How to Buy a New Construction Home

Posted by Edmonton on Thursday, August 2nd, 2018 at 8:54am.

How to Purchase a New Construction HomeNew construction homes are the ultimate blank slates for homeowners and their families, but they're also a brave new world for buyers who are used to traditional home sales. Not only are the expectations different when it comes to new construction homes for sale but the negotiation strategy will need to be adjusted as well. Learn more about the timelines, contracts, and research a home buyer has to do to avoid making mistakes.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.

Schedules and Delays

Even in an age of communication, it's not always easy to coordinate schedules or meet deadlines. A newly constructed home has multiple players involved that could delay the process at any time. From local authorities to inclement weather, buyers have to be flexible when it comes to their move-in dates.

However, home buyers also need to be proactive when it comes to which excuses they accept. Cold weather or snow may delay the pouring of asphalt, but it shouldn't push back the completion by days or weeks. Ordinance regulations may push back the completion date, but they shouldn't be a reason to put the project on hold.

Expectations and Negotiations

The negotiation of a new home sale is remarkably removed from that of a traditional sale. A home seller who sells their home once every three decades is very different from a developer who sells properties four or five times a year. Developers are far less likely to come down on their price because they're afraid they'll set the wrong precedent.

Instead of negotiating with a developer on the price of the home, a buyer should concentrate on other ways to proverbially sweeten the pot. For example, asking for the closing costs to be covered or requesting additional upgrades to the home (e.g., upscale appliances, sunken bathtub, etc.)

Knowing When to Ask

If a buyer isn't contracting the home prior to purchasing, they should understand the developer's priorities before bidding on the home. A normal home seller sees the home as a collection of memories—whether good or bad. However, a developer sees the property as an investment. If the property sits on the market for more than a month, the developer is likely to worry that investment is slipping away by the minute. Bidding at the 30 or 31-day mark is a good way to cement better terms for the sale.

Signing the Contract

Buyers need to put all of their terms in writing for new home sales. While this may be true for all home sales, new construction has more stipulations that can get in the way of deadlines. For example, if the construction deadlines aren't met the buyer needs to stipulate whether or not the developer will pay for additional lodging charges.

If the home inspection reveals that corners were cut during the construction process, buyers will have the leverage to either renegotiate the sale or abandon it completely. Buyers should also check the state of the neighborhood before deciding on a property. If there are any major renovations, such as a mega-warehouse being built in the next five years, this will make it easier to determine property values in the future.

Newly constructed homes will need a few extra considerations from Spruce Grove home buyers, but the extra work is an excellent investment. Moving into a brand new home is the best way for a homeowner to forge their own memories and history apart from anyone else's.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.

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