Buying a New Construction Home-
Changes & Tips 2021
Buying a New Construction Home-
Changes & Tips 2021
You may have watched my prior video on Tips for a New Construction Home. But since the pandemic, a few things have changed.
Today I’m talking about those changes and things you need to know when buying a New construction Home in the Greater Lakeland area and how you can make smart decisions in todays crazy Real Estate market.
For todays blog on Tips when Buying New Construction, We’re focusing on planned development communities and larger builders.
Some of the things we will be discussing today will not apply if you are building a high end, custom home. But stay tuned, I’ll be publishing another video very shortly about this special class of New Construction homes.
The number one question I get from those looking at New Construction as their next home is:
‘Is the price I see on the website, the price of the home?’ Or, What does it mean when the sign says “ Starting in the $200’s’?
You may have been driving around and saw one of these signs on a new Construction development and decided to pop into the model center. After speaking with the Builders rep, you discover that number is a bit higher in the end. But why?
Firstly, that “starting at” price is True because it is based on the lowest price floor plan that builder offers in that community, no upgrades and no premium lot.
The good news is, there’s recently been a few changes that most builders have implemented to take the guess work of the available homes to be built and also to pare down the projected estimated completion date.
Again guys, we’re talking about planned Development builders in the median, New Home Construction price range for the Greater Lakeland areas.
So let’s talk about a few different costs you may have with your New Build....
First, is the Base Price of the home. This commonly known as the floor plan you have chosen with No upgrades or Lot premium.
*And just a side note..There is not an added cost for the ‘lot premium’ on every lot in the community. This is only for lots that the builder considers better than other lots. For example a lot than has a water feature or a conservation view would be considered a premium lot..Opposed to a lot that backed up to another home or main road.
Another factor that could increase the price of the home is the personal options you may choose.
It’s important to know the difference between structural and cosmetic options. Those can add up fast and depending on your choices, and could price you right out of the home.
For details about this and more, you’ll want to check out a few of my prior videos, where I talk about how to make the best choices based on your personal situation coupled with how long you think you plan to stay in your new build.
Stay with me, because some of the recent changes some builders have made will make this process a lot easier for you. Plus, you’ll know straight away what that particular home costs and a tighter projected completion date.
Some builders have elected to release homes or lots for sale based on the floor plan and pre-chosen finishes and in some cases, at a predetermined construction stage.
You can lock in your lot and purchase price at contract time without wondering if the prices are going to increase....
For example, a builder may advertise they have 4 lots or homes available for sale. On those homes sites, the builder has already chosen the floor plan, and finishes that will go on those lots.
So you know ahead of time what that home costs, what build stage that home is in and a much tighter projected completion date.
Personally I’m liking this recent change. My New home buyers know ahead of time what they are getting and for how much.
And before you start thinking...”Yea, but what kind of finishes are they putting in these homes”? And how do I know when these homes become available to try to avoid the stressful multi-offer situation?
I will tell you this....Of all the builders I work with, I like what I’m seeing. But Not all builders are alike. and they all have their own business plans as to how and when they release homes or lots to be sold.
Which brings me to the number one tip : Always Have your Own representation when buying a New Construction Home. If you follow my channel, you’ve heard me say this more than once.
As a perspective New home buyer you may be confused when you go into a New home model center and the builders rep answers your initial questions and wonder why you need your own Realtor.
The answer is very simple. The Builders representatives work for the builder. Not you.
You need your OWN representation, especially one that is familiar with the building process and who can be your advocate.
And most importantly, choose your Realtor prior to going to the model homes.
The reason for this is because if you register with a builder without letting them know you have a Realtor, you will waive your right to your own representation.
Some builders have implemented some recent changes where they no longer recognize Realtors as the buyers contractual representatives. In my opinion these builders are shooting themselves in the foot.
I personally know many of the builders representatives in the Greater Lakeland area, and proud to bring my buyers to consider their builder.
And honestly, there are a few that I would not recommend.
You should never feel pressured when visiting a model center and speaking with a builders representative. If you have any doubts, step back and call your Realtor.
My next tip is how we negotiate with builders.
Firsty, Builders flat do not negotiate on their base prices. The price is the price.
As long as we are in a sellers market and homes continue to sell, there’s no reason for them to negotiate the prices.
However, most large builders are open to negotiate add-ons or incentive credits.
The biggest incentive most builders offer is to pay a large part of your closing costs, essentially alleviating you from having to come to closing with the addition funds needed aside from your down payment.
Sounds pretty enticing, huh?
And this incentive can be a very good thing..especially if you have limited cash in hand to get into a home.
In order to receive this credit from the builder, you have to agree to use their lender. Again, this can be an awesome incentive...But do your homework and shop lenders first.
Your Realtor can best advice you on what to ask for, based your financial situation, your long term goals or your “must have” list.
Do you have a home you’re selling or in a binding rental lease? Of course, you’re probably going to want a seamless transition from your current home to your New Home.
Building and closing on a New Home is not like when you buy an existing home and have a defined certain date you are taking possession.. New Construction is subject to many factors that are beyond the builders control..
Like inclimate weather. A builder has no control over bad weather causing construction delays.
Nor do they have total control over material delivery delays or labor shortages. As a side note, these types of delays are directly tied to the pandemics ripple affects.
The good news is, I am seeing less and less of these type of delays here recently.
Believe me, the builder does NOT want to delay your closing. They do not make any money until you close!
There are just some things that are out of their control.
So what that means is, if you're selling your current house or you have a lease, that's going to expire closer to your New Home closing time... Have a plan is place at least one month ahead.
For example, If your renting and your current lease is expiring soon, Don’t sign a new long term lease..Instead talk to your landlord or property manager about a temporary month to month plan.
And if you are selling you home, ask your Realtor to negotiate an extended closing or a lease back to bridge the time you need to close on your new Build.
If these options are not possible, ask your Realtor to help you look into corporate rentals and put your things in storage. I know this seems like a big pain.. But it’s just a brief temporary solution...Don’t lose site of the big picture!
I Hope you found todays blog helpful. If you did, please tap the like button or share thoughts in the comments.
And if you’d like instant access to my New Construction website just click here.
There you’ll be able to learn about the builders, keep tabs on availability, set up your own customized property alert searches and more.
I’m Lisa Kelly...And As the real estate market continues to evolve and change with all that’s going on in the world right now, I’ll be right here giving you the latest as it happens.
Until then, I’ll see you on the next one.