To see if a new-construction home is the right path for you consider these five factors:
1. New homes may not be listed in your local MLS
Homebuilders often have their own sales employees working for them on site, unlike a regular seller who lists their home with a local real estate agent. This cuts costs and gives them more control. For buyers, this may mean the homebuilder isn’t a member of the local MLS. The builder may be more inclined to advertise in the paper, on a billboard or online. So, if you’re interested in a newly built home make sure to work with your agent to identify all of the possibilities.
2. New homes are often sold before they’re built
A builder typically will get financing lined up and map out both a construction and a sales process. This means they’ll try to sell as many homes as possible, before they’re even built. Model homes are used to let buyers go in and review floor plans, fixtures and finishes while the homes are under construction. Homebuilders may have 100 homes in the community, but they won’t all be available at once so keep in mind the different sales cycles.
3. The first buyers may get the best discounts
In the early in the sales process, home builders want to get a few homes under contract quickly. If a builder can announce they have 10 homes under contract in a few months, the project can seem more desirable to future buyers. This typically means that early in the sales process there could be room to negotiate the price down. There is the risk of being committed to the project early however, you could lose your down payment if the project’s sales are not manifested.
4. Builders don’t have a personal attachment to the home
Home builders don’t have the attachments to a home like a family who has made memories there. For a home builder, it is all a numbers game. They set prices based on their inventory, though there may be room for negotiations.
5. Discounts may be available in the form of upgrades
If the project you’re interested in nearing the end of its sales cycle, with many homes already sold, the builder may be a little more willing to negotiate with you. These negotiations will most likely be on upgrades, rather than price. However, upgrades can end up being worth thousands of dollars and a better deal than simply getting a reduction in price.