Steps To Buying a New Construction Home
This guide covers a real-life case scenario of buying a new construction home. The guide was written by one of our borrowers who was questioning buying a new or existing construction home. We will take one homebuyer’s experience in buying a new construction home and the homebuying and mortgage process.
Buying a new construction home can be an exciting and rewarding process, but it also requires careful planning and consideration.
Many homebuyers contemplate buying an existing home or a new construction home. In the following paragraphs, we will cover the case of a typical homebuyer buying a new construction home. You hear the hurdles during the mortgage process and the rewards after closing the home. We will cover the steps to help you navigate the process buying a new construction home.
Determine Your Budget Buying a New Construction Home
Assess your financial situation to determine how much you can afford. Consider the purchase price and additional costs like closing costs, property taxes, and ongoing maintenance.
Research Builders and Developments
Look for reputable builders and new construction developments in your chosen area. Read reviews, visit model homes, and gather information on the builders’ track record and reputation. Select a floor plan that suits your needs and preferences. Consider the number of bedrooms, bathrooms, layout, and any customizations or upgrades you want.
Review Contracts and Specifications
Carefully review the builder’s contract and specifications. Pay attention to the construction timeline, including features, warranties, and any additional costs for upgrades or changes.
Secure Financing Buying a New Construction Home
Get pre-approved for a mortgage to understand how much you can borrow and the interest rates you qualify for. Shop around for the best mortgage terms and rates. Once your offer is accepted, work with your lender to finalize your mortgage application and secure financing for your new home. Work with your real estate agent to make an offer to the builder. Negotiate terms, including the purchase price, upgrades, and incentives.
Get a Home Inspection
Hire a home inspector to evaluate the property before the final walkthrough. New construction homes can have issues, and an inspection can uncover any defects that need to be addressed by the builder.
Before closing, schedule a walkthrough with the builder to inspect the home and create a “punch list” of items that need attention or correction.
Remember that the process of buying a new construction home can vary based on location, builder, and specific circumstances. Working with experienced professionals, including a real estate agent, attorney, and home inspector, is crucial to guide you through the process and protect your interests.
Buying a New Construction Home In Hampshire, Illinois
When I meet with friends I haven’t seen in a while or meet someone new, and they ask where I am living, I respond with “Hampshire,” and they look at me like a deer in headlights. Then I must tell them it is near Huntley or “just west of Elgin.” Then I get the customary “Oh, okay, like by the farms?” Yes, I picked up my family and moved us to a farm in the northwest suburbs, right?
Going From Renting To Buying a Home
Let’s back up a little bit. I was born and raised in the suburbs right next to O’Hare airport. In fact, at times, I thought the airport was in my backyard; I was that close. Before getting married, I moved out to Elgin near the Hoffman Estates border.
After a few years, we moved into a townhouse rental about four blocks from the Hoffman Estates border. When our daughter was turning four, we had to decide what to do regarding education and purchasing a long-term home, as we couldn’t live in a rental forever.
We knew where we lived was a U-46 school district, and we were not thrilled to put our daughter into that school system. After quickly looking at homes and schools in the Schaumburg/Hoffman Estates area, we knew our budget of $250,000 was going to need more space, so what was there to do? We looked west as affordable new construction was going up everywhere, and newer homes were also for sale.
Choosing a Location Buying a New Construction Home
Decide on the area or neighborhood where you want to buy your new home. Consider proximity to work, schools, shopping, and other amenities. We first began to look around the 301 school district as the schools were all highly rated and newer. The housing was also newer or brand new. We liked the area of far west Elgin, but the prices were still just a touch out of reach as we didn’t want to settle for something smaller and older.
We moved just a little farther west to Pingree Grove, and if you read my previous posts, you will know we lost out on a short-sale home here.
After this house fell through, we focused on Hampshire, as a new Ryland community was still being built. District 300 schools were also highly rated and were mostly brand new. After seeing the prices of homes in this community, we knew we could make this work. The location was still a bit farther west than we thought we would have to go, but it couldn’t be in a more convenient area at the 90 and 47 interchanges and close to Rt. 20. Okay, great.
Post-Closing and Warranty on New Construction Home
Take advantage of any builder warranties and address any issues that arise during the initial period after moving in. Sign the final documents, pay the remaining balance, and take possession of your new home. The builder will provide keys and necessary information about the property.
Closing and Moving into Your New Construction Home
We had our area picked out, and after purchasing our home, we got our house for just about $250,000 on the nose. Friends and family had to get used to coming out to our house to visit, and to this day, we still get the jokes of “Man, we should have packed a cooler” or “I didn’t know I was driving to Wisconsin.”
Complete all necessary paperwork, including the mortgage documents. Pay any closing costs, taxes, and fees. Plan your move and start settling into your new construction home.
Listen, folks, just because your sheltered lives don’t take you past Woodfield Mall on the 90 doesn’t mean I am in the middle of nowhere. I live Thirty minutes from Woodfield and 7 minutes from Randall Road, where anything and everything is there. What it comes down to is that there are still new construction options for families with a budget of $250,000 or less. You may have to leave your comfort zone, but the new communities and schools will be well worth it in the long run. I am happy where I am, and you can be too!
