Buying a New Build? Here’s a Checklist With Everything You Need to Know

Line up your financing

Once you’ve decided on an agent, it’s time to find a mortgage lender for your new home. Builders often provide financing for their homes, but that isn’t always going to give you the best deal. Go online or make some phone calls and see which lenders work with new construction loans.

Questions to ask your lender should cover:

• Current interest rates
• Types of loans they offer
• Builders they work with
• What fees they charge, including origination fees
• What their timeline is for the loan (depending on the type of loan, you may be limited to one year or less)

You also can discuss mortgage options with your agent, as they are likely to have some good insight on lenders that are easy to work with — as well as helping you determine whether the builder’s financing, which sometimes comes with added incentives and discounts, would be best for you.

Choose your builder

Using a reputable builder is probably one of the most important factors when buying a new construction home. Chicago agent Matt Laricy, who has more than 22 years of experience in the industry, says that due diligence is essential when vetting a builder.

Laricy explains that some builders set up shell companies — businesses that exist mostly on paper and don’t have actual operations or assets. This can become a serious issue because if problems arise with the home later, these companies can quickly dissolve, leaving homeowners with no recourse for repairs or accountability.

“I’d also be hesitant to buy from a builder’s very first development. They are learning as they go, and you don’t want their problems to start with you,” he adds.

Laricy suggests researching and interviewing a builder just like you would anyone else.

Things to consider:

• Make sure they have a strong portfolio of work — and review it.
• Look online at customer reviews and any reports with the Better Business Bureau.
• Ask your agent about builders and determine who has the best reputation.
• Review past developments they’ve completed and see if there are any ongoing issues with the homes there.
• See how long their builds usually take, and make sure that timeline is reasonable for you.
• Find out what their packages include and what features or materials are considered upgrades.
• Check their track record on following up with issues after the build is completed.
• Talk to the builder about escalation in costs and how they manage it if materials suddenly jump in price or there are other, unexpected expenses.
• Ask about what warranties will be available and what’s covered under them.

Choose your development

Figuring out where you want your new home to be built is another important — and permanent — decision. After all, if you decide you don’t like the light fixture you chose in a particular room, that’s an easy fix, but the location of your house is forever!

Find out where the new developments are being built in your area, and see what’s available. Ask yourself:

• Do you need to be near work or schools?
• Are you looking for a development with mostly single-story homes, or do you prefer two-story?
• What style of house do you want? Modern? Traditional? Which developments have these types of homes?
• What size of lot do you want? Most developments have a predetermined lot size for each home.
• What kind of amenities does each development include? Community pool? Gym?
• What about an HOA? Do they have one? What is the cost, and what does it include?

Choose your lot

While lot sizes usually are established by the builder, prices can vary somewhat based on the lot’s exact location and when you buy.

If you get into a development that’s just breaking ground, you might be able to get a good deal on a lot. On the flip side of that, if you buy one of the last lots available, you could pay more, especially if it’s a highly sought-after development and builder.

If you do have your choice of lots, think about which one best suits you and your lifestyle:

• Do you want a house that’s closer to freeway access, or more tucked into the heart of the neighborhood?
• If the development has amenities like parks or community pools, do you want to be closer to them, or further away where it might be quieter?
• If there are different lot sizes to choose from, what size do you want? Smaller with less maintenance, or a place with room for a big yard?
• Do you want a corner lot?
• Do you want a lot that already has some trees on it?
• Do you want north-facing, or south-facing?

You also can consider factors like the lot’s drainage, whether it’s graded flat or features a terraced back yard, and if you’ll have neighbors directly behind you. Location affects price, and desirable lots — like corner plots — often come with a higher cost.

Decide on a floor plan

Once you’ve locked in your builder and selected your lot, the fun begins, starting with choosing your floor plan!

The builder usually will offer a few different options, and within those, you can sometimes make small changes. “You might be able to move the laundry room to a different location,” Laricy says, “or maybe change the kitchen island style.”

Questions to ask yourself about floorplans:

• How many bedrooms and bathrooms do you need?
• If it’s a two-story, do you want a ground floor master bedroom?
• Do you need a separate office space?
• What kind of layout do you like? Do you want an open flow, or something more compartmentalized?
• Do you want the extra light (and potential extra cost) of more windows?
• What kind of front entrance do you like?
• Do you need a pantry for the kitchen?
• Or a designated laundry room?

Like anything having to do with new construction, if you want changes to the floorplans the builder offers, it might cost you. Take time to really evaluate the builder’s offered floor plans as opposed to what you have in mind, and if it’s not exactly what you want, look for compromises.

Personalize finishes

One of the great things about a new build is that you get an opportunity to make the space your own from the very start. Instead of painting, redoing flooring, or remodeling entirely like you might do in a pre-existing house, new construction means you get to pick out the finishes to your new home. This involves a visit or two to the builder’s showroom, where you can see the options available to you.

Here’s where you definitely want to make sure you understand what’s included in your package and what isn’t, what is standard, and what’s considered an upgrade.

“Just because you see hardwood floors in the showroom photos doesn’t mean hardwood floors are included,” Laricy says. If you don’t want to have to pay more, you’ll be choosing your finishes from what the builder offers within the package you’re purchasing.

