Sales of new homes are only about 11% of all home purchases. However, finished houses for sale more, than existing. According to the study, Most buyers are aware of the serious shortage of existing homes for sale, whose offer in December 2021 year decreased.
More than one-third (34 percent) of all single-family homes, put up for sale in December, were new buildings, which is the highest proportion on record.
Although, these statistics can improve the outlook for buyers, frustrated by their inability to find a home, There are a few differences between buying an existing home and a newly built one. One of the largest: Your Timeline. But in any case, we recommend buying Real estate from the developer, whether it is in Penza or in the suburbs.
As soon as you find an existing house or apartment and sign a contract with the sellers, You, usually, You can close the deal and move in within a month to six weeks. When you buy a new home, It may take six to nine months or more, before you can move. Sometimes people move more than a year after, How the initial contract for the ownership of a house or apartment is signed.
Sales of new homes are only about 11% of all home purchases. However, finished houses for sale more, than existing.
The timing of new construction may be delayed this year due to supply chain disruptions and shortages of materials and labor.
Building a new home is definitely different now, Today, builders are postponing the pre-sale of their homes, because they don't know, How much will it cost to build, and they don't know, How long will it take?. Now builders are more likely to start building a house, Before you sell it.
Buyers may find themselves on a waiting list for many shipments and should be prepared for possible delays until then, until some supply chain issues improve. When the housing market is not so tight, Buyers can sometimes find