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Buying a New Construction Home? Here’s What You Should Know

Homeowner October 15, 2019
Arthur Brodskiy
Arthur Brodskiy

Buying a newly constructed home is the preferred route for homebuyers who have specific needs and desires for their home. If you demand total control over your home’s features, from the layout and exterior siding to the flooring material and countertops, getting a custom-built home is the best way to go. 


The new construction home buying process is a little different than buying an older home. In this article, we’ll go over some things for you to consider as you navigate the new construction home buying process. 


Decide What Kind Of New Construction You Want


Not all new construction homes are created equal. There are three categories of new construction: on-spec, semi-custom and custom. On-spec homes are sold as-is. With semi-custom and custom homes, you get to choose layouts, colors, finishes and materials. It’s up to you to decide which direction you’d like to go. Most subdivisions have a handful of model homes for prospective buyers to browse through and get an idea of the different possibilities. Make a list of the features you want and it’ll help you narrow down your search. 


Get a Buyer’s Agent


Builders usually have their own seller’s agents, but your best option is to get your own agent. The problem with seller’s agents is they don’t always have your best interests in mind. And since they don’t get the sort of commissions real estate agents get, their motive is to sell as many homes as they can as quickly as possible. 


So shop around and go with your own agent. Getting a buyer’s agent before you walk into the new construction management office is a critical first step. If you go in alone, the seller’s agent could end up with commission rights to the sale. 


Do Your Homework




Just like with any major purchase in life, buying a new construction home requires a lot of research up front. You want to make sure you’re buying from a reputable builder. You also want to know everything you can about the neighborhood you’re moving into. Learning as much as you can now will prevent any surprises down the road. 


Let’s start with the builder. Your first step should be to perform a Google search on the builder you’re looking into. See what other construction projects pop up. You should be able to find some customer reviews. After that, you can go even deeper and look into public court records. If the builder has had any lawsuits filed against them in the past, you’re going to want to know about them.


Your research should go beyond the builder. What are the local codes in the neighborhood or town the new development is in? Are there any HOA fees involved? Sometimes the rules can be pretty restrictive. For example, you might only be allowed to paint your home a certain color, have to adhere to specific landscaping requirements, or may not be allowed to have solar panels or satellites on the roof.  


Another thing to consider is the location. Most new developments happen far outside an urban center. What sort of commute are you going to have if you move into this particular neighborhood? Factor in the extra time you’ll spend getting to and from work. 


Get a Warranty


Having a warranty for your new home will help protect you from problems in the future. Some builders may offer their own warranties. You may also choose to get your own warranty from a third party. Warranties fit into two different categories: implied and express. 


Implied warranties are automatically included with the purchase of a new home according to local or state laws. They deal with more vague topics such as the general liveability and safety of the home. Smaller concerns like appliances and cosmetic issues aren’t going to be covered in an implied warranty. 


Express warranties are more specific warranties offered by the builder (they express what is covered). They get into extreme detail about every little thing that’s covered. There’s usually plenty of fine print in express warranties, and it’s in your best interest to read and reread them in detail. 


Get an Inspection




Inspections might seem like something you would only worry about if you’re buying an older home. But brand new homes can have their share of problems too. Builders are looking to maximize profits, which can mean skimping on important things, like plumbing fixtures and insulation. 


You can hire a certified inspector to check out your new property throughout the building process to look out for any structural or cosmetic concerns. To find certified home inspectors in your area, head over to


Find a Mortgage Lender


Getting a lender for a new construction home is a little different than the standard mortgage lending process. If you’re having a completely custom home built, you’ll need what’s called a construction loan. A construction loan is a short-term loan that covers the costs of building, from laying down the foundation to putting up the frame to installing fixtures. After construction is complete, you’ll end up transitioning to a standard, 30-year mortgage. 


Larger construction firms will often offer to provide their own lender. The firm’s lender might offer your a competitive rate, but the best course of action here is to shop around. Visit local financial institutions and get as many quotes as you can. If you find a better rate, you can revisit the construction firm’s lender and see if they can match or beat it. 


With any long-term financial decision, it’s best to consider many options and take some time before making a final pick. Of course you can refinance later on, but having a solid rate locked in from the start will make your life easier. 




Buying a new construction home is an exciting process. Being able to control the different aspects of your future home offers a huge advantage over buying something pre-owned. To get through the process smoothly, you need to do your research on the builder, the neighborhood, and your financing options. The more effort you put in up front, the happier you’ll be with the results. 

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