Buying a New Home

What is the cost of new home construction?

Maybe that open-plan first floor has proved elusive among the existing homes on the market or perhaps you don't want to try and retro-fit a modern plumbing system into an older home.

If so, you should consider contacting a builder and constructing your own home. There are a couple ways to do this: you can buy land and work with architects to design your own home. You can also find a new homes community that is under construction and customize a home for your family. Whatever you decide, there are some steps you should take to accurately determine the cost of your new dream home.

• Talk to local builders and real estate agents who specialize in new homes. Tell them what you're looking for, and ask what they usually charge for the size and type of home you want, and for the amenities that are important to you.
• Figure out what you need and what you want, says the National Association of Home Builders. Make decisions based on how much it will cost, not on emotions.
• Tour as many homes or model homes as possible. Talk to different builders and agents, and it's likely you'll be able to determine a fair price for your new home.
• Ask about the qualities of your new home that may affect long-term maintenance costs. Many new homes will be outfitted with systems or materials that will cut the cost of utilities in the long term.
  

How do you find a builder?

Entering into relationships with new home builders is like entering into any other business relationship. If you're building your new home from scratch, you and your builder will be in this relationship for months, and you'll spend a lot of time working together.

Builders, like anyone else involved in buying, selling or developing homes, have a strong presence on the Internet these days. Log onto sites like www.homesandland.com to find listings of builders in your area and links to their own Web sites. There, you can see the sort of homes in which the builder specializes.

You can also ask around. Friends and family may know the name of a reputable builder who helped them build their dream home.

The National Association of Homebuilders, or your local home builders association, is also ready to refer you to a builder who will construct your new home.

How do you find a new home?

After you decide you want to buy a new home instead of an existing home, the first place to start looking is the Internet. Many Web sites that list new homes for sale, like www.homesandland.com, do so in a special section and let you narrow down your search by price and other criteria. Most new home builders head straight to the Internet when they're trying to sell a new home, so it's the best place to start.
You can also look at print publications, like magazines that specialize in home listings or in newspaper classified sections.

Another way to find your new home is through a real estate agent who specializes in new homes and land. You can hire a buyer agent, who will represent you, or contact agents who may be representing the builder or investor selling the new home. Many larger real estate firms employ agents with such specialities. You can also find these agents on the Internet. Some Web sites have listings that link to the agent's own Web site. If you have your heart set on living in a certain new home community, ask the builder who is selling the homes, and give him or her a call.

How do you get a new construction loan?

Once you've found your new home builder, it's time to decide how to finance the construction. If you want to build your new home from scratch, getting a loan isn't quite as simple as getting a mortgage. It is important that you understand how to finance your new home.

• Many home buyers who choose to build their homes obtain a new construction loan, then convert it to a conventional mortgage after the home is built. According to www.bankrate.com, new construction loans are not standardized, like mortgages underwritten by Fannie Mae or Freddie Mac.
• Shop around at banks for the best rate. You can often compare loans, or at least find sources of loans, on the Internet.
• According to www.askthebuilder.com, a Web site that answers questions about construction, you can minimize your financial risk by selling your existing home before buying the new home, allowing you to have all the equity at hand. You may have to live in an apartment for awhile, but you can use the equity to finance the first stages of construction and you won't have to use the bank's construction loan for as long.
  

What should you ask before buying a new home?

It's easy to think of questions to ask when you're buying an existing home. When was the last time the roof was replaced? What about the boiler, and when was the heating system last updated?
One of the advantages of buying a new home is that everything is brand new, but there are still questions to ask before buying a new home.

• If the home isn't yet complete, when will it be done? And what if construction moves behind schedule? Even if your builder is reputable and experienced, if s/he is working on a tight schedule, a big rainstorm or any number of unexpected events could delay completion.
• What will be built around your new home? Many new home communities are located in relatively undeveloped neighborhoods, but they could be developed soon. Make sure you find out how the lots near your new home are zoned or if there are plans in the works. Figure out how traffic patterns near your home may change and if there will be light or noise that you don't want to live with. A municipal or county planning office should be able to help you find out what might be developed.
• What can you customize in your new home? You'll probably save money in the long run if you have the builder install the super-efficient heating system you want, or if they add in the third garage space for your teenager's car.
  

What are the advantages of buying a new home?

If you're the type of person who automatically turns to the new home listings when searching for your first or next house, there are probably plenty of reasons why you do.

There are many advantages of buying a new home. Maybe you don't want to deal with antiquated plumbing systems or maybe you want amenities that aren't usually found in older homes. Aside from wanting to avoid initial maintenance and repairs, a new home can be a solid investment. According to the National Association of Homebuilders, buying a new home has greater financial impact when compared to investing in stocks and bonds because of the leveraging power of owning a home.

Since the housing market has been slumping in much of the country, you also have more room to negotiate with the builder or investor who is selling the home. Consider hiring a real estate agent with experience representing buyers of new homes. He or she should know the going rate for the type of home you're seeking and can help you get a good deal. The NAHB also touts the level of safety and efficiency of many new homes. They are safer because of newer technologies, like fire-resistant construction materials, tempered glass and hard-wired, interconnected smoke alarms. Ask about these when touring the home and about other benefits of owning the particular new home you're exploring. If the environment is important to you, more and more new homes are using green building techniques that help minimize the impact on the environment, while minimizing your utility costs.