If you have been paying any attention to the real estate market you might have noticed that the last couple of years have been nothing less than eventful! With historically low interest rates along with record low inventory levels, we have experienced a steady increase in home values making for a very competitive market. If you are a potential home buyer but feel uneasy competing with other offers you might want to consider purchasing a new construction home. New construction homes offer many advantages for eager house hunters. Check out these 3 things to consider as you think about new construction as a home purchase option.
1. Weigh Out the Pros and Cons
The idea of purchasing a brand-new, untouched home can be quite appealing, however it is important that you evaluate your personal situation to see if new construction is the right choice for you. Here is a quick list of pros and cons from bankrate.com about newly constructed homes for you to consider:
Upgrade Opportunities - From paint colors to counter tops, oftentimes you will have the opportunity to work with your build to make updates and customize parts of your new construction home.
Modern Styles & Technology - Smart home technology is revolving every day! With a new construction home you can quantity they are keeping up with the latest house trends and home technology. Make sure that you discuss with your realtor and builder to see what modern features are included in your new construction home.
Less Competition - New construction is an ideal option when you are having a hard time finding the right home in this very competitive market. With new construction you don’t have to necessarily settle on either your vision or your price point, with new construction you can strive for both!
Timeline - One unnecessary tidbit about construction is that you might need to be flexible with your move-in timeline. According to bankrate.com “It could take at least three to nine month to get into a newly built home.” If you are anxious to get in to a home quickly, then new construction might not be the best fit for you.
Cost - According to bankrate.com “Cost overruns happen quite frequently through unforeseen costs or changes made during construction”. Not to mention that new construction tends to lean on the more expensive side on both price and price-per-square-foot. Make sure that you can financially take on any additional expenses that might come up, because most likely, they will.
Decision fatigue - It can quickly become exhausting to make decisions on your new construction build. If you are not ready to design, plan and decide you might want to consider hiring an interior designer or limiting your upgrades on your new construction home. You can also choose to get into contract on new construction home that is far enough along that you won't have to be responsible for those decisions because the choices that have been made by the builder or the design center still meet your design aesthetics and style.
2. Research & Ask Questions
It is important that you take the time to fully research and create a list of questions that you have for your real estate agent and builder! Before you take the leap and purchase a new construction home make sure that you work with an agent who is familiar with the builder, new subdivision and surrounding neighborhood. Take the time to do your own research of the builder, the quality and longevity of their builds, and read through their more recent testimonials. It might be a great idea to visit model open houses and take photos and notes of details that you like or dislike. Explore the community, school districts and local parks with your family to be sure that this is a location that fits your desired lifestyle.
3. Consider Your Financial Situation
If you are considering purchasing a new-construction home, it is vital that you work with your real estate agent and mortgage lender to become pre-approved before you start your official search. There are different kinds of construction loans so it’s important that you seek a mortgage expert to help you decide which mortgage loan product is right for you and your personal situation. To get you started here are a few questions to ask your mortgage lender about construction loans:
What types of construction loans are there?
What is the difference between a conventional home loan and a construction loan?
Are there different credit and income qualifications needed to become approved for a construction loan?
How much can you borrow with a construction loan?
So as you do decide if new construction is right for you, don’t rush into this decision, take the time to do your research, ask the important questions, and consider your financial situation before you take the leap on new construction! If you are looking for a real estate agent check out my Heart N Homes Website. I would be honored to help you find your new home. Until then...Happy House Hunting!