Tips For Saving Money When Buying New Construction
Written by Jason Nelson on September 5, 2018
For many people, buying new construction seems like an elusive dream due to the costs. However, there are many ways that you can save yourself money and still enjoy all the benefits of new construction that you’ve been dreaming of. If you’re on the fence, here are a few tips to give you the boost you need to buy new.
Learn What Is and Is Not Negotiable
When a builder puts together a marketing package for a development, they almost always focus on houses within a certain price range. It is very unlikely that they will agree to sell a house in their development for less than that minimum number. However, you can negotiate for extras such as closing costs, free upgrades, or financing incentives if you work with their preferred lenders. Basically, don’t go in and try to lowball them, because they won’t go for it.
Don’t Expect the Model Home
A big part of successfully buying a home is managing your own expectations for your budget. In most cases, the model home that you see advertised has been amped up with thousands of dollars worth of updates and upgrades. When you talk to the builder, you may be disenchanted to see that there is almost nothing “standard” about the house you just saw. It is usually best to talk to the builder as soon as possible to get a better idea of what standard really looks like for your budget, and only use the model home to gauge a particular floor plan and layout. If you decide you want something upgraded later, it is usually much cheaper to do it on your own than to have the builder do it because you can price shop or DIY.
Research the Builder
Perhaps the most costly mistake that buyers make when choosing new construction is going with the wrong builder! Some builders simply have a bad track record for completing projects on time, some builders are known for poor quality, and some builders just don’t offer the support you need if you run into a problem after you move in. Make sure that you get referrals and read online reviews before you get underway with your new construction because once the process has begun, it can cost thousands more to get back out of the deal.
Work With a Specialized Lender
The process of having a house built actually differs a little bit from buying an older house. As such, your lending options will be different as well. Make sure that you conduct plenty of research into lenders in your area to make sure you are getting the best possible rate, the lowest down payments and the best funding available. You don’t want to overpay for 30 years just because you decided to go with new construction.
Don’t Be Afraid to Inspect the Home at Completion
It may surprise you to find that even brand new houses have their issues. Builders aim for efficiency and consistency in everything they do, but each build presents its own challenges, and mistakes can be made. Your contract should spell out conditions for you to have the home inspected by a third party professional at the time of completion to address any issues that may come up. You should never waive this opportunity because you might be giving up your warranty coverage if you do.
Buying new construction is well within the reach of most people as long as you know how to negotiate and what you’re looking at when you buy. Don’t get duped by model homes or false promises.