What to Know Before Buying a New Construction Home

It's not as easy to find a new construction home as it is an existing home, but it can be fun and exciting to be able to customize and make your own appliance, countertop and tile selections. If you're lucky enough to find a builder or development offering new construction, be sure you make an informed decision before signing a contract.

1. Check history and reputation.

The first thing you should do is run a “background check” of sorts on any homebuilder you are considering. The builder should have a website with past and present properties and/or communities they have built. This will allow you to see how long they have been in business, what types of homes they build, what the finish details look like and whether the builder seems to be a good match for what you’re looking for.

Look for testimonials on the website as well as on other non-biased review sites like TrustedBuilder and Google, and even check the local Facebook pages to see if any residents have worked with the builder. 

2. Ask for references.

It’s always advantageous to consult with people who have already gone through the new construction process with the builder. Ask how long they've lived in the house, how they feel about the construction and any warranty items. The longer they’ve lived there, the better, since they can speak to how the house has held up over the years.

3. Is the builder affiliated with a homebuilders association?

While a homebuilder doesn’t have to be part of a homebuilders association to be reputable, there are definitely benefits to choosing one who can show membership. Associations vet all their members to ensure they maintain specific standards in terms of quality and ethics.

To be a member of the National Association of Home Builders, the builder must meet professional criteria beyond a state builder's license. These additional credentials mean a homebuilder has access to more educational opportunities, the ability to stay on top of current trends, access to networking with other homebuilders, opportunities to buy materials in bulk (bringing down supply costs for you), deals for insurance and warranties, and more.

4. What is the move-in timeline? 

Some builders might have homes already built and others might have homes in the process of being built. Some may barely have broken ground. This will affect how quickly you can take up residence, so if you need or want to move soon, you’ll want to lean toward builders with move-in ready homes. But if your timetable is more flexible, you can save money by buying a home that will be ready later, since builders offer discounts to entice buyers that it’s worth the wait.

If the house has not yet been built, you’ll definitely want to understand how long it will take. It takes an average of 6-7 months to build a house from start to finish, but that will vary depending upon the builder's schedule, the time it takes to obtain permits, local weather conditions and more, so ask the builder what the normal build time is and how long after signing the contract your home will be started.

5. Is there a warranty?

New-construction homes often come with a home warranty covering the cost of repairs for anything in a new house that malfunctions or is defective within a certain time period, usually one year. Ask what the warranty specifically covers. Check to see if they use a third-party warranty company or if they are self-insured. It's best if the builder has a third-party warranty in case the builder goes out of business.

6. Are there any builder incentives?

Incentives are generally enticements such as free landscaping, no closing costs, free upgrades, etc., that make the property even more appealing to you. 

7. Can you make changes to the house plan? 

Is being able to make changes to a house plan essential to you? If so, ask the homebuilder if it offers various floor plans or allows for structural changes. Some builders only build from specific plans and will not make changes. With other builders, walls can be moved, rooms expanded, cabinets added, basements can be finished, etc.

If cutting costs is a priority, choose a builder who specializes in standard, single builds. These homes are less customizable—which can also be a boon to people who might feel easily overwhelmed by a lot of choices. But don’t be put off by the term ‘production builder,’ (examples are Toll Brothers and Pulte Homes) because there are many choices, sizes, and price ranges depending on the type of community you desire. Many of these builders also offer selections for structural options so that you can personalize the home.

8. Is there an in-house designer for finishes?

Some homebuyers might actually find all the potential interior design choices overwhelming, so ask if they have an in-house designer and if you can work with the designer to make home selections like kitchen tile, island countertop, light fixtures, and flooring. Some builders might have pre-determined design packages from which you can choose.

9. What are the plans for the community?

If you're buying in a new development, ask what other amenities are planned and how the builder sees the community layout coming to life. Will there be a pool? Pickleball courts? A clubhouse? 

10.What does the builder expect from you?

Find out what requirements the builder has for you as a homebuyer. This includes the timing of when to make selections, payments, and financing expectations. Be sure to ask how much is the required nonrefundable deposit. If you're able to make changes, the deposits for design feature upgrades are nonrefundable for most builders.

Finally, are there walk-throughs that you are expected to be at? Some builders will have a framing walk, an electrical and plumbing walk, a "punch list" walk and a final walk-through prior to the closing. 

It's important to know what to ask and when, in order to have your dream home come to life!