Navigating New Construction
Building a new home has become an extremely popular option for finding your first or next home. This is due to the record-low existing home inventory that causes multiple offer situations where offering up your first born might not be enough to win the bidding war. Building new isn’t necessarily easier than buying existing, though. So here’s a list of considerations that I recommend if you’re considering building your next home:
1. Don’t go alone: I don’t recommend going into the process without representation on your side. There are so many options to consider when building new, that the process really isn’t much more simple than buying an existing home. Going into the process alone can quickly turn into information overload because of the amount of options and decisions that have to be made. As a Realtor, my job is to help make the process easier to navigate and help you compare the options available to you. And when it comes to commission, the builder pays me for bringing them a buyer, so there is no fee to you for my services.
2. The base price is just that: The price you see on the sign or online is just the starting point. From there, you have to add on lot premiums, neighborhood requirements, city zoning rules, and any other style & design customizations that you make – and those costs add up quicker than you think. As a Realtor, I can help you during design by making suggestions that make the most sense for your investment.
3. You might have to look outside your #1 area: There’s an old saying that goes, “they aren’t making any more land.” The suburban new construction market is booming in the Indianapolis area. Depending on the style of home you are looking for and your price point, you may have to look outside the Indy city limits to find your next home.
4. Inventory for new home sales is low, too: The existing home inventory in the Indianapolis market has been at or near record lows for the past year and some change. The situation is no different for new construction. That means neighborhoods are selling out at a record pace and when you find the floorplan and the neighborhood you want to build in, you might have to go on a waitlist until a new batch of lots open up. So what used to be a 4-6 month timeline to build a home, is now a 6-9+ months timeline before you get your keys.
**If that timeline is longer than what you have in mind, there is an option for that. Many of the local builders will build Spec homes. These are essentially inventory models that are built for a quick move-in. They’re available sooner, but you don’t get the option of customizing at the design stage.
If the list of considerations above have placed you on the fence between building new & buying existing, here’s a quick comparison:
· Typically 30-45 days to closing
· Option to purchase a home warranty
· No customization at move in (unless you do it yourself)
· Usually will need more maintenance unless completely rehabbed
· Typically more home for the price
· Someone(s) has used the toilets
· 6-9 month process
· Warranties usually included
· Customize your preferences & designs
· Brand new systems, appliances, and roof means less maintenance in the short run
· Typically less home for the price
· No one has used the toilets
On the flip side, the similarities between buying existing and building brand new are:
· Same qualifications for financing
· Maintenance will still be required, it’s just a difference of how soon and how often
· There are options to not be located in a Homeowner’s Association (HOA)
Bottom line – there are a LOT of moving parts to home buying, whether you build brand new, buy an inventory spec, or choose an existing home. As a Realtor, my goal is to represent and work towards your goals, no matter the path you take. If you want more information regarding building a new home, please make sure to reach out to me first for a consultation prior to visiting or registering with a builder.