As a homebuyer, there are five things you need to know about new construction homes.
1. Some new construction homes may not be listed on the MLS. Oftentimes, builders don’t list new construction homes until they’re close to completion. This is because if they list it as soon as the slab is put down and nobody buys it for a long time, that might hurt the home’s days on market. A home may become more difficult to sell if it’s listed for too long. Always ask a local agent to help you find shadow inventory that’s available but may not be listed.
2. New homes are often sold before they’re built. A builder will generally get financing lined up and the new construction and sale process mapped out.
3. The first buyers may get the best discounts. Early in the sale process, the first buyers may be able to negotiate the price down. With this reward, however, there is also a potential risk. As an early buyer, you’re fully committed to the project.
4. Builders don’t have personal relationships with the homes. For them, building a home is a business—it’s more spreadsheet than sentiment. They’re focused on making sure you’re qualified to buy the home and they set their prices based on the local inventory, although there may be room for negotiation.
5. Discounts may be available in the form of upgrades. Very rarely will a builder discount the price of a new construction home, and there are several reasons why. First, they don’t want to hurt comparable sales in the rest of the neighborhood because that could hurt appraisals. Second, if they give a price discount to one buyer, they may have to give the same discount again and again to other buyers. If you’re buying the last house in the neighborhood, however, you may have a little room for negotiation.
If you have any other questions about new construction homes or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d love to help you.