It’s possible that you’re making outdated assumptions if you’ve been passing up recently constructed homes in your search. Let’s dispel some of the most widespread misconceptions so you don’t pass up a good chance.
Myth 1: New Homes Are More Expensive
It’s simple to believe that a new home will cost more than an existing one, but this isn’t always the case, particularly at the moment.
The median price of a newly constructed home today is actually less than that of an existing home, according to data from the National Association of Realtors (NAR) and the Census:
What is causing this, then? According to Navy Federal Credit Union Chief Economist Heather Long:
“This primarily reflects two trends: builders are lowering prices more frequently and new homes are generally getting smaller.”
It’s time to look again if you’ve discounted new construction due to cost alone. To find out what’s available (and at what price points), speak with a local real estate agent.
Myth 2: Builders Don’t Negotiate
When it comes to negotiating, many buyers believe builders won’t be cooperative. However, that is simply untrue. Many builders have completed inventory that they would like to sell as soon as possible. They are more willing to compromise as a result. First American Chief Economist Mark Fleming describes a builder:
Since they are no longer residing in the house, they would be happy to sell it to you. The cost of not selling the house is high. Additionally, in their earnings calls, a number of public home builders stated that they would not be reducing incentives, particularly the mortgage rate buydown.
This implies that builders might be more accommodating than individual sellers and more inclined to offer incentives in order to close the deal. In June, 75% of new home communities provided incentives for new homes that were deemed quick move-ins, according to Zonda.
Myth 3: They Don’t Build Them Like They Used To
Older homes are thought to have better craftsmanship than newer ones. Here’s a reality check, though. In any era, quality can change. Furthermore, choosing a trustworthy builder is more important than the build date.
Speaking with buyers who have recently made a purchase from that builder is a good way to determine quality, according to the National Association of Home Builders (NAHB). NAHB clarifies in an article:
According to the article, you should ask those buyers questions like:
Were their expectations fulfilled by the builder?
If you had to do it over, would you use the same builder?
However, you can also inquire about the builder’s reputation with your agent. Agents typically have knowledge of the builders operating in your neighborhood and may even have firsthand knowledge of previous customers who have purchased homes in the communities of that builder.
Myth 4: You Don’t Need Your Own Real Estate Agent
Perhaps the greatest myth of all is this one. In actuality, hiring your own agent is even more crucial when purchasing a brand-new house. You’ll want an expert on your side who can truly explain what you’re signing and fight for your best interests because builder contracts have different fine print.
These statistics appear to support that. According to a Realtor.com survey, buyers of newly constructed homes thought their agents were much more helpful than the builder or the builder’s agent during the process (see the illustration below):
Conclusion
Don’t let false beliefs prevent you from looking into one of the most promising options available in the current real estate market.
Frequently Asked Questions About Buying a Newly Built Home
1. Are newly built homes always more expensive than existing homes?
No, newer homes aren’t always more costly than older ones. Location, size, features, and market trends all affect price. In certain instances, builders provide discounts or incentives that can lower the price of new homes relative to resale properties.
2. Do new homes come with hidden costs that buyers should watch out for?
Reputable builders offer thorough documentation of standard features and optional upgrades, even though there may be some additional expenses, such as upgrades or homeowner association dues. It is advisable to request a breakdown and account for expenses that might not be covered, such as window treatments or landscaping.
3. Is it difficult to negotiate with builders compared to traditional home sellers?
Although builders do have fixed pricing structures, it is possible to negotiate, particularly in slower markets. You might be able to bargain for flexible move-in dates, included upgrades, or assistance with closing costs. Builders frequently run promotions, and working with an experienced agent is beneficial.
4. Are newly constructed homes located only in less desirable areas or far from city centers?
There are new developments in a variety of places, including cities and suburbs. Builders frequently construct in emerging or revitalized neighborhoods with access to schools, transportation, and amenities as communities grow.
5. Does buying a brand-new home mean you won’t need to worry about repairs or maintenance for years to come?
Regular maintenance is still required even though new homes typically have fewer urgent repairs and come with warranties on materials and systems. Although wear and tear occurs over time, significant problems are uncommon in the first few years, providing buyers with additional peace of mind.