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Buying "new construction" is a bit different from buying a previously-owned home. For one, because there is no previous homeowner, you don't have to deal with a seller's emotional tie to the property, which typically influences the negotiating process. Whether you're designing and building a custom home or buying a home that's built on spec in a new subdivision, you'll only have to work with the builder.

As with buying a previously-owned home, you have to figure out your budget and secure financing before you even begin house hunting. Get pre-approved by a bank or mortgage lender. Decide how much money you want to invest in a new home. And don't overlook the extras like property taxes, insurance, furniture, window treatments, landscaping costs and maintenance that can drain your bank account.

If you're considering buying a newly-constructed home, follow these five steps to guide you through the process:

Step 1: Weigh the Pros and Cons

Nothing beats the feeling of being the first person to live in a newly-built home. Everything is shiny and untouched.

You can buy a brand-new home in one of three ways: buying a house already built on spec; having a semicustom home built as part of a development (you can choose from a set palette of finishes and upgrades); or having a purely custom home designed and built to your specifications.

But before you get caught up in the sparkling new paint and granite countertops, evaluate your situation and see if new construction fits your lifestyle. Here are some questions to ask yourself, particularly if you fall within the first two methods of new-home buying:

  • New homes are typically far from the city center; will you mind the commute?
  • Are you willing to coax a new lawn into existence, and can you wait 20 years for sapling trees to mature?
  • Will the cookie-cutter nature of new subdivisions drive you bonkers?
  • New houses tend to be built right on top of each other. Do you mind the closeness and potential lack of privacy?

Step 2: Research Neighborhoods and Builders

When buying in a new subdivision, consider working with a buyer's agent who knows the area well, can set up home tours and walk you through the closing process. When researching real estate agents:

  • Remember, the listing agent works for the builder, not for you. They're trying to hit a quota, not help you make the right decision for you and your family. CALL ME FIRST! (901) 270-3779 TO SCHEDULE A SHOWING.
  • Many states regulate how agents deal with new subdivisions. If you have your own agent, tell him up front that you're interested in looking at new homes. He must accompany you on your first visit to any new subdivision; if he doesn't, the builder's sales rep will get the full commission if you buy a home there.

When researching neighborhoods:

  • Look online for listings for new home construction.
  • Drive around the neighborhood and check out the amenities and the quality of the homes.
  • Walk the community. Ask homeowners about their experience.
  • Go to model open houses, keep a journal and take photographs. Don't try to cover every model house in the area in one day.
  • Check with the developer about potential homeowners' association (HOA) fees and rules; some are incredibly expensive -- and strict. They may not allow storage sheds, certain paint colors or finish materials, solar panels or even vegetable gardens. Be sure to find out if the HOA can assess penalties for infractions.
  • Ask whether cable and Internet are readily available and from what companies; your new house will be wired for cable but that does not mean the cable company offers service to your neighborhood.
  • If the development is still under construction, you'll be dodging giant contractor trucks and facing jackhammering at 7 a.m. for a while.
  • Research the zoning laws for the neighborhood, as they can change quickly.
  • Visit the city planner's office to see what's in store for a particular location.
  • Ask your agent about plans for the area.

Whether you're buying a new home that's being built or building a new home from the ground up, you can choose the builder you work with.

"The buyer is more educated today," says Rhonda Hoeft, area sales manager for The Estridge Collection in Carmel, Ind. "It's amazing how much they know as opposed to five years ago. At least 80 percent of prospective buyers who walk into our sales office have researched our homes and the builder."

When researching builders:

  • Make sure there are no Better Business Bureau complaints on file against your builder's company.
  • Ask me if the builder has a good reputation in the community.
  • Visit your builder's previously constructed homes; ask the occupants whether the craftsmanship has stood up to time, use and weather.

Step 3: Know What's Standard and What's Extra

Ask the builder about amenities and upgrades. Amenities are features that benefit the entire community like a clubhouse, health and fitness center or a gated entrance. Upgrades refer to added features or items you pay extra for to enhance your home, like certain types of flooring or appliances.

Get a feature sheet on the line of homes you're interested in and read them very carefully, then compare feature to feature. Find out what comes with the base home price.

If you don't understand exactly what the builder is offering, ask and take notes. There are no dumb questions. Not knowing can cost you real money. Some things to keep in mind:

  • If the stove is included, visit the showroom to see the model. If you're offered the basic stove and you're a gourmet cook, it makes sense to buy the upgrade.
  • Make decisions on upgrades early in the process -- every change costs money.
  • Have a good idea of what you need and want. They are two different things when it comes to upgrades.
  • Builders rake in the cash on upgrades because they can get parts and labor relatively cheaply. The markup is huge, so investigate each option you're considering to see whether it would be cheaper to bid it out after you move in.
  • Builders, in general, need to sell quickly to make a profit. If you're stuck haggling over price, get them to throw in the upgrades you want at a reduced cost or for free -- it's a way to get more value that's appealing to both sides.

Step 4: Get an Inspection and Home Warranty

Once you decide to buy a new home, make your sales contract contingent on a final home inspection by a professional you hire. Never assume that because a home is newly constructed, it isn't going to have defects. Municipal inspections for code violations are nowhere near as thorough as an independent professional inspection. If possible, have the home checked during each phase of building, when potential problems are easier to spot. If the builder objects to this, consider it a red flag.

