Finding New Home Construction Listings
The search for new home construction listings can be the most significant hurdles in selecting the ideal home in a new development. Developers and homebuilders don’t use traditional methods for listing new homes. MLS and other real estate search engines don’t always have listings for new home construction or developments. In fact, some homebuilders list one home or style of home without including every available home site or floor plan.
If you are looking for new home construction try the new home section in your local paper or billboards in the neighborhood you are looking to move into. Be sure to visit the sales office and ask to see all of the available home sites, floor plans and any new homes that have already completed construction.
Leveraging the Timing of the Sales Process
As soon as a development enters the market, the best sales tool the developer has is momentum. Proving interest and sales can be the largest obstacle for new home sales in a development. To generate this excitement and ‘buzz’ in a market, a home builder, may want to get a few homes under contract quickly. If the development can announce sales early in the sales process, the development can seem more appealing to future buyers.
Home builders tend to build new home construction in phases. If the first homes sell quickly at the asking price, and the market continues to do well, the builder can raise the prices on the second or third phase. Also, the sales cycle for a new home construction plan can take years. The last phase could end up being priced 10 percent or more than phase one, simply because the real estate market has appreciated.
If sales go well, some developers will raise the prices at certain sales milestones, so there are often discounts or better pricing options available to early buyers. It is important to note that by being an early buyer, you take certain risks. If things don’t move ahead before the home is built, you risk losing your down payment.
New Homes on the Market are often not built yet
Many developers will generally start the sales process before they have built all of the homes. This is for a number of reasons, but primarily to build a successful development with few vacant homes. The developer and builder usually gets financing for a specific construction and sales plan that does not involve the entire project. As sales start, new home construction begins and the developer can begin financing future phases of the master plan.
Even though YOUR home may not be built yet, developers build model homes and allow buyers view the fixtures, finishes and floor plans specific to the home you are purchasing. Another benefit to this process is to while the homes are under construction, you can possibly modify or customize some of the finishes.
When will my Neighbors Move In?
When meeting with your sales agent at the sales center, but sure to understand what phase of the project your desired home will be in and how it fits in to the construction timeline. Not all phases are built at once and as an early buyer, you might not see neighbors moving in anytime soon. Not only does that mean a smaller community to connect with, but also a louder neighborhood over the next few months and even years while new home construction is underway.
Builders Don’t have an Emotional Attachment to a New Home
In a typical home sales situation, a seller has lived in the home for years, built memories and raised their family there. For a resale home seller, when it’s time to sell, the seller may experience all kinds of issues, questions and uncertainties, which can come out in the negotiation and purchase process. As a consequence, the seller may price the home too high because the value they place on the home is not objective.
When purchasing from a home builder, it’s just about the numbers. They are typically focused more on the bottom line than the sentiment. They want to make sure you’re qualified and can get a loan – not if you will be happy and make lasting memories there. They set the prices based on their inventory, though there may be a little room for negotiations on new home construction.
Look for Incentives that are not in the form of Cash
As we mentioned, the developer or builder is looking at the bottom line and cash is important to their lender or financing partner. By understanding where the developer is in the sales cycle, you can better understand their motivation on discounts or incentives. The builder may be a little more willing to negotiate with you on upgrades.
Most developers are also unwilling to move the final sales price for strategic reasons. If they reduce the price on your home and the sale closes, that sale price becomes public record and can impact their ability to raise prices or negotiate with the next new home buyer.
If a builder can offer an upgrade package in the form of fixtures or finishes, there is no clear way to track that. The impact on you might be better in the long run. A stronger interior package can get you a stronger resale value down the road and mean more than savings off the purchase price.
Trust your Builder and Developer
There are many reputable builders and developers out there that are big names throughout the country. There are also smaller, regional builders that do a great job and have strong reputations. Be sure to look into everyone and ask around. In this market, land chances hands quickly and its important to know who you are partnering with. Trust is a major part of your decision. For many first-time buyers, new home construction could be a great idea. If you’re used to renting and relying on the landlord for mechanical fixes and general maintenance, you can almost be assured that your first few years in a new home will be maintenance-free.