New Home 101: Buying Your New Home, Part 1

Information about chapter four regarding buying a new home. There is a close-up image of a form in the background.

When it comes time to buy your new home, things can get a little tricky. We're here to guide you through the process!

This article is the first part of a three-part series discussing the buying process of your new home. For part two, click here. For part three, click here.

At this stage, you should have settled the question of custom or production. You’ve done plenty of research and identified several builders in your preferred area whose homes you like and that fit your budget. You’ve toured the communities and model homes of those builders, and you’ve taken steps to get your finances in order. Now, it’s time to make some big decisions. 

The steps you take to buy and build your new home vary from one builder to the next, but, according to Dennis Webb, vice president of operations for Fulton Homes in Tempe, Arizona, the process generally goes like this:

• Pick a community. 
• Pick a builder (if there’s more than one in the community). 
• Pick a floor plan that best meets your needs. 
• Pick a home site. 
• Sign a purchase agreement or contract. 
• Finalize all structural options within ten days. 
• Finalize all other choices within thirty days. 

Don’t forget that you are making multiple purchase decisions: Which new home community is the best fit for you, based on the amenities you plan to use? Which builder offers the best home for your needs? And which floor plan and lot are right for you. Sound hard? It doesn’t have to be, especially when you work through these decisions in a logical order. 

“We sell the community first and then the house,” says Paul Erhardt, senior vice president of homebuilding and development for WCI Communities in Bonita Springs, Florida. “Think about the area you want to live in and the lifestyle you want. Are you retired or working? Do you want to be around young families? What kind of amenities are you looking for—a golf course, fitness center, craft rooms, a swimming pool, tennis courts? All of those amenities come with some ongoing costs in terms of association dues, so you need to sort out which community is right for the way you live and whether the cost makes sense.” 

After you’ve identified the community you like, then you can look at the floor plan and the house.

Location Options for New Homes 

If you already own land, you’ve settled the question of where to locate your new home. For most buyers, the main choice is between a master-planned community, an urban condominium development, or an infill development where one or a handful of new homes can be built in the midst of an established neighborhood.

Within a master-planned community, you’ll find a wide range of neighborhood styles, such as a development with multiple sizes and styles of homes or one with similarly sized homes and lots. If you’re buying your first home, you may want to consider the benefit of moving into a development with a range of homes at different price points, so that if you eventually decide to move up into a larger or more costly home, you won’t have to leave the neighborhood. You can start with a townhome or villa and perhaps move into a single-family home in the future. Larger master planned communities often offer several distinct neighborhoods, across many price ranges. This type of community can work well as your needs change. Perhaps you’re a move-up buyer who wants a larger home now while raising your family, but you may want to downsize as an empty nester. A community that offers a broad range of housing types and options can allow you to change houses but not neighborhoods, keeping you close to friends and family.

Shopping Tips for Choosing a Community and a Builder 

Most buyers readily admit that their favorite part of their new home search was visiting inspiring model homes and communities. There’s no better way to start to narrow down your list to specific new homes, communities and builders. 

As you shop, rely on the expertise of the builder’s on-site sales consultants, a Realtor if you’ve chosen to work with one, and on information you gather in conversation with builders. In addition, experienced new homebuyers suggest talking to local residents. 

“If you’re a new buyer, the best thing you can do is talk to people who’ve been through the process of buying a new home,” says Jeff Yeakel, a buyer in Brookhaven at Johns Creek, an active adult community in Johns Creek, Georgia. “You should give yourself at least ninety days to six months to look around at new developments to get ideas of what’s available and to ask questions of the sales people and the residents.”

A Realtor with experience with local builders can share information about which builders have a reputation for quality work and good customer service, but you can also do research on your own.

“Before you decide on a particular builder, check the company out on Facebook and look online for reviews,” says Dawn Easter, a buyer in Ironwood Crossings, a Fulton Homes community in Phoenix, Arizona. “Look at communities they’ve built to see how people keep their homes up. Drive around and talk to neighbors where you might want to live, or if you’re looking at a community where no has moved in, look at another community built by that builder and ask for feedback.”

One of your best resources when buying a newly built home is the sales consultant. A sales consultant can also explain the cost and availability of new homes in each community, which floor plans can fit on each lot and the types of options available with each floor plan. Your sales consultant can also help you determine if you might benefit from buying a home that’s already partially or wholly complete.

If you’ve decided to work with a production builder rather than hire an architect, you still have several choices for purchasing a newly built home. Builders offer new homes to meet most every desired timetable. Depending upon your desired move-in date — and how quickly you want to occupy a new home — many builders offer homes that you can build from scratch, partially completed homes and even fully completed spec homes. Here’s what to know about each. 

Buildable Plans 

Buildable plans are floor plans offered by the builder on a lot of your choosing. Keep in mind that not every floor plan can be built on every lot and that not every option you like will be available for every floor plan. Some builders offer a dozen or more homes per community while others offer only one or two.

The level of floor plan customization varies among production builders. You can find builders like KB Home that allow you to “build to order,” while others offer personalization through finishes and fixtures but no structural changes. Building from a floor plan on an empty lot can take four to six months or longer. Most builders will start construction thirty to forty-five days after you sign a contract depending on how long it takes to obtain the necessary permits and inspections of the site. 

Spec Homes 

Some builders opt to complete one to two or more homes, typically building the most popular floor plan with the options chosen most often by their buyers. “We build about one-third of our homes as spec homes in order to compete with the resale market,” Fulton Homes’ Dennis Webb says. “Buyers, especially if they’re relocating, can benefit from owning a newly built, energy-efficient home without the wait associated with construction.” 

Quick Move-ins 

Some builders choose to partially build a home and then offer it to buyers who can then personalize it. Webb says many of Fulton Homes’ spec homes are 30 to 60 days away from completion, which gives buyers the opportunity to pick a few optional features and finishes. Sometimes a quick move-in home is available because a sale falls through and the builder has to put the home back on the market. 

Model Homes 

Most builders upgrade their model homes to showcase optional features. These homes have been professionally designed and decorated and often include extra landscaping. Builders typically wait to sell the model home until a community is sold out or nearly complete, but sometimes they’ll sell it to a buyer who’s willing to lease it back to the builder and wait to move until the builder is finished showing the model. The Thompsons did just that at Brookhaven at Johns Creek. 

“We loved the model home so much that we asked if we could buy it and lease it back to the builder,” Ernie Thompson says. “At the same time, we realized that the model is 4,000 square feet and someday we may want to downsize. We bought two more condos within the community because we didn’t want to lose out on them because homes were selling so fast. We lived in one until the model was ready for us. We’re using both condos for rental income now.” 

For more expert advice on buying and building a home, check out the free eBook download of New Home 101: Your Guide to Buying and Building a New Home at
Michele Lerner is an award-winning freelance writer, editor and author who has been writing about real estate, personal finance and business topics for more than two decades. You can find her on Google+.

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