Planning to buy a new build home? With each passing year, more U.S. residents are leaving urban centers to find a housing market where they can build their own home and get the most bang for their buck at the same time.
While it used to be expensive, new build construction is becoming more of an option for house hunters, though it comes with some unique considerations compared to resale homes.
In this post, our team at Your Home Sold Guaranteed Realty - Phil Aitken Home Team will discuss five things you should consider before building a new house.
1. Timeline Delays
Processes like breaking ground can take a very long time to launch. Each step hinges on the one before it, so if something gets delayed, it holds up the entire process.
For example, the floor plans must first be approved by an architectural review committee. Depending on how long the committee takes, completion of the builder’s final contract might be delayed by months.
The process of obtaining a construction loan can also be quite lengthy– and nothing gets started until the finances are approved.
2. Preparation Expenses
Preparing to build can be expensive in and of itself. For example, there are fees for:
- Topographical maps
- Staking out the property
- Architectural review
- Additional fees charged by the development’s road maintenance fund
- Fees for building permits
These costs can amount to thousands of dollars before ground is even broken, not to mention what you paid to purchase the land in the first place.
There are also property taxes and home owner association fees which must be paid before the home is even erected. Less predictably, the weather has an uncanny ability to affect the building process and drain funds, so it’s important to build during a relatively clear time of the year if you can help it.
Builders will need to calculate all these expenses to get an accurate idea of how much the entire project will cost, and whether or not they should be included in the building loan.
3. The Unknown
Often, home buyers don’t know what there home needs until it is needed. For example, our real estate team helped two renters named Phill and Hailey who experienced many power outages in a rental property prior to deciding to build their own home.
Based on that experience, they knew that their new-construction home needed to include a backup generator. In addition, they preferred a wood-burning fireplace instead of a gas one to help heat their home in cooler months in the event of a power outage.
Phill and Hailey wouldn’t necessarily have thought to include these items if they hadn’t had previous experiences with power outages at their old residence.
For this reason, prospective home buyers need to anticipate every scenario when deciding whether to build a home. Consider installing energy efficient products like solar panels or backup generators in your home– don’t wait until a crisis occurs.
Do the research and make the best decisions beforehand in order to avoid higher costs and more hassle down the road.
4. Price Points
Be sure to get the specific breakdowns of various costs from your builder. For example, don’t pay for an entire slab of granite if you can obtain a smaller piece for a fraction of the cost.
It’s also easy to nickel and dime yourself if you don’t get involved with every financial aspect of the building process. If you can, take charge of certain tasks, like doing your own landscaping or installing your own floors.
You can also cut costs by asking home improvement stores for discounts on floor model sinks and cabinets. In addition, appliance fees can be reduced by asking vendors for kitchen packages.
Related: “10 Questions for Buyers”
5. Cost Evaluation
Ask as many questions as possible regarding overall costs and ways to save. Don’t dive in until you know exactly what you are getting into. Be sure to ask about the cost of processes like ground leveling, drilling for septic, and digging and pouring the foundation.
Find out whether another material will save you money. For example, using stucco instead of stone. Or, perhaps you can save money by pouring a straight driveway rather than one that curves.
If you want to buy a new build home, it can be a great way to go. However, it must be approached with a great deal of research and self-education if you want the best possible outcome.