10 Steps to Buy a New-Construction House: A Guide for First-Time Homebuyers
Purchasing most items is usually as simple as adding them to a shopping cart and paying with a credit card. However, buying a home, especially a brand-new one, involves a more complex process with unique considerations.
While buying a new-construction home shares similarities with purchasing an existing house, there are notable differences. Given that new-construction homes currently account for approximately one-third of the U.S. housing inventory, it's an option worth exploring.
To provide an overview, here is a step-by-step guide to buying a new-construction home and helpful tips for ensuring a smooth process.
1. Set a budget:
Determine how much you can afford to spend on a new-construction home by assessing your income and expenses.
2. Get preapproved for a mortgage:
Obtain a mortgage preapproval to understand your buying power and convey it to builders.
3. Choose a location:
Consider your preferences and prioritize factors like commute times, school districts, amenities, and proximity to essential services.
4. Hire a real estate agent:
Engage a buyer's agent who can protect your interests, review contracts, and negotiate on your behalf.
5. Shop home builders:
Research reputable home builders, check reviews, compare floor plans, and evaluate incentives offered.
6. Decide whether to build or buy move-in ready:
Determine if you prefer a move-in ready home or want to build from scratch, considering timelines and design control.
7. Sign a builder contract:
Sign a contract that includes the purchase price, completion timeline, and provisions for unforeseen issues.
8. Prepare to move in:
Coordinate the sale of your current home, plan for interim housing if necessary, and avoid major purchases that may affect your credit score.
9. Have your new home inspected and do a final walk-through:
Hire a home inspector to ensure the quality of your new-construction home and address any issues before moving in.
10. Close on your mortgage and move in:
Finalize the mortgage process, make the required payments, and prepare to move into your new home.
By following these steps, you can navigate the process of buying a new-construction house smoothly and efficiently.