Some of the finishes you might get to choose include:

• Paint colors
• Flooring type and color
• Kitchen countertops
• Kitchen cabinets
• Light fixtures
• Bathroom vanity style and color
• Tub and shower color
• Bathroom and kitchen faucets and sinks

Selecting all these new things can be a lot of fun, but again, be aware of the confines of your particular contract with the builder.

“They will have the basic materials, then they’ll have upgraded materials,” Laricy says. “You want to find out what’s standard and what’s an upgrade.”

Should you get the upgrades?

It’s tempting to immediately want to go for an upgrade, especially if you think what you’re getting is going to be higher quality than the standard options. But that isn’t always the case, Laricy says.

“An upgrade doesn’t always mean an upgrade,” he notes. “Sometimes the quality of the regular finishes are better than an upgrade because they are getting the standard materials at a bulk rate. You could be paying more for a product that is actually of a cheaper quality, simply because they aren’t buying it in bulk.”

If what the builder offers with the base package isn’t exactly what you want, think about going with it anyway, then making minor changes yourself after you move in. This can be a lot cheaper in the long run — you won’t be paying builder prices to upgrade items!

The timeline

As the build begins on your new home, you’ll probably be wondering about the timeline. How long does new construction take, and what kind of things do you need to track? When will you actually close on the house and be able to move in?

This is where you’ll need to have some patience because new builds often take longer than the initial timeline. “It’s never accurate,” Laricy says. “I tell buyers to add a minimum of three months.”

Before you balk at that kind of delay, understand that while a builder might anticipate a projected finish date, they can’t always anticipate issues such as delays in receiving materials or retaining labor for the job.

You can ask your builder or agent about the specifics, which might help you get a more accurate idea of when the house will really be done. Here are some of the questions you might consider so you can better understand the timeline:

• When will the foundation be finished?
• How long will framing the house take?
• When does the roof go on?
• At what stage do they install major systems such as plumbing, electric, heat and AC?
• When does the drywall go up? What about other finishes?
• When is the cabinetry installed in the kitchen and bathrooms?
• What about landscaping? How long will that take?
• What is the anticipated closing date?
• When will we be able to move in?

Because the timeline of your build can be a bit fluid, you’ll want to make sure that wherever you’re living during construction, you’ll be able to extend your stay, if necessary.

The inspections – and there will be a few!

Unlike a pre-existing house, which usually has one home inspection prior to purchase, a new construction home often will have several.

These happen in stages as the house is being built. Depending on where you live, you may or may not be able to attend these inspections. In places like Chicago, where Laricy works, most buyers attend a pre-drywall walkthrough and then the final walkthrough. “In my market, buyers aren’t allowed back into a build until it’s complete,” he says.

Some phases of the inspections will include:

• Pre-pour inspection, where the inspector looks at things like elevation and grading
• Framing inspection
• Inspection of systems, such as plumbing and electrical
• Final inspection, where they will look at all the finishes, windows and doors, HVAC, sinks, tubs, showers, cabinets and countertops, and the foundation

Your agent can help you find an inspector who has new construction experience, something you’ll definitely want as you go through the process. You also can talk to your agent about whether they’ll be attending the inspections, and whether you can attend as well.

Final walkthrough

Before you sign the closing papers on your new home, you’ll do a final walkthrough with your agent. This is the time to really take a close look at the house and see if there is anything the builder missed or any items that need repair.

You might assume that the final walkthrough is just a formality since everything in a brand-new house should be flawless, right? However, it’s essential to thoroughly inspect the home before closing; otherwise, you could encounter some unexpected and unwelcome issues once you move in.

Here’s a quick overview of inspection items:

• Exterior of house
• Landscaping, driveway, front walk
• Fences, sheds, any add-ons
• Garage
• Door and window functionality
• Walls, ceilings, floors
• Trim and baseboards
• Kitchen and baths
• Electrical (bring an outlet tester)
• Attic and basement or crawl spaces
• Sinks, toilets, tubs
• HVAC
• Appliances
• Cabinets
• Gouges in wood or imperfections in countertops

If you find anything concerning, have your agent contact the builder right away so you can work with them to get things resolved.

After the move-in

Once you’ve got the keys in hand, packed up your old place, and moved everything in, you might be surprised to find that there are still a few problems that crop up with your newly built house.

“People think they don’t have anything to worry about when they buy new construction,” Laricy says, “But I tell them that new doesn’t necessarily mean new — it’s still a product that is being built, and there can be issues with any house.”

Things to look for:

• Water issues, like leaks
• Window insulation problems
• Roof flashing installed incorrectly
• Basement dampness
• Drywall insulation
• Cracks in the driveway or walkway
• Cracks in drywall
• Flooring issues like cracked tiles or uneven wood
• Doors or windows sticking

Depending on when the problems start, you do have some recourse in following up with the builder. “Most developers give a one-year warranty,” Laricy says, “But make sure you read it thoroughly, because it may not include everything.”

Building a new home can feel overwhelming, but staying informed and having a solid checklist — along with the guidance of an experienced agent — can make all the difference. With the right preparation, you’ll navigate the process confidently and find that the anticipation of your dream home is well worth the wait!

Header Image Source: (Nikunj Singh / Unsplash)