Juliana Mariah -

Answering questions if you want to buy a new build home.

If you plan on buying a new build home, you want to know what you are getting yourself into beforehand.

Purchasing a new build is such an exciting time. You can look at your home and choose the plan and square footage depending on what phase the home is in and when it will be available. There is still so much that you need to know when you buy a new build home.

If you have seen other posts about our journey, you know we moved from California to Arizona. You can read more about the packing + moving process here. The reason we moved was for our little family to grow and prosper in a state with more opportunities that made it possible for us. I created this post because I know how it feels to want a home, but do not want to overpay in a high-priced market.

In this post, I am answering all questions that you will have when you buy a new build home. Not everyone has this opportunity, so I thought it would be helpful to share our journey and some questions that we had during the process.

Important Information When You Buy a New Build Home:

What is a builder representative?

A builder representative is at the front desk in the model homes that you are taking a look at. There are typically 2 to 3 of them that let you know what models are available and the timeframe they are due. They also collect your deposit. The representative may want you to sign a form for a waitlist or ask if you have a lender and a real estate agent. Do not sign any form right away form. Only sign the form when you make sure you know who you want your agent and lender to be. In the future, when you have your bank (lender) an agent that you want to use, you may not be able to use them for your new build home if you sign a form beforehand or do not put them on that form.

When is it best to buy a new build home?

The new build you look for will have different phases during the process of the build. Phase 1 is what you want to try your hardest to find. This is the time when estimated closing months are given to the builder representative, and the land is inspected before framing is put up.

Finding a New Build Home

Before you choose your home, you will meet with the builder representative. He or she will let you know what homes are available and the timeframe that the homes should be ready. Some builders give the option to choose the countertops and cabinets in your home, but most new builds have been pre-designed beforehand that way you just need to choose the plan, timeframe, and if you want any upgrades.

Once you choose a plan for your new home, you will be asked to fill out some agreements. In the agreement, are the type of plan you want, what is included in your plan, the cost of your home, etc. The builder representative will also want to have the buyer’s information written down with Social Security numbers, and a deposit is taken from your bank. You will need to call your bank and let them know that the builder will take out a certain amount of money for a wire transfer.

After this, you wait for your home to be built and receive updates from your builder representative. The sooner you lock in the plan and home, the cheaper your home is. When you lock it in early, the builder cannot change the price even when other prices of homes that do not have a buyer rise in price. This is why finding a home in or close to phase one is the best!

Can you go through your own bank (lender) or do you have to go through the builders bank?

The answer is no. The builder typically offers a sort of incentive for you to use their bank, with a gift of 6-8,000 dollars off of closing costs. But, you can use the lender that you are most comfortable. We gave our loyalty to the lender we have already used, so it is your personal preference. You will need to sign the waiver at the time of your deposit with the builder representative stating that you do not want their closing cost offer of however much money.

Real Estate Agent for New Build Home

The real estate agent you use needs to live or have a license in the state where you are looking to buy your new build.

Lender for New Build Home

Unlike your agent, your lender only needs to be qualified to help you out in the state you are looking to purchase your home. If you have used a lender before, you can ask your lender if they can get you approved in the state where you live. For example, when we moved to Arizona, our lender lived in California and was able to help us with the purchase of our home. We scanned and sent him the documents to his email that he needed to send to underwriting.

Your Home May Take Longer Than Expected

This one is huge! Depending on building supplies, you are given an estimated timeframe of closing, but prepare yourself to know that building multiple homes takes time. Your builder may lack supplies or the help of people hired to do their job. When we found our home in September, our builder stated that our home would most likely be ready by November/December.

However, each month we were given a new update, and a little progress has been made, which pushed our home to be ready by March/April. These dates still are not promised, so you want to make sure that you are not locked in on a lease. Try to find something month to month if you can, so you can leave when your home is actually ready!

Down Payment for New Build Home

Because you are waiting for your home to be built, you will hold onto your entire down payment. This is good because it either gives you time to save for your home, new furniture, and maybe a new car once you move in. The closing costs of your home are dealt with, your lender that approves your home. You will start this process approximately a month out when your builder representative has a good idea that your house will close. Your down payment will include the three, five, or however much you put down on your home, along with closing costs.

You Will Get to do Walkthroughs on Your New Home

Once the framing is up and most things are installed in your home, you will get at least two walk-throughs to take a look and see if you can find any mistakes that I made in the home. Use this time to look carefully so that you can make sure there are minor fixes or a little to none. Because so many homes are being built many mistakes are made the buyers are unaware about. For this reason, you will want to hire another contractor.

Make Sure to Hire Another Contractor on Your Own

You should hire another contractor once you are settled in your home for any last mistakes. The contractor you hire can find things that you may not have seen, and a form can be put into the builder to fix at their own cost. This is typically done around 10 to 11 months once you are in your home. So it is unfortunate it is necessary because cracks and mistakes will be found!

Equity in a New Build Home

If you find a new build in a growing area, know that your equity will rise! Especially if you locked your home down in phase one! This can be a forever home or a great starter home, but as long as the market doesn’t drop, you are guaranteed that equity will rise if moving inner-city or another location is something you hope to do!