Departments — 01 April 2022
What New-Home Buyers Need to Know

By Robyn A. Friedman

City & Shore HOME Issue

Imagine your dream home – a house built according to your own needs and wants, where the finished product is unique and reflects the way you and your family live.

Building a new home has a lot of advantages in addition to the ability to personalize kitchen cabinets, countertops, colors and more. You’ll end up with a home built to the latest building codes with a modern floor plan that most likely has energy-efficiency and sustainability built in. Your home will come with a limited warranty as well. It will be new, fresh and move-in ready without the need to spend time and money updating or renovating. And, for many who move into new homes today, there will be amenities right in your community, whether that’s a pool, dog park, playground for the kids, tennis or a clubhouse with a fitness center.

If you’re considering the purchase of a new home rather than an existing one, the process starts with a visit to the community and a tour of available model homes. Prospective buyers can also shop virtually in many cases by reviewing plans of available models online.

After selecting a specific home design, the next step is to choose your home site. It’s important to remember that many lots are sold at premium prices, particularly if they offer privacy or back to a desirable feature such as a lake or golf course. Lot premiums can be a significant addition to the base price of the house, so be sure to plan your budget accordingly.

After you sign a purchase contract and put down a deposit, it’s time to complete a mortgage application, unless you plan to pay cash. The contract will require you to apply for financing within a certain time frame. A visit to the builder’s design center usually follows, and you’ll have an opportunity to sit down with the builder’s design professionals, or to bring your own, and to select structural and design options for the home. Bear in mind that additional deposits are due on options and extras ordered at this point. And you’ll need to resist the temptation to exceed your budget to upgrade the house.

“A common mistake people make is not realizing how much they are going to spend on options and upgrades,” says Brad Hunter, a housing industry consultant in West Palm Beach.

That’s because the model home you fell in love with may have tens of thousands of dollars’ worth of options – or more – built in. Plus, options or other items purchased through the builder, such as appliances or flooring upgrades, may cost more than if you purchased them directly.

“If you’re buying a new home, you are paying certain premiums above what you would pay if you bought an existing home and upgraded it,” Hunter says. “So, understand you’re paying the builder upgrade for the contents of that home.”

The final stages of new-home construction are the walkthrough just before closing and then the closing of title. How long will it take before you’re in your new home?

“The time frame to build a new home can vary, based on the home design, community, region and city requirements,” says Fred Pfister, division president of Toll Brothers for Southeast Florida, a luxury homebuilder with several projects in South Florida. Many builders offer so-called quick move-in homes, which are homes the builder started on spec, without a buyer. These homes offer quicker occupancy but buyers may be limited in the selections they can make to customize them since construction began before they were sold.

Like the purchase of any home, it’s essential to first determine how much of a home you can afford, including any lot premium and options. Creating a budget ahead of time will help prevent you from overspending.

Also, do your due diligence, and don’t hesitate to ask questions – and lots of them. “We encourage home buyers to ask any and all questions they have about the homebuilding process, personalization options or any other aspects of their new-home purchase,” Pfister says. “This will help them feel confident that their expectations are being met and are in alignment with the home the builder delivers.”

PHOTO: Toll Brothers model home. (Roberto Gonzalez)

 

 

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