Protect yourself with warranties. All new homes come with an implied warranty from the builder stipulating that any major defect of the structural integrity of the home must be repaired. Ask for a builder's warranty for a period of time following move-in (a year, for example) that covers any defects in craftsmanship. Preferably, this warranty should be backed by insurance.

Home warranties vary in length, what they cover and typically run from one to 10 years; the manufacturer covers appliance warranties. Make sure any warranty you receive explicitly states what is covered and what isn't, and what the limitations for damages are. For extra peace of mind, have your real estate attorney look over the warranty to make sure it's kosher.

Step 5: Close the Deal

Builders often have in-house mortgage lenders or ties to an outside lender. New homebuyers can use the builder's lenders or find their own financing. Ask me for information on special funding programs available for first-time buyers. Contact at least two lenders and compare terms, fees, rates and points.

If you're not comfortable with the legal process, get an attorney. Remember, sign nothing until you fully understand the meaning of the words.

New Construction Homes December 9, 2022
224
Listed
108
Avg. DOM
N/A
Avg. $ / Sq.Ft.
$566,900
Med. List Price
224 Properties
Page 1 of 19
$1,949,793
Neighborhood: Shepherd's Creek
5
Beds
5F21/2
Baths
0.37
Acres
2022
Year Built
254
Days on Site
10120713
MLS
SSEPTEMBER Closing!!!! Completely unique & stunning plan by Jeff Bramlett w/ 12' ceilings in majority of downstairs. Unbelievable features!! Endless cabinetry!! Grand staircase is showcased in a...
$1,650,000
Neighborhood: MONTEREY FARMS PH1
6
Beds
7F11/2
Baths
2
Acres
2022
Year Built
14
Days on Site
10138249
MLS
Look at this house plan and imagine living here, 2-acre lot. If you want the land and plan only, $185,000 without the build. Come see this nice and quiet neighborhood. Experience living outside the...
$1,475,000
Neighborhood: THE CLOISTERS
5
Beds
5F11/2
Baths
3.42
Acres
2021
Year Built
20
Days on Site
10137991
MLS
This magnificent Oakland, stately home is newly built &situated on 3+acre cornerlot w/pond. The causal, sophisticated home opens into a spacious office & dining rm overlooking pond, living space w/6...
$1,400,000
Neighborhood: ALLELON
6
Beds
4F11/2
Baths
2022
Year Built
23
Days on Site
10137474
MLS
Fabulous 2022 build by Vesta Home Builder David Clark. All the character, charm and finishes you would expect in a home built by a Vesta Builder. This home was spared nothing with upgrades, from the...
$1,350,000
Neighborhood: ALLELON
5
Beds
4F11/2
Baths
2022
Year Built
103
Days on Site
10132334
MLS
Built by Bobby East with East Construction Co. Multiple award Vesta winner! Designed by Scott Hyman. Beautiful new construction in Allelon! Private gated neighborhood located in West Germantown. Easy...
$1,349,000
Neighborhood: ALLELON
5
Beds
5F11/2
Baths
2022
Year Built
85
Days on Site
10133652
MLS
The Allelon private, gated community conveniently located in western Germantown is a delight-fabulous new homes selling fast! This sharply finished home boasts fresh clean & bright decor; a...
Open 12/11
7086 N Allelon Cir Germantown, TN 38138
$1,295,000
Neighborhood: ALLELON
5
Beds
5F11/2
Baths
0.37
Acres
2022
Year Built
322
Days on Site
10116233
MLS
Just Completed, designed by architect Carson Looney of LRK & quality built by Fred Cohn w/interior selections by designer Anne Parker. Super open concept floor plan, Upscale plumbing & lighting...
$1,295,000
Neighborhood: ALLELON
5
Beds
5F11/2
Baths
2022
Year Built
85
Days on Site
10133646
MLS
Make your own selections while you can! The Allelon private, gated community conveniently located in western Germantown is terrific - fine homes selling fast! Highlighting an open bright plan; 2nd...
Open 12/11
2485 N Allelon Cir Germantown, TN 38138
$1,189,000
Neighborhood: Allelon
5
Beds
4F11/2
Baths
2022
Year Built
42
Days on Site
10136690
MLS
Brand New Home in Sought After Gated "Allelon Subdivision" in Germantown. Well-Built By Griffin Elkington Feat. Open Plan & Desired Finishes To Fit Today's Modern Lifestyle. All Hardwood Floors Down...
$1,100,000
Neighborhood: Greenway Gardens
5
Beds
4F11/2
Baths
0.4
Acres
2022
Year Built
127
Days on Site
10130507
MLS
Beautiful Klazmer/Sklar built home in East Memphis, featuring 5 bedroom and 4 full baths 1 half bath, beautiful finishes and open floorplan. Features 2 bedrooms down, tons of open living space,...
$1,100,000
Neighborhood: MASSEY GREEN
4
Beds
4F11/2
Baths
0.23
Acres
2022
Year Built
53
Days on Site
10135980
MLS
Welcome to this gorgeous new Klazmer / Sklar home in the heart of east Memphis! Enjoy the open, spacious floor plan, w/beautiful 9" wood floors that welcome you & are found thru-out the1st floor....
$999,994
Neighborhood: DEERWALK PH1
5
Beds
5F11/2
Baths
2022
Year Built
51
Days on Site
10136141
MLS
Incredible New Construction!! This home features 5 bedrooms and 5.5 bathrooms. It has so much to offer! Large ceiling fan above the beautiful great room, opens to the fabulous kitchen! The black and...