When you’ve decided you want to buy a new construction home, you’re ready to start a journey that can take anywhere from a couple of months to several years, if you opt for a custom-built home. The process of buying a new construction home resembles existing home purchases in some ways, but comes with the added excitement of giving you more choices and the opportunity to watch your home come to life.
10 steps to buying a new home
Breaking down the new construction purchase process into a few steps can make it more manageable. You can rely on the expertise of lenders, sales professionals, and designers to guide you through the following steps:
- Consult a lender. You may end up switching to a lender recommended by your builder, but before you start looking at homes you should have a free consultation with a lender who will review your credit, income, and assets and provide you with guidance for your housing budget and pre-approve you for a mortgage. Gather funds in an accessible account for your deposit.
- Establish your priorities. Make a list of your needs and wants for your neighborhood and new home, including commuting distance and proximity to things you like to do. Your list may change as you visit different communities and see different potential houses.
- Start visiting communities and model homes. You’ll learn more about what you like in your price range. You can work with the sales professionals who work directly with builders to find exactly what you want.
- Choose a community and a builder. You can first narrow your choice by deciding which community and which builder fits your needs, your wants, and your budget.
- Choose a lot and a floor plan. Work with the sales professionals to choose a lot and a floor plan that can be built on that lot within your budget. Make sure you understand which features are included and the price of your preferred options.
- Sign a purchase agreement. Sign your purchase paperwork and provide a deposit of one to five percent of the sales price.
- Finalize your financing. Confirm your lender and your loan, and lock-in your mortgage rate so you’re prepared for the closing. Make sure your funds are in place for your down payment and closing costs. Don’t make any major purchases or apply for credit until the sale is complete so you don’t jeopardize your credit or financing.
- Make your design choices. Depending on the builder you choose, you could have a complete array of personalized decisions to make, a simpler choice of good, better, or best, or perhaps the option of one or two different color palettes for your new home. A design center specialist or sales professional can give you advice.
- Prepare for inspections and insurance. Follow the lead of the sales professional or your real estate agent to see which inspections you can attend and how often you can see your future home during construction. You’ll need to buy homeowner’s insurance and prepare for your move while the home is being built.
- Go to the closing. Your final step requires you to sign papers, walk through your completed property, and celebrate your new home. This is the fun part!
Now that you have a better understanding of the new construction buying process, you’ll be able to choose exactly what’s right for you and your budget.