Buying a new construction home is a great thing, but it’s not the same process as buying a resale home. Here’s how it’s different.
As promised, today we’re going to go into the nitty-gritty of why purchasing a new construction home is so different than purchasing an existing home for sale. Many times, someone will drive past a builder’s sign that says homes are starting at, for example, $600,000. What does that base price include?
We’ve worked with all different builders and have pretty good ideas of what’s included and what’s not. We know how to read the base spec sheets and communicate that information to you clearly and concisely. Full disclosure: The number on the sign probably doesn’t include everything.
“A large down payment gives the builder insurance.”
Another thing we’re always asked about is the down payment amount. Typically, the builder will require you to have more skin in the game than a regular homeowner will. They will probably require around $10,000 at the time of purchase agreement and another $15,000 at framing. Obviously, every builder varies a little bit, but if you’re putting your selections and design choices into the property and something were to happen, the builder needs to be able to recoup and sell that property. The down payment gives them that insurance.
How do you come up with that down payment? One option if you already own a home is to take out some equity.
Financing options will be a little different for new construction as well, but you still have plenty of options. Having a professional on your side with experience in these types of homes is very important to help you weigh the decision of whether or not this is right for you.
If you have any questions for us about buying new construction homes or real estate in general, don’t hesitate to reach out via phone or email. We look forward to hearing from you soon.
