Dreaming of New Construction?

• Families scrambling to find a home in this market are having a tough time finding something with the inventory at a record low. Many of them are considering a new build. Building a new home can be extremely exciting, but it can also be overwhelming. It's important to have an agent who represents you and can help guide you through the process.  We'll be detailing more about the journey of home building in future blogs, beginning with this overview.  

There are three common types of builders you can choose from. 

Custom Building:

Custom builders can be hired to custom design and build a floor plan specifically for your family. They can modify plans, or have an architect design them from scratch. When exploring custom building the steps are as follows:  Select a lot, and make an offer contingent on a feasibility study. (More about that process later!  It's a whole thing!) Once you have your lot under contract and your feasibility study is underway, select the right builder for your project. You want to make sure your builder understands the location, neighborhood, and final design.  He or she should oversee the feasibility study with you making sure the lot can accommodate the footprint of your home and that final designs are compliant with any Association guidelines. You don't want to accidentally build a forward-facing garage if a side load is required! Mistakes like that are costly and on your dime. When you are custom building, you finance the build. Your agent can help you understand your financing options and what the construction to perm loan looks like. Your agent can also walk you through the process of the land acquisition and the feasibility study, which is imperative to minimize your risk.  After nailing down the lot and the builder, it's time to select and finalize your plan.  This order is very important: lot, builder, plan.   If you invest in a plan online you may find that you've spent money on something that can't be built where you want.  This process can take anywhere from 9-18 months depending on the project.

Semi-Custom Builders: 

If you are interested in building in a planned development where a local builder has floor plans to choose from, you may find a Semi-Custom builder is an option.  These builders typically have lots and floor plans available to choose from.  A big difference with semi-custom builds is that the builder often already owns, or has an option on the lot, and they bear the responsibility of financing the build.  Your financing options are more traditional in this case, and you can use a Conventional, a VA, or an FHA loan product.  Builders sometimes incentivize concessions tied to preferred lenders and settlement companies.  The builder will have a site agent who will explain the process and sell you on the lot, plan, and features, and that agent's job is to represent the interest of the builder. Having an agent representing you is important to help you understand your options, make sure you aren't overpaying, and advocate for you in the process.  Their commission is paid at settlement and is already factored into the price of the home. There is no benefit in dealing directly with a site agent and forgoing your representation. Semi-custom builders will often let you customize their plans.  You can add or forgo a fireplace, move a wall, finish an attic space, etc.  There is some flexibility to adapt the plan to fit your needs, without having the total financial responsibility of the build process.

Production Builders:

Much like Semi-Custom builders, these homes are typically in a planned subdivision with options for lots and floorplans.  They have site agents that may or may not be licensed real estate agents whose job is to represent the builder's interest in the process.  The builder will finance the build and you have minimal risk in that regard.  You may be able to select finishes like countertops or cabinet color depending on what stage of development the home is in but will have very few options to customize your home.  These homes go up quickly because everything is pre-planned, pre-ordered and a production process is often a well-oiled machine, with very few changes.

At Verity Group, our founders have extensive backgrounds in New Construction and the process allowing them to help countless families over the years.  We can't stress enough how important it is to have an agent who represents YOU if you are considering building a home, or buying new construction in a community or on a single lot.  We don't ever represent a builder, we represent our clients, and can help you understand your options and mitigate your risks. We will accompany you to the new home division, tour the model and work with the site agent as your representative.  In fact, if you visit a site without your agent you very well may have waived the right to representation altogether.  

Building or buying a new construction home can be a fantastic option!  Just make sure your first step is calling your Verity Group agent so you can understand the process and your option, and create a strategy to move forward.