Your New Construction Resource
Welcome to our New Construction page! Here you'll find useful tools, links, articles and building options as well as have access to the newest listings for new construction homes.
New Construction Home Buyer’s Guide:
Do’s and Don’ts
Buying a new construction home comes at a premium. The process can be a walk down the path to moving into your dream home or a slippery slope into financing your own nightmare. Here are the do’s and don’ts when buying new construction:
- Treat the process with the seriousness it deserves.
Usually new homes are expensive relative to used homes on the market. The average new construction home sold in Rochester Hills in 2018 so far costs $584,681! Make sure before making a big commitment you know what you want.
- Talk to more than one builder.
Get an idea at the differences between builders. Most builders will build on a site of your choosing. Even if they don’t, it’s good to compare differences between builders. You may get an idea that saves you thousands or find that certain builders “standard features” are considered “upgrades” by other builders. Sometimes homes aren’t the bargain they appear to be. Consider the cost of amenities such as lawn, landscaping, patios, decks and finished basements.
- Ask the homeowners in the community if they’re satisfied with their home.
This is a BIG one. Every home site is different – even home sites built by the same builder. Talk to the homeowners who recently purchased and ask them about their experience. Ask the builder’s sales associate which building supervisor will oversee the construction of your home. Find homes that supervisor has already built in the community and check the quality.
- Check online for reviews.
Online reviews can be helpful. Take them with a grain of salt and consider the size of the builder you are choosing. It’s human nature to complain; however, focus on the reviews that are customer service oriented. When an issue arises – which one most certainly will- how did the builder correct the issue? Look for negative patterns. Ask the sales associate how they’ve improved upon common complaints. If the rep has no idea what you’re talking about, consider that a MAJOR red flag.
- Get a home inspection.
Hire a professional, well respected home inspector. Your Realtor should have several to recommend. Major design flaws can be uncovered. The cost of a typical home inspection ranges from $300-$500 and is worth the cost.
- Find out what your neighbors paid.
It’s often understood you don’t want to be the most expensive home in your neighborhood. When it’s time to sell you’ll be at the mercy of your neighbors. If everyone opted out of 100k in upgrades that you decided to get, you may be left with a home that is worth less than you’re asking and that won’t appraise for a new buyer to acquire financing.
- Go it Alone.
Find a respected and knowledgeable local Realtor with experience in assisting clients in new construction homes. A referral from a friend, family member or someone in the real estate industry goes a long way. Not all Realtors are passionate about education or have the experience you need. Finding the right Realtor could save you thousands and prevent a lot of stress both during and after your home has been built.
- Fail to get a good faith estimate.
A good faith estimate is a requirement according to the federal government’s Truth in Lending Act. A good faith estimate will clearly outline the total cost of your mortgage and allow you to shop for mortgages to compare apples to apples. Often the builder will incentivize you to work with a mortgage company of their choosing by giving you a credit towards upgrades or something similar. This may be a good option but the only way to know for sure is to understand the TOTAL cost of your loan and to shop around by comparing estimates.
- Be reluctant to negotiate terms.
A good Realtor can help you negotiate terms. Most builders are opposed to negotiating hard on price. Once a bottom price is set in the neighborhood it’s public information and becomes hard to sell homes for anything above that bottom price; in addition, many builders operate on thin margins. There are however, more private ways of negotiating that allow the builder to save face. These discounts come in the form of credits towards closing costs, upgrades at no extra cost or reduced lot premiums.
- Lose your reasoning ability.
The home buying process can be an emotional experience. You should walk the line between a solid investment and the home of your dreams carefully. Often, a home can be both a good investment and the home of your dreams. Usually it’s one or the other and rarely it’s neither. Consider choosing upgrades carefully. There are costly upgrades you may never see in the re-sale value – think lot premiums and extravagant finishes. Adding extras is alright if you know that you’re building a home to meet your needs now and not necessarily for re-sale later.
- Close before your “punch list” is complete.
A reputable builder will create a “punch list” for you. The list will contain problems that need to be fixed. Some fixes are easy such as, re-caulking, nail pops etc., while others could be more serious. Some builders will promise to fix these items after closing. Never close until the home is move in ready and finished completely.
By Co-founder DreamHomeDetroit.com
Active Area Builders
Working with a larger, reputable builder has its advantages. Including home warranties, a proven building system, enhanced communication, incentives, peace of mind and more. Below is a list of the most active builders in the metro Detroit area and links to their websites. Many builders offer incentives when you work with a Realtor. Always make sure to talk with a Realtor before signing anything or beginning the process with a builder.