Building a new home is very different from a resale purchase, and we help guide our clients through this process. One of the most important things to note is that with new homes the base price can go up quite a bit depending on what features are added to the home. Each builder goes about pricing a different way, with some such as Lennar including many standard features. Lennar's slogan is actually 'everything's included' to try to differentiate themselves from many of the other mainstream builders.
Since pricing can vary so much, we usually ask the builder about the standard amount of upgrades for a particular community. If the base price of a new home is $300,000 and the average amount of upgrades is $30,000 then the buyer can reasonably expect to pay around $330,000. It's also possible to get some idea though by having the builder price certain items out. Many builders have a design center where the buyer can go to choose their selections, and the people working there can price upgrades as well. Examples of selections include flooring, countertops, cabinets, and fixtures (plumbing and lighting).
Another important note is that every builder's contract is different, although a few use the standard North Carolina forms. Before signing we go over the contract with our clients, and in particular we like to see what time frames the builder allows for the loan approval and closing. Typically buyers have a week or so to get a pre-qualification letter from a lender, and a month or so to get the loan approved. Also, most builder deposits will be nonrefundable unless the buyers run into loan issues etc. This is unlike the resale contract, where the large deposit is usually refundable if the buyers back out.
In preparation for a resale or a new home it's a good idea to get a pre-qualification letter for the loan. By talking to a loan officer buyers can get an idea of what their monthly payment will look like, as well as different loan options. If you talk to one loan officer you don't necessarily have to go with that lender, especially if the builder is offering a great deal with their in-house lender. In-house lenders for builders will sometimes offer to pay a portion of the buyer's closing costs associated with the home purchase.
One final thing we recommend to clients is to get a home inspection even though the home is new. There are so many different subcontractors that worked on the home that it is good to have an independent analysis just to make sure everything checks out. The home inspection is typically scheduled a few days prior to the home orientation.
Example Building Process after the Contract is Signed:
1. First we meet with the buyers and builder initially to double check floorplans and selections.
2. Next is a pre-dry wall walkthrough once the framing is up to check placement of outlets and light fixtures (especially if you changed a few of them from the initial floorplan).
3. Following the pre-dry wall walk is the 'home orientation.' This is closer to the end of the process to go over your home and proper maintenance for the home's systems. This is typically when the buyers will mark cosmetic touch ups with blue tape.
4. Last is a final walkthrough very close to closing to make sure everything is perfect! This is usually done the day of or the day before closing.