Buying New Home Construction


September 8, 2021

Many people are more interested in buying new home construction than purchasing an older, previously owned house. Like buying a used car, they don’t want to inherit someone else’s problems. Everything is new, so there are no old appliances to replace, no chipped or gouged woodwork, no cracked walkways to trip visitors, and no leaky windows letting the frigid winter air blow through.

Best of all, a brand new home has many (or all) of the available energy-efficient building products and appliances, with the latest design trends and the best floorplans for today’s lifestyles. It is move-in ready, so all the homeowners have to do is…move in.

However, there are a few things to be aware of when buying new home construction directly from the building company. Here are some tips on ways to make it a more pleasant experience for the entire family.

When Buying New Home Construction, Hire a Real Estate Agent

Clients will likely encounter a sales agent first when meeting with a home builder or touring a model home. This is someone who works for the builder to sell properties. However, if the client is not personally experienced in real estate, it’s best to hire a real estate agent to help before purchasing any house. 

The builder pays their agent’s salary, and they likely earn a commission from each sold property. As a result, the agent may not be looking out for the customer’s best interests. When hiring a real estate professional, the client can be certain there’s someone in their corner to ensure they’re getting a good deal and protecting their interests.

Even better, this step shouldn’t cost anything because the builder usually pays the commission to the buyer’s agent.

Use the Right Lender When Buying New Home Construction

For various reasons, many builders recommend their preferred mortgage lenders or even have one in-house. Most importantly, this helps keep the profits with the builder and reduces their costs. Plus, the transaction’s progress is kept up-to-date with everyone involved. 

If a homeowner uses the builder’s preferred lender, some will offer special discounts and deals in return. For example, the builder might offer money off the home’s cost. But don’t agree to use the builder’s lender before first researching their customer service, ratings, reputation, and more.

Ask the real estate agent who they recommend, too. Plus, based on banking history, a homeowner’s bank might offer attractive terms and rates. Getting quotes from at least three lenders can save an average of $3,000. Ask about interest rates, fees, terms, prepayment penalties, and what they estimate the monthly mortgage payments will be. Shop around for mortgage rates to have a solid basis for comparison.


Understanding New Home Builder Warranties

When buying new home construction, there are two types of builder warranties: express and implied. 

An express warranty has more precise wording on what is covered and for how long regarding various aspects of the newly built house. It spells out the problems and remedies the builder is responsible for, the mechanism for disputing issues, and the warranty duration.

Based on local building standards and codes, an implied warranty covers any defects in workmanship that impact a new home’s safety, livability, and habitability. Implied warranties, for builders, usually have a 10-year liability cutoff period and these warranties are frequently vaguely worded.

Hiring an attorney or real estate agent to review warranties and the purchase contract may help avoid doing business with a dishonest builder. It’s important to read all warranties closely because some builders ask buyers to waive their implied warranty rights when an express warranty is offered.


Verify Options and Upgrade Prices When Buying New Construction 

Before upgrading any materials or features when buying new home construction, get all the details in writing. Be sure to understand what each upgrade will cost and how they will influence the final price. What about the cancellation policy? If the buyers change their minds, can an upgrade be canceled? 

Remember that some upgrades are easier to do before construction – such as security wiring or technology wiring inside the walls. Others can wait until later, like finishing the basement or upgrading flooring or countertops.


Choose Upgrades to Increase Your New Home’s Value

Enter a builder’s showroom, and the add-ons and options seem unlimited. But, it’s important to choose upgrades to boost value rather than making it simply look nice.

For example, safe investments are upgrading to hardwood or tile from linoleum flooring or from laminate to quartz countertops. Additionally, homeowners should consider the cost difference between an upgrade versus hiring a contractor to do the work later.

When buying new home construction, many don’t have landscaped yards. After the buyer moves in, that big-ticket project can cost thousands. Even if the home won’t be finished immediately, get estimates for all future items and tasks to complete the new house. Put money aside specifically for those projects.

Plus, most new homes may not come with towel racks, toilet paper holders, window coverings, and other little touches. So there are no surprises, determine what comes standard when buying new home construction and what will be paid for by the client.


Hire a Home Inspector When Buying New Home Construction

Even when buying new home construction, always get a final home inspection before moving in. This inspection offers a third-party assessment of the house’s structure and systems. It can also help to ensure the residence is a good investment, hazard-free, and safe.

In 2021, depending on the size of the home and the extent of the inspection, it can run from $300 to $1,000. Even with brand new construction, most inspectors still find concerns.

If the inspection reveals any significant issues or problems, go back to the builder and ask them to repair them. If they refuse, the builder might be willing to lower the sales price instead.


Joseph Douglas Builders for Your New Home

Award-winning Joseph Douglas Homes has been building custom family homes throughout southeastern Wisconsin since 1998. They are proud to offer their clients several options:

  • Joseph Douglas Homes can design a unique, one-of-a-kind home.
  • They will build a house using plans given to them.
  • Their clients can choose from one of their many custom floorplans. 

Most importantly, Joseph Douglas Homes’ houses are built to Energy Star standards and conform to their energy efficiency’s highest criteria. In every home they construct, they use energy-efficient equipment, such as direct vent fireplaces, energy-rated windows, doors, and insulation, power-vented water heaters, high-efficiency furnaces, and more.

This important focus on energy efficiency shows that Joseph Douglas Homes cares about the environment, our community, and lowering their customers’ utility costs.  

Joseph Douglas Homes is proud to bring its customers’ visions to life. They build outstanding custom homes by using high-quality craftsmanship, superior designs, and offering competitive pricing. Contact Wisconsin’s best home builder today!

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