What You Should Know About Buying New Home Construction from a Builder

In 2017, over 5.5 million existing homes were sold in the US.

By contrast, less than 1 million newly built housing units sold in the same year. Buying a new home construction can be tricky, but it’s certainly not impossible – especially with a few extra tips.

If you’re in the market for a new home, you should be prepared for the cost and the in’s and out’s of the purchasing process. Display homes will give you an idea of what you can achieve, and you can even purchase these homes. Knowing these insider tips before you start looking can mean the difference between the home of your dreams and a handful of problems.

Read this before you start the new home construction buying process.

The Cost of New Construction

In 2018, builders were expected to increase the number of homes they built. Projections estimated that 653,000 newly built homes would be sold last year. While that’s up almost 5.5% from the previous year, the growth rate is actually down from 10.5%.

And even that number of homes isn’t enough to meet the demands of the market. This is part of the reason why new construction is so expensive. Not enough homes, coupled with lots of demand, means skyrocketing prices.

But why aren’t enough homes on the market?

There are a few reasons. Land shortages have put a strain on builders as well as rising materials costs. As a result of the most recent financial crisis,  it’s also more difficult than ever for builders to find financing.

All that is to say that it’s far more expensive to purchase a new construction home than an existing one. And this situation isn’t expected to change any time soon.

Questions to Ask When Buying a New Home Construction

Depending on your builder, your contract will include, exclude, and hide different items. Ask these questions, especially about California leak detection company standards  to get a more clear idea of what you’re buying.


Although you’re unlikely to get a finite answer, you’ll want to ask approximately how long the building takes. This gives you a general idea of timelines, so you can plan around selling your current home or finding a place to rent in the meantime. Keep in mind that it’s typical for new home constructions to have significant delays.


New homes don’t come with the same problems as existing homes – but they do have their own set of issues. Ask your builder if the home comes with warranties and, if so, which?

Most new homes will come with at least 1 or more warranties. These include a short term whole-house warranty and a longer-term structural warranty. In the event something happens in the first couple of years of living in the home, you need to know if the builder will cover the expense. Quality of materials can affect a builders willingness to warranty the home. For example, if the contractor is using high quality fasteners, they are more likely to warranty the work because there is less chance of failure. Learn more about Military and Commercial fasteners here.

The Lot

A new construction home typically comes with a base cost. The base cost is how much the structure, base interior, and exterior features cost. You need to ask if that cost also includes the cost of the land your home sits on.


Make sure you know what’s included as a finish and what’s an upgrade. For a more visual idea of what you’re getting, have a salesperson walk through a model and point out the standard products and what’s been upgraded.

You should also ask if you can bring in your own materials or appliances. Some builders will install items like flooring that you’ve bought separately. Others will only allow you to install appliances that have been purchased outside of the builder’s contract.


Some builders include basic landscaping in their cost. They may put down sod, trees, and install a high security fence for you. But most builders leave the responsibility for landscaping up to you – and landscaping can cost thousands of dollar for even an average-sized yard.

When you’ve been left without any landscaping, one of the first things you’ll want to do after getting sod is to install a fence. Learn more using this post about your options here.

Hiring an Agent

Before you start looking for a new construction home, find yourself a real estate agent. Then have them introduce you to builders – this simple step can save you a lot of time and headache.

When you walk into sales office without your own agent, you may not be allowed to find your own representation after signing up with the builder or giving your name. In the case that you get representation after doing this, the builder might refuse to pay them.

But why don’t you want a builder’s sales agent? Because they represent the interests of the builder – not you. They’re more prone to using pressure tactics and won’t discuss any drawbacks with you. Remember that they’re often paid less than a traditional commision, so getting you to purchase is in their best financial interest.

By contrast, a buyer’s agent will have your best interest at heart. They discuss the advantages and disadvantages of your purchase and the contract you’re entering into. And when it comes time to sell your home, make sure you look for a listing agent who will represent your interests with equal care.

Looking for Lenders

Don’t go with the first lender you find. Shop around, obtain quotes, and find someone you want to work with. Before you make a decision, interview them to be sure that you’re compatible.

You may look at your own bank or credit union first. Because you’re already a client, they might be able to offer good rates and terms.

Whatever you do, don’t use the builder’s lender without looking into others first. A builder’s lender is representing the interests of the builder. They may not offer you the best deal you can find and they’ll be keeping the builder informed of your financial situation.

More Tips and Advice

Buying a new home construction might cost a little more than an existing home, but there’s something special about being the first person to live in a new space. If that sounds like the home buying experience you’re looking for, just be sure to follow a few simple steps. Ask the right questions, get yourself a good agent, and shop around for lenders.

And for more lifestyle tips and advice, be sure to check out our blog.

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