9 Things You Must Know When Buying a Brand New Home

Buyers, caught up in the excitement of a brand new, never-lived-in home can overlook some key details that affect their bottom lines. Curious what they are?
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Newly built or pre-construction homes are the house of choice for many homebuyers. Trulia recently asked people Americans whether they would prefer to buy a newly built home or a previously-lived-in home, and a whopping 41 percent said they wanted brand-spanking new.


Most people cite modern features and the ability to customize the home during the construction process as the top reasons for lusting after a new build. There's also the use of energy-efficient materials and systems to up the appeal. However, buyers, caught up in the excitement of a brand new, never-lived-in home can overlook some key details that affect their bottom lines.

Curious what they are? Here are the 9 things to know when buying a brand new home:

1. Buying Into Half-Finished Developments

There are lots of developments out there that are currently half-built. Keep a healthy dose of skepticism about these scenarios, even though you may be getting a great deal. In an uncertain world, it's possible that you may be buying into a development or community that may never be fully completed -- or may take a long time to finish. The very rare, worst-case scenario: you'll be stuck with an unsellable house in the middle of an unfinished community. In the bottom of the market, i've driven into many developments in which only 10 of the 40 lots have houses already built. The other 30 lots are giant plots of dirt that kick up sand and dust the moment the wind picks up. Though it may seem like a really good deal to you now, it will become very difficult to resell if you need to move before the entire community is completed. You need to ask specific questions about the number of lots sold and currently under contract. You may want to reconsider being the first or second out of 50 and buy in a later phase when there's more certainty.

2. Being Hypnotized By the Picture-Perfect Model Home

Want to know one of the secrets of the new home trade? When buying new construction, you almost never ever get to see your actual home or unit. You see a model or prototype that is similar in floor plan to the home or apartment you are purchasing. Those model homes are always decorated and dressed to look magnificent. The developers and designers employ all kinds of techniques to make the model home appear bigger than it actually is. Often times they have furnished and staged them with slightly smaller-scale furnishings to make the rooms look bigger. For example, bedrooms generally have double-sized mattresses rather than traditional queens or kings.

3. Going With The "Flow" of a Model Home

Builders often employ a technique in their model homes to give the place more "flow" when they remove most of the interior doors between rooms to give the model home a much greater feeling of space and an open floor plan. I'll bet you have never even noticed. Don't let that little door trick slam you in the face! Be sure to consider the space when the doors are on the hinges and shut tight!

4. Not Knowing What's Included vs. Extras and Upgrades

What's extra? Find out exactly what upgrades are ― and are not ― included in the price you are being quoted. For example, you may think you're getting an incredible deal, but what you didn't think to ask was if the finished basement and the gourmet kitchen package are included. And, oh yeah, the walk-in shower isn't included in your basic package. Once you start adding in those "wow" elements, the price can skyrocket from affordable to out-of-your-budget.

5. Going on an Upgrade Shopping Spree

Be conservative about which and how many upgrades you select. Determine which you can live without or do on your own later. Just as with any retail business, builders make profits on the upgrades. Don't get caught up in the frenzy and throw your budget out the new double-paned designer window (with custom shades, naturally).

6. Not Getting a Completion Clause

When's it going to be finished? When purchasing new construction, you are at the mercy of the builder's timelines. What is the date of completion of the house? Does it coincide with your needs? Make sure you get a cancellation clause or a refund of deposit clause if the builder does not complete by a specified promise date.

7. Ignoring Previous Phases

Looking at the new homes in phase two of a development? Go back to phase one. You may be overlooking a better deal. And you may be ignoring a lot information about the builder/developer that could be very useful. If you are buying in a community that is in phase two or higher, then hit up some neighbors from phase one. How easy was this developer to deal with? Any suggestions? Advice? In addition, notice if the phase one neighborhood is already established, with grown-in landscaping and completed, lovely homes. You might just prefer that to a future phase surrounded by bulldozers, infant trees, and blowing dust.

8. Not Carefully Reviewing the Surrounding Homes and Neighborhood

When buying new or pre-construction homes, you have the ability to pick the lot and the location of your home. However, can you see the neighborhood completed in your mind's eye? Will the house that is yet to be built next door block your view? How close will your neighbors be? Will your living room end up looking into your neighbor's master bath? Keep all that in mind. Also, consider the surrounding neighborhood. Are these shiny new homes surrounded by a rough neighborhood? You may be living in a new gated community, but that's still your neck of the woods. Make sure you love it all.

9. Waiving Your Inspection

Just because you're
that is in the process of being built from the ground up, it's a huge mistake to try to save a few hundred dollars and bypass the inspection process. In fact, it's a good idea to get an expert eye on a new home as it is being built. And if you can, have someone check out the house-in-progress. Get someone who can identify potential problems. You can oftentimes hire an inspector or an outside contractor to stop by the property and then pay him or her an hourly rate. It is money well invested.

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