Are you thinking about buying a new construction home? Before you do, here are a few things to be cautious of.
In the second part of our series on new construction homes, we’re going to be looking at the cons of building a brand-new property. Here are a few of the most common disadvantages of buying new:
1. You’re paying a premium for the home. You’ll get to choose all the finishes, the design, and the layout you want, but you’ll pay a premium price for it. This means it will take a bit longer to get the value back from what you put in.
2. It can be a long, difficult process. If you go under contract at the end of the year and the home isn’t finished for a full 12 months, that’s a lot of time to invest in a transaction. You’ll have to keep an eye on your credit, interest rates, etc., for a full year. A resale home, on the other hand, usually changes hands in 30 to 60 days and there’s much more room for error.
“A home build could take over a year to complete.”
3. You don’t know when the actual closing date is. The builder might tell you it will be between eight and 12 months, which could put a huge damper on your current situation. If you have a lease that ends on a certain date and you’re trying to match it up with your home being built, you might have to extend your lease or find a temporary listing if the home isn’t completed in time.
4. You’ll pay a lot more if you’re late to the party. In phase 1 in a subdivision, buyers get the most closing cost assistance and the cheapest purchase price. You're taking a risk if you're among the first group of people to move in. However, when the community matures and there are homes built in phase 4, those homes end up costing a lot more money.
Now that you know the pros and cons of buying new construction, you'll have to weigh them to see what makes the most sense for your purchase. If you have any questions for me in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.