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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 April 15, 2021
90
Listed
97
Avg. DOM
N/A
Avg. $ / Sq.Ft.
$434,950
Med. List Price
90 Properties
Page 1 of 8
$1,448,863
Subdivision: Shepherd's Creek
5
Beds
5F11/2
Baths
0.39
Acres
2021
Year Built
28
Days on Site
10095482
MLS
Prestigious Magnolia Home w/plentiful sunlight facing west overlooking 2.5 acre pond w/2 large fountains in Shepherd's Creek's Final Phase. Iron driveway gate opening to breathtaking home featuring...
$1,299,000
Subdivision: Chapel Cove Phase 1
5
Beds
5F21/2
Baths
2020
Year Built
380
Days on Site
10073969
MLS
PROPOSED HOME to be built by Dave Moore Companies in Chapel Woods has 5 bedrooms, 5 full baths and 2 half baths. Each bedroom has a private full bath. Vaulted Kitchen opens to vaulted porch which...
$1,295,000
Subdivision: EAST END
5
Beds
5F31/2
Baths
0.4
Acres
2020
Year Built
119
Days on Site
10090633
MLS
High on it's hill in Historic East End sits a beautiful new stone Aerie. This is a classic home with all the comforts of new construction; smooth high ceilings, gracious rooms, stunning millwork,...
$848,900
Subdivision: lot 73 Princeton Park
5
Beds
4F11/2
Baths
2021
Year Built
14
Days on Site
10096382
MLS
New Listing!! Gorgeous New Construction in heart of E. Mphs! Apprx 4300 htd sf! 5Brs(2Brs Down!),4.5BAs+ 9x7 office dwn+Gamerm! Cvrd Bk Porch, Lrg 80'x170' Lot! 10'Ceilings Dwn, 9' Ceilings up!...
$820,000
Subdivision: Somerset
4
Beds
4F11/2
Baths
2020
Year Built
259
Days on Site
10081781
MLS
Stunning new construction in Somerset convenient to neighborhood shopping, dining, schools and amenities that make living easy. Current designs make this 4 bd 4.5 bath home ready for your family....
$775,000
Subdivision: Washington Grove
4
Beds
3F11/2
Baths
2020
Year Built
36
Days on Site
10094866
MLS
Welcome to Washington Grove! Stunning new construction a short walk to the historic Collierville Square. Prepare to be in awe of the gorgeous vaulted ceilings with beam details. The open concept...
$747,900
Subdivision: Piperton Preserve PH1
5
Beds
4F11/2
Baths
2020
Year Built
291
Days on Site
10079629
MLS
You owe it to yourself to tour this 5 Bedroom(4 Down) 4.5 BA Beautiful Home with 3 Car Garage & Overhead Storage. This stunning home has Nailed Down Hardwood Floors with Extensive Wood Cabinetry and...
$745,900
Subdivision: Piperton Preserve Ph1
5
Beds
3F11/2
Baths
2020
Year Built
291
Days on Site
10079627
MLS
This 5-Bedroom 3.5 Bath home offers an Over-sized 3-Car Garage with Overhead Storage & Separate Friends Entrance. The Open Floor plan has Nailed-Down Hardwood Floors, Extensive Solid Wood Cabinetry...
$740,000
Subdivision: Stockley
5
Beds
4
Baths
2021
Year Built
67
Days on Site
10093242
MLS
Lot 12 Stockley PD. Fabulous Jeff Bramlett designed home featuring 5 Bedrooms, 4 Full Bathrooms, Bonus Room, 3 Car Garage and nice covered patio overlooking fenced backyard. Open floor plan design...
Open 4/18
340 Washington St Collierville, TN 38017
$734,900
Subdivision: WASHINGTON GATES
4
Beds
4F11/2
Baths
0.24
Acres
2020
Year Built
24
Days on Site
10095670
MLS
Renowned Builder Mack Andrews Latest home Off the Collierville Square , Spectacular Home , Open Floor Plan including Large Dining Room, Spacious Great Room overlooking Chef's Kitchen , Butler's...
$689,999
Subdivision: Cypress Grove
5
Beds
4F11/2
Baths
2021
Year Built
1
Day on Site
10097165
MLS
Stunning Magnolia Home in new phase 3 Cypress Grove! Nice size, yet low-maintenance, backyard! Fountain ponds & common open space - near Hinton Park! Extensive hand-selected luxury finishes! 5BR,4....
$669,900
Subdivision: Rolling Meadows Ph3a
4
Beds
3
Baths
2020
Year Built
350
Days on Site
10075700
MLS
Model home in Collierville, a Regency Homebuilders community. This Graham floor plan is a 3500 square foot model home featuring 9 foot ceilings downstairs and 8 foot upstairs, as well as open concept...