Building a House? Follow These 12 Tips for New Home Construction

Finding the perfect home is never easy, especially when housing inventory is low. If you can't find what you want on the market, you can build your dream home instead!

Designing your own home is exciting, but there's a lot that goes into the building process. Here are 12 new home construction tips to help you navigate this intricate process.

1. Research the New Build Construction Process

The best thing you can do to help you prepare is to learn as much about the new construction process as possible. From assembling the right team to construction timelines, there's a lot to uncover.

You'll also want to decide what type of new construction house you want to build.

If you prefer to do most of the planning, you'll want to consider a fully custom or semi-custom home. If home design isn't your cup of tea, you might be able to buy a production or spec home.

2. Set Your Budget

Your budget plays a big role in many of your new construction home decisions. According to the National Association of Home Builders (NAHB), the average cost to build a 2,600-square-foot single-family house is $644,750.

It's not uncommon for a new build to go over budget, so give yourself an estimate and leave extra room for unanticipated costs.

To help you stay on track, have a detailed plan and work with the right professionals. Pick your non-negotiables and keep all lines of communication open.

3. Find a Buyer's Agent Who Specializes in New Construction Homes

When you begin your search for a real estate agent, find a local buyer's agent who specializes in new construction homes.

Not only will they be able to provide valuable insight into local developments and market conditions, but they may have access to builder networks and can help you manage the building timeline. Your agent can also give you additional construction home buying tips!

Your real estate agent will always have your best interest in mind and can be a valuable resource for learning about your new construction home.

4. Work With a New Construction Mortgage Lender

Only some mortgage lenders will finance new construction. The construction company will often have a builder's preferred lender, but you aren't required to go with the builder's lender. Look around and get quotes from several construction lenders to compare rates and terms and find the best deal.

Builders only want inquiries from serious construction home buyers, so you'll need pre-approval for a construction loan before approaching a builder.

5. Find a Highly-Rated Local Builder

Do your own research on the best new construction builders by looking at model homes and other examples of their work. Read online reviews on websites like the Better Business Bureau and Google Reviews and see if you can find any complaints or issues that could affect your decision to work with them.

Keep an eye out for the following:

• How many homes they've built
• If the same problems keep coming up in different reviews
• Did they have glowing testimonials?

And don't be shy! Visit some of the builder's recent developments and ask several owners whether they recommend the construction builders.

Also, research the builder's area of expertise and the type of floor plans they are known for to see if it’s a good fit. Do they only build spec, or do they do custom homes as well?

Again, your real estate agent is your best resource here. The right agent has first-hand experience with builders and can tell if there are any you should avoid. 

If they don’t have a model home to tour, your agent can help you find past projects and potentially help get references from other agents, past clients, and their general networks to make sure you make an informed decision. The last thing you want to do is commit to a builder who doesn’t stick by their word.

6. Pick the Right Lot

Do some digging into potential neighborhoods.

What amenities are or will be available? Are nearby shops within walking distance? What about the neighborhood's homeowners association? What are the monthly fees?

Developments will also have different lots to choose from. Pay attention to how close it is to the main road and the direction the home will face. Ask the builder about the slope of the lot and how it will affect drainage.

Don't forget to research future developments around desired lots. It may be quiet and peaceful now, but you never know what plans the city could have in the coming months or years!

7. Choose Upgrades With High Resale Value

Selling your newly constructed home may be the last thing on your mind, but choosing upgrades with a higher future resale value can ensure you get the most bang for your buck.

Realtor.com says some of the most valuable builder upgrades are in the kitchen and bathroom or help improve your home's energy efficiency. Builders will also offer finishes that are on trend but do your own research before choosing things like flooring stain, kitchen cabinets and countertops, and bathroom tiling if you want to try to appeal to future buyers.

8. Plan Ahead

Choose a floor plan while keeping your current and future needs in mind. Do you need an office space or plan on growing your family? Your floor plan should suit your lifestyle right now and how you envision it to be in your newly built house.

If you choose a smaller floor plan, make sure there's enough storage space. This will help you keep everything organized and avoid clutter.

9. Negotiate Where You Can

It never hurts to negotiate, but don't always expect price reductions! You may find that it's usually easier to bargain on things like upgrades or closing costs rather than the final price of your construction home.

In areas where the supply of homes is greater than the demand, you may find home builders who are more likely to negotiate on the sales price or upgrades. Your real estate agent will be able to advise you on how to maximize the benefits you can get from the builder.

10. Get a Home Inspection

Some home defects are difficult to spot. A common mistake is thinking you can skip the inspection because it's new construction.

While a home inspector can't check if the home meets local building codes, they can identify defects or dangerous conditions. Mistakes can happen, even with a newly built home. You'll want to address these before the final walkthrough.

11. Make Sure Everything Is in Writing

Read the fine print and keep all documents related to the construction home buying process. This includes the purchase contract, financing documents, and home warranty and builder warranty.

Most builders offer builder warranties on their work for a limited time on newly constructed homes. If you receive a builder's warranty, read it over to see who handles problems (the builder or third-party insurance) and what's covered.

12. Don't Expect Your New House to Look Like the Model Home

Model homes typically showcase all the upgrades to attract buyers, so don't expect your new construction home to look exactly the same. Your brand new home will still have everything you selected during the initial phase of the building project.

Buying a New Construction Home Comes With Perks and Challenges

Every type of real estate transaction has its own set of challenges, especially for new construction. The best way to handle anything that comes your way is to assemble the right team of professionals, do as much research as possible, and manage your expectations.

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