First-Hand Experience Buying New Construction

Certified Mortgage Advisor
NMLS 1701021
Published 
October 24, 2020

How is it like to purchase a newly built home?

A good friend of mine, Scott Smith just recently purchased a newly built home. Now I know a lot of you are looking at purchasing a newly built home instead of a pre-existing one. And I asked him to share his experience.

So the following is going to be Scott sharing his experience all the way from the beginning to the end. You can hear from somebody who actually purchased a newly built home, what their experience was like going through this.

Scott's experience about newly built home

According to Scott, he and his wife went through in building their first home. A little backstory, he and his wife have been married for 15 years. And they started out renting homes. They actually rented an apartment. Matter of fact, it was low-income housing because he started out his career as a school teacher, and he said he was making nothing. His wife was still in college and so we actually qualified for low-income housing and they started there a year into our marriage they had a family that offered them to be able to rent their house for a year. And they did that.

Making changes for their growing family

Then, they had the opportunity to buy their first home a couple of years into their marriage. So they did that and that was a great time. They lived in that house for 13 years. And it got to the point where they had their son and he was growing up and it was a small house. It was a starter home, two bedrooms, one bath I'm six foot three and the ceilings were so low in the house that he could literally palm the ceiling without even having to extend his arm up.

So they got to a place where even though they enjoyed the property, the location, where that house was at they just needed a change. They needed something different.

How they decided to build

So they started looking into just buying a home. So they were looking at the housing market going on Zillow, doing the whole search, and in their area, in their market, it was more expensive to buy a home already done than it was to build a house.

Which one is expensive, new built or existing?

And they didn't know that they just assumed that building was gonna be way more expensive. It was gonna be out of their league. So for probably a good nine months to a year, just occasionally checked Zillow. And he was getting those daily emails and et cetera, trying to find things. And what he found is like what we were looking for price-wise. It seemed like we were gonna pay a bunch of money and there was gonna be all kinds of it's just gonna be a big project to deal with.

Out of curiosity

So they actually saw some developments in their area. Some builders were building and so they stopped by an open house one evening and they talked to the builder. One of the reps, the sales reps for the builder and started to realize oh, building a house, it's in the same price range as what we were looking at with all these homes. And then they can get a brand new house. They get to get into it and enjoy themselves.

What made them decide

So that's ultimately what they decided to end up doing. And they decided to go with a pre-engineered house. So the builder, basically what that means is they already have the house fully designed. Basically, everything comes in different packages that you can select from and there's no real custom work at all. It's just, here's these different packages. And that has some pros and cons.

Custom built and not fully designed

The biggest thing for them was a custom-built home by a custom builder. Would've cost them about a hundred thousand dollars more than what they paid for their current home. So for them, the custom home was really out of the picture for them. And they said that they really didn't even mind the pre-engineered package deal. The benefit of that when they sat down with the salesperson is they walked through the houses. So here's like the different houses they had to offer. They walked through those and they very quickly said, yeah, this is the house design that they want. This is what meets their needs. And then she literally walked us through step by step. Like here are the options you have for the kitchen. Here are the options you have for the flooring. Here are the options you have for the outside. And they think they fully designed that house and picked out all the options probably within an hour and a half.

His sister and her husband and family just recently built a custom home and it seemed like they were still having to make design choices, even in the middle of the building process. So for him and his wife just living the lives that they live, they have pretty busy work lives. And they're making a lot of decisions. So he said that they just wanted that process simple. They weren't looking for something crazy.

Another one he said is the builder had already designed the house in such a way that it worked. It made sense. The flow made sense. The designs, the colors, all of that stuff to them, they were like, yes. That's what they would've chosen anyway. It made that process really easy to go in that direction. That's not for everybody. That was just for them. There are some other kinds of pros and cons.

Pros and cons

They had options, but they were very limited. It was very much here's like the kitchen cabinet package and here are three different ones you can pick from and you go from there.

There was no option if they wanted to move a doorway somewhere else like that, wasn't an option. Matter of fact, early on in the process, he asked if they got a basement on theirs, so it's something that they wanted. So very early on in the process, he asked if they had eight-foot ceilings in their basement and he asked if the contractor do a nine-foot or 10-foot ceilings? And they said, nope, they only do eight-foot ceilings. So he quickly realized, okay, this isn't custom. They're staying within the parameters, but that wasn't terrible for them.

