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Buying New Construction? How to Guide

Buying a new home can be an extremely overwhelming process, especially when purchasing a new build. Buyers who want to live in a brand new house will need to do some additional research and take extra care when making decisions on where to live and which builder to use. 

Keep reading for tips on buying a new construction home.

1. Get Qualified.

All home buyers must be pre-approved by a bank or mortgage lender. During this process, the lender will determine the amount you are approved for by checking your income, debt, and credit score.

Once you are approved for a specific loan amount, it's up to you to decide how much you can commit to spending on a monthly mortgage. While it may be tempting to use the maximum amount you are approved for, it’s important to take into account other home expenses you will incur like property taxes, association fees, maintenance, and other necessities including furniture, window treatments, and landscaping. Be sure to factor these in to your monthly expenses when deciding how much you will borrow from your mortgage lender.

2. Consider the Pros and Cons.


Negotiating the price on new builds is often easier than negotiating an amount for pre-owned properties. When purchasing a home from a previous owner, you may go back and forth in negotiations more as they may have more emotional ties to the property. Builders are typically more eager to make a sale and are often willing to negotiate on the price and, in some cases, lot lines.

Building a new home will allow for some control over finishes and fixtures, as well as appliances – which are becoming increasingly energy-efficient. Not only can these modifications add personal touches to your home, but they also have the potential to add value.

The most obvious benefit of purchasing new construction is that your home will be brand new. You won’t have to worry about fixing up wear from previous owners or making aesthetic changes when you move in.


Many new builds are in ‘up and coming’ areas, meaning they may not be in a prime location (yet). Be sure to consider your commute to work and daily activities before deciding to move forward with a construction contract.

There may be less privacy. Many new build subdivisions are planted with young trees that will take a while to grow. In addition, the homes tend to be close to one another as they are often built on smaller lots.

New neighborhoods may require homeowners association fees (HOAs) and have association rules. If you know you will need additional exterior buildings (such as a storage shed) or have your heart set on a specific exterior paint color, make sure your desires are in accordance with the association policies before moving forward with your build.

3. Find the Right One.

To find the perfect neighborhood, do research online, and drive through the areas you are considering. Make note of the quality and style of the homes in each community, and if you find a neighborhood that appeals to you, go for a walk and strike up conversations with the residents. Take your time touring model homes, and make detailed notes of what you like and don’t like about each before you make your final decision. 

As you search for the perfect home, be sure to work with a buyer's agent who will help you set up tours and introduce you to new neighborhoods you may not have previously considered. Even if you already know where you want to purchase a home, it is still wise to hire a buyer’s agent who will work for you, rather than going through the listing agent who works for the builder.

As many new builds are in developing areas, talk to your agent about plans for the community. Are there any shopping centers being built nearby? Will there be any changes in the school system as more homes are built? What are the zoning laws for the neighborhood?

Along with researching each neighborhood, it’s essential to research each builder. Read reviews online and ask your buyers agent about their experience. By being diligent during this phase of your new construction purchase, you may be preventing major issues down the road.

4. Close the Deal.

Just because a home is brand new doesn’t guarantee it will be up to code and free from construction issues. When you sign a building contract, make sure your agreement is contingent on the final inspection, which will take place before you close on the home. 

In addition to the inspection, ask the builder about their home warranties. Even new builds are susceptible to major defects that require extensive repairs, and the most reputable builders will offer a warranty on any structural repairs for a stated period of time after closing. Make sure you are clear on the warranty offered by your builder and understand what is covered and for how long. This will ensure your home is properly maintained and that the builder stands behind their work.

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