Buying New Construction: Pros and Cons

Dave Nimick Chicago Real Estate Podcast

If you plan on buying new construction, there are a few key things you need to know.

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Before buying a new construction property, there are a few important things you need to know.

One of the benefits to think about is that you’ll have the opportunity to live where no one else has before.

You’ll also often have the opportunity to customize the property, depending on how far along construction is. This includes choosing details such as finishes and maybe even the floor plan.

However, there are some drawbacks. New construction homes are more expensive, for instance. Another disadvantage of buying new construction is that you aren’t working with a traditional seller. These transactions are what developers do for a living, so no emotional decisions will be involved. The decisions a developer makes will be strictly financial.

Now that we’ve discussed a couple of pros and cons, let’s cover the three things you must do if you move forward with a new construction purchase.

1. Work with your own Realtor. If you walk into a model home or condo unit by yourself, you are going to meet with the developer’s agent. This agent is looking out for the developer’s best interests, not yours. Think of it this way: If you were to appear in court, would you want to represent yourself or would you want the help of a professional? Of course, you would work with a professional. This goes for real estate as well. You deserve an advocate in the real estate process.
2. Do your research. Find out which local builders are reputable and which are not. A lot of research can be done online on your own, but it’s also certainly a good idea to get the advice of your Realtor.
3. Read the fine print. Standard contracts for resale purchases throughout most of the US are written without advantage to either party, but this isn’t the case when it comes to purchase contracts for new construction. These purchase contracts are most often written by the developer’s attorney. A knowledgeable Realtor will know what to look for when reviewing this contract so that the deal is as fair as possible.

There are a few more things to keep in mind when buying new construction. If you’re purchasing a new construction property that is one of several in a single area, the seller will often be inflexible on the list price.

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With the help of your agent and an architect, you can build a home exactly to your desires.

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If they lowered the price for you, they would be asked to do so by everyone else. In other words, a reduced price will not likely be an option. However, they may offer upgrades such as hardwood floors, appliances, or landscaping touches for little to no extra cost.

Depending on your area, there may be developers who build homes that are truly from scratch. This gives you the opportunity to fully customize the property. With the help of your agent and an architect, you can build a home exactly to your desires. Keep in mind, though, that this is the most expensive option for new construction.

Regardless of the route you choose when buying new construction, you should prepare for the number of choices you will be asked to make throughout the process. The excitement of these choices may wane when you realize how truly involved you will be with the construction of the home.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.