For anyone who’s a fan of the popular TV Series ‘How I Met Your Mother’, you might remember one of Barney Stinson’s rules was ‘New is Always Better’. In real estate, that can be true as well. Buying a new construction home certainly has its perks, as well as a few downsides, but i’m here to help guide you along the way in this process. It’s not the same kind of process as buying a resale home. At the bottom of this blog, I also will have a link to a new construction version of the MLS, which is built right into my website.

On one hand, you are the first person to ever live in that home. Unless you were building what’s called an ‘inventory home’, it was built for you, designed by you, and may have a few custom touches just for you. On the other hand, the lot sizes can be much smaller than older homes, especially in a lower price range. You also can run into trouble if you don’t know what you’re doing when buying the home. This is why I always recommend to HAVE A REALTOR help you! You don’t pay us to help you buy a home, the builder does, and the builder does not drop the price or sweeten the deal if you don’t have a Realtor. So it’s to your advantage to get one (ME) to help you.

Here’s a few things to note when buying a new construction home:

They’re More Expensive

New construction homes are always more expensive per foot than resale homes bearing the same updates. Labor and material costs rise, and limited land makes it valuable when scarce. You don’t always have to buy new when there may be a very similar home built just a couple years ago resembling the new build for a cheaper price.

Get Approved in Advance

This is just a general rule in all of real estate. Make sure you’re approved by a mortgage lender before going out and looking. I was out at a new construction site with a client just the other day, and they had their own sheet showing the home buying process. Nice graphics and all, but they listed ‘Sign The Contract’ as the first step, and then ‘Get Approved by Lender’ as the second step. That’s not right at all. You have to put a deposit down on the home when signing the contract so, if you’re not approved for a loan, it’s possible you can lose your deposit! It costs you nothing to get approved in advance, and can save you a major headache down the road.

New Construction Doesn’t Mean Building

There’s a few types of new construction homes. The one with which most are familiar is building from the ground up. There’s also inventory homes. Inventory homes are already built, and are generally done so as a way for the builder to have product to show potential buyers. They can be bought as is, and in a regular timeframe as buying resale. There’s also ones which may currently be under construction in one phase or another, and can still be bought in current condition and closed on when completed. 

Know What’s Base and What’s Upgrade

If you’ve been looking online, most builders have websites or ads saying ‘Homes Starting at $XXX’. That may be for a base model and the smallest home with no upgrades in the home. Now not every builder does this, but hardly any of them list what’s a standard feature and what’s an upgrade until you go to the sales office. You may be able to better customize your home if you buy a base model well below your price max and load it with features rather than buy a home already loaded with upgrades you’re not fond of.

It Takes Time

Unlike buying a resale home, it takes time to close on a new build. Minimum 6 months in most cases when you’re building from the ground up, and even longer for larger or more upgraded homes. I’ve had an $800K new build home take 11 months to build, but i’ve also had a $400k home take a year. There are some builders who can do homes faster. I also have had a client out in the country get into her home from dirt to closing in 3 months. Just depends on the city and what permits are required. But don’t go out looking to build with two months less in your lease unless you’re set on buying an inventory new build.

Taxes Will Go Up

Your property taxes will be very minimal for the first calendar year you’re in the home until the county can assess what the land and home combined are worth. A good lender will have already estimated what your property taxes will be when assessed, and help you plan your escrow account accordingly. I’ve heard too many cases of ‘my taxes went up thousands the year after we bought, and now we have to sell because we can’t afford it’. Don’t be surprised, be informed.

The Builder’s Lender Isn’t Always the Right Option

Most new build communities have in-house lenders they try and mention as much as possible to the buyers. The lender may offer incentives to use them, such as paying the title policy (which can be thousands of dollars) and is normally a buyer charge in a new build. You have every right to use your own lender. It’s a violation of Consumer Financial Protection Bureau laws to mandate anyone use any lender or insurance company during this transaction. There are also mortgage programs out there which may be better for you than the ones offered by the in-house lender, such as First Time Buyer Programs or Medical Professional Loans. Be informed, and let me help you do your research before deciding on a mortgage lender. It could be a major financial mistake to not get the right lender.


Most people who go to a new construction neighborhood and don’t use a Realtor either think they have to pay for the Realtor to help them, or think they can get a better deal on the home by not using one. Both are completely false. Buyers don’t pay for their Realtor, and Builders have marketing accounts set up to pay Realtor commissions in advance of selling the neighborhood. Builder reps work for the builder, not the buyer. So basically by using me as your Realtor on your new home purchase, you don’t pay me for my services, and you get to have someone looking out for your best interests instead of their employer. That sounds like a win-win to me.

Ready to buy? Schedule a phone call with me to get the process started! I can help you get set up with mortgage and insurance people to make sure you’re able to buy a home and have the best coverage.

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You can also get a copy of my Home Buyers Handbook when buying to learn about the process!

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