floorplan you'll put down a deposit and sign a contract to hold the lot in your name.
This is also the time to select upgrades for your home. When you tour model homes, don’t assume everything in the model comes standard. Most of the time, the builder will select certain upgrades to showcase in the home. This is another reason to work with a buyer’s agent. They will be able to help you maximize your budget and determine what upgrades you should invest in now and which upgrades could be done at a later date.
Most builders have relationships with design centers in town. This is where you will go to select your cabinets, countertops, flooring, etc. If you need some inspiration, check out our Pinterest page!
If You Have a Home to Sell, Now is the Time to Start the Process
One of the first things to keep in mind is that you can obtain a construction loan for the purpose of building a home. However, depending on the type of loan you obtain, you will be required to pay for construction costs immediately upon completion of your home. Other loan types will roll over to a more traditional mortgage once construction is complete.
This means you will need to have the necessary funds to either pay one large lump sum and/or carry two mortgages (one for your existing home and one for your newly built home). If you are planning on selling your own home after your new one is built, it's important to judge market conditions fairly, so you can more accurately predict how many months it may take to sell your home. This way you can ensure you have enough funds saved to cover the additional mortgage cost until your home is sold.
By working with an Ask Cathy agent on both the buying of your new home and the sale of your existing home, our agents are able to work together to make sure your home is sold and your new home is finished at the same time.
Attend Inspections & Keep In Touch With Your Agent and Builder
Once all the permits are approved, that is where the fun begins. Around this time, you will get word from your builder that it is time to dig! You can usually expect homes to take 6-8 months from dig to finish. It all depends on the floor plan, builder, and neighborhood you choose. Be sure to remain in constant contact with your builder and agent throughout the process so you can stay up to date on your home’s progress.
During this time, there will also be a number of inspections you will want to attend. It’s best to visit the site at least once a week to make sure everything is going as planned. If something looks off, don’t be afraid to say something! A good builder will want the house to be perfect and will want to make sure it is done right.