Myths About Buying New Construction Homes

When it comes to buying a new home, buyers have the option of buying a resale home, one already lived in by another family, or a brand new home, recently constructed by a builder.  If it's our first home, we typically rely on information from others who have either gone through the process or believe they have all the right answers for every situation handed to them.  We all have someone in the family like that, but we still love them, lol! 

There are so many misconceptions about new vs. resale, so I thought I would share a few Myths About Buying New Construction Homes, along with the facts.

Myth #1: New Construction is Always More Expensive

• Fact: While the upfront cost in most cases will be higher, new homes offset that by reducing utility costs with modern energy-efficient features, and having fewer immediate repairs such as roof and AC unit replacement, which are big expenses anytime you have to do them.  New homes also come with a warranty!

Myth #2: No Room for Negotiation

• Fact: Builders may offer incentives such as closing cost assistance, upgrades, or price reductions, especially towards the end of the fiscal quarter or year.  Remember, if a home isn't selling as quickly as a builder would like, they have to pay carrying costs each month on that home so more often than not you may get a better deal on a new home.

Myth #3: Longer Waiting Time to Move In

• Fact: If you are starting a home from the ground up, yes, this will take time.  But many builders have move-in ready homes, reducing wait times significantly.  Homes can be closed on just as quickly as a resale home and in some cases faster.

Myth #4: Limited Financing Options

• Fact: Builders often have preferred lenders who can offer better rates and flexible financing options.  As I write this, builders in our area are offering rates as low as 4.99% while the national average is around 7%. Take those savings to the bank!

Myth #5: New Homes Lack Character

• Fact: Let's face it, we all have a different idea of what appeals to us and what doesn't.  New construction allows for extensive customization, should a builder offer that option, letting you personalize your home to match your style and needs.  I often hear that homes are so cookie cutter now days, and while there may be some truth to that, with such a range of buyers and budgets, there is a perfect home for everyone looking to purchase a new home.

Myth #6: New-Construction Homes are of Poorer Quality

• Fact: The construction principles of building a home generally do not change, regardless of the features.  The home still needs to be built to current building codes, which become more strict each year as they change.  Materials once used have been replaced with products that improve the quality of the home such as electrical wiring requirement, more energy efficient insulation and air conditioners, and plumbing.  In my opinion, a good construction manager makes all the difference in the world when it comes to the final product.

Myth #7: You Can’t Inspect a New-Construction Home

• Fact: Of course you can!  If you find one that will not let you, do not buy that home.  Most builders will allow you to complete a home inspection prior to closing on the home.  It will be at your expense and you most likely will need to have the inspection company approved by the builder.  Some builders will even allow you to have your inspection company come in at pre-drywall time if you are building from the ground up.

Myth #8: New Homes Lose Their Value Faster Than Pre-Existing Properties

• Fact: One of my personal favorites!  A new car yes, a new home, no.  In fact, if you are buying in a new home community, and you're getting in before the final homes are sold, builders continually raise prices as they sell homes, so that means continued equity for you!

Myth #9: You Don’t Need a Real Estate Agent to Purchase New Construction

• Fact: The truth is you don't.  You can work directly with the sales representative that represents the builder.  It's still a good idea to have someone representing you.  I have been on both sides of this equation working with buyers.  The builder representative will always have the builder's best interests at heart, not yours, and 9 out of 10 times, you will not get a better deal by doing in on your own.  Let an agent do the dirty work for you, builders have already accounted for the expense of having to pay an agent represent you, take advantage of it.

There you go!  Understanding these myths can help you see the potential benefits and opportunities in purchasing a new construction home.  Happy house hunting!

On my website are free booklets that will walk you through the entire home buying process, help you understand more about mortgages and your credit. 

May the Good Lord bless the path of your new home journey!