When building a brand new home, it is important to know all the steps along the path to minimize headaches and potential financial risks. Be sure to read about New Construction Warnings before moving forward with a new home.
Path & Post recommends buyers pay for home inspections both pre-drywall and upon completion of construction, from a home inspector certified in new home building codes. New homes are never perfect, and they can even have structural defects. Path & Post can recommend a top new home inspector based on our many years of experience.
Building in a New Home Community
Spec Home: The most affordable way to have a new home. An already built/existing new home is called a spec home, meaning it was built speculatively for any buyer to come along and choose it.
Pre-Sale Home: If a new home in a neighborhood is yet to be built, the purchase process is called a pre-sale home contract. This type of contract includes details of the home’s features, upgrades, allowances, floor plan and lot selected in the contract, along with any special stipulations or promises the builder has made. Buyers of a pre-sale in an established new home community are usually limited to the floor plans offered by the builder, with some builders allowing additional customization options.
*IMPORTANT TIP: The onsite agent in a new community works only in the builder’s best interests. Buyers should always have their own buyer agent who represents their best interests. Broker fees for the buyer’s own agent are typically paid for by the builder.
Deposit Money: Most builders require a non-refundable builder deposit to start a new home, because they are having the expense to build a home for a specific buyer whose selections are unique to that buyer. Often the deposit is around 10%. Since it is non-refundable, buyers need to make sure they are fully qualified for the purchase before moving forward and risking a significant deposit. Buyers also need to research the builder and make sure they are comfortable with their quality, financial stability, and reputation.
Most builders in a new home community will require any selections exceeding allowances built into the contract or changes during construction be substantially or fully paid in advance since those are unique to the buyer.
In this type of new home construction, the buyer doesn’t own the property until the time of closing.How To Build A Completely Custom Home