Anything extra, cost extra

The other thing is anything extra, cost extra. If you wanted another outlet, that was gonna be an extra charge. And sometimes he said that it felt like man, to do something, what seemed basic seemed expensive. Like they would charge quite a bit.

For instance, we were looking at having can LED lights put in the ceiling, those lights at any like Lowes or Home Depot or something like that cost like $20 to $40, but it was gonna be like $200 per light. So four lights was gonna be $800, five lights is gonna be a grand. And it just seemed like that expense added up really fast. And so there were a number of things that they said, Hey, this is maybe not critical. And so they were just trying to save costs where they can.

What are the benefits?

A benefit though of the prepackaged houses of that pre-design, the pre-engineered house is that because of their packages, a lot of times the builder is willing to work deals. They'll call 'em incentives on certain things if you build within a certain time period. When they got in. It's a long story. Won't bore you with all of that. But when they got in, they had the opportunity to take advantage of an advantage where we got our basement completely finished by them.

So drywall, carpet, paint, like the whole deal was able to be completely finished by them, and that was like a $20,000 savings. If this was a custom home builder, typically sometimes maybe they might, but typically they're not gonna be discounting a whole area of the house in that way. That was a nice incentive and they're willing to wheel and deal depending on where they're at in the build process. Ours was one of the last house on the lot that builder was eager to close out their lot and their development. And so they were like wheeling and dealing to get things done.

Managing your expectations

The big thing for him and his wife, as they went to compare to other people that we've talked to that have been in the building process recently was, it seems like it's all about managing your expectations. Their expectations were they just wanted a house that was better than the one they were currently in which to be fair, was setting a low bar. But for them, they just like we have nine-foot ceilings in our house. So I can literally just walk through the house with my arms up because our last house had seven-and-a-half-foot ceilings.

There's no such thing as perfect

So it was those little things for us have made the world of difference world of difference for us as we've just been able to enjoy the house. You can't go into building a new house with the expectation that the whole house is just gonna be absolutely perfect. No matter if you buy or you build. There's gonna be issues. There's gonna be problems. There's gonna be things that aren't maybe finished a certain way that you want it to be.

Have a good relationship with the general contractor

He said that they found in that process that having a great relationship with your general contractor, that's the guy who's gonna oversee the whole construction process on the ground. It's a person who's managing the subcontractors, like the roofers and electricians and drywall people. That person builds a good rapport with them being in contact. If you have questions, ask them.

According to him, they would come out to the job site in the middle of the construction and they've been around enough construction sites to know that the construction site is not finished. If they're in the middle of building, there's gonna be things that don't look right. That looks unfinished. It is the general contractor's job to find those things, see those things, and correct them. In the middle of that build process.

Lucky during pandemic!

Fortunately, they got a great general contractor. He said that he was awesome to work with and would answer their questions. He said that they built in a weird time with the whole pandemic thing. So they couldn't necessarily come into the house and come and go as they pleased. But they were able to communicate with them and they felt like that. Worked really well to make sure things were done correctly and that their questions were answered.

He said that there's gonna be things even still, they find some things here and there that maybe aren't perfect. But for them, it's reached their expectations that they just want a good home. For him, he knows things aren't gonna be perfect, but he enjoys what they have.

And so that's what you go into, what your expectations are going into a project like that are really key in terms of how you're going to experience the process. As well as how you're gonna experience the home afterward. We're really thankful to be able to have built.

They won the house they love!

According to Scott, they had a great experience. They are enjoying the house. They've been in it for a couple of months now. They love it every night at dinner and they just say a prayer of gratefulness for what they get to experience and enjoy. They've been able to have some friends over and really be able to maximize the space well and for them being in a space that's new, that feels like theirs from the start, doesn't feel like they have to undo what the previous owner had done to the space to make it feel like theirs is just a clean slate. Was a great experience in terms of choosing to build over buy. Again their area was about the same price, if not cheaper to build than it was to buy something that was already in existence in our market.

Great advice

So hopefully that was helpful for some of you who are looking at the building process as an option for your next home. There are a lot of options out there. Do your homework, and ask a lot of questions. Find a general contractor who will respond to you and communicate with you. And I'm sure you will have an opportunity to love your house as much as they have.

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