4 Facts About New Home Construction

It is true that we have been hearing news that the market has been slowly improving in some states and because of this a lot of buyers have been acting accordingly by looking, investing, and purchasing real estate while the direction of the market goes up. 

 Although the constant improvement is still not guaranteed to be stable, there are still a number of homebuilders out there right now who are buying land, creating plans, and building homes for prospective buyers in the current market. But before you make a decision of going down that road, here are a few facts about new home construction that you should know: Sold Before They’re Built Builders initially get financing lined up then get construction going plus a sales process, which means selling as many homes before they’re even constructed. To be able to do this, homebuilders build showrooms complete with fixtures, décor, and functional furniture, to give prospective buyers a tangible feel of how the envisioned home would look like once constructed, which then would also entice them to purchase a property from the homebuilder. Be aware though that homebuilders do not build homes in bulk. They usually do this by phases where the first phase would probably contain 10 houses built, and then another phase having 10 more built right after. If the first phase sells fast, the tendency would be that the next few phases would increase in price. Early Bird Gets The Worm As mentioned above, if a project’s first phase sells quickly, it becomes expected that the following phases of the same project would increase in its price. This means, it is always safe to assume that being one of the first interested and eventual buyers of a property, you will get the best and cheapest deals. Usually these deals are introductory prices to the market and made in order to gain attention from other buyers who are looking. This is also done to be able to provide the builders’ investors positive feedback that their project is selling. A perk of being one of the first few buyers is that you can still negotiate to a lower price for the home that you’re eyeing. You have to be reminded though that there comes a risk with this reward as well. Being one of the first few to purchase would mean that your money might get stuck on that investment until the project is finished. When worse comes to worst, there is also a possibility that the project would shut down half-way through, therefore losing your down payment along with it. Upgrades Are Discounts When the sale of a project is nearing its completion, the builder may be a little more flexible in adding a few perks to your purchase for being one of the buyers of the last few units left. These perks may not come as a discount, since closed deal prices become public record, but through upgrades in the home fixtures. The builder may not give you a price discount but he can provide hardwood floors instead of carpeted flooring which may also become good investment since it could save you from home maintenance in the long run. It’s A Numbers Game Buying property from a seller who has owned a property for years, you may be faced with a price that’s a little higher than the property should be in the market. This is because the owner might have also added a price on his emotional attachment and the sentimental value to the property. Compared to home sellers who have invested money, time, memories, and emotions in a home, home builders don’t have any emotional attachment to the property they are selling, hence, negotiation will be purely business.