Things to Know about New Construction Homes

The real estate is hot right now. However, whether it is a buyer’s market or seller’s market, there are things every homebuyer should know about new homes. A potential buyer may look at the local listing page to find new homes. However, before potential buyers visit here, they should know most new construction isn’t listed on local sites.

Homebuilders are usually on local multiple listing sites because they aren’t members. These local sites are usually for real estate agents. More builders are more apt to advertise online or traditional methods like billboards. Thus, anyone looking for a new home shouldn’t look on local multiple listing sites.

Potential Homebuyers can Obtain Upgrade Discounts

Once a home construction projection is at the end of the sales cycle, they are usually more willing to negotiate. The sales cycle means they are finished trying to sell the houses. The builder may not be willing to negotiate on the asking price. The reason why they typically won’t do this is because once the sale closes, the asking price becomes a public record. That can be tracked.

However, they will more than likely negotiate with potential homebuyers on the cost of upgrades. The upgrades won’t become public record. Upgrade packages often include hardwood floors instead of a carpeted floor. Higher-end appliances are also included. Thus, the discounts may add to thousands of dollars more than an actual price reduction.

New Homes are Often Already Sold Prior to the Home Builder Constructing Them

A builder will obtain financing and map out the sales and construction processes early. This means they will sell as many new homes as they can prior to building them. To accomplish this task, they often build what’s called model homes.

“Model homes” are homes that are built so potential buyers walk through them, view the floor plan and the finished product. It gives homebuyers a visual of the house they want prior to buying it. Thus, it’s important to get into the process as quickly as possible before all or nearly all of the houses are sold.

Another thing to know is that all homes in a planned community won’t be available at one time. Instead, home builders tend to place homes on the market in phases. For example, if the first five or 10 houses quickly sell at the asking price, the builder will offer more homes. Typically, these homes will be on the market for a higher price.

New Construction is Strictly Business

Buying a new home comes down to a numbers game. Homebuilders aren’t emotionally or personally attached to the home as a seller with an older home. In other words, a seller may subconsciously price their home too high because of emotional and/or personal attachment such as raising children in the home.

Also, they also may want to know the buyer’s plans for the home. With new construction, the price is based on the inventory. This means there is more room for negotiation with a home builder in the early part of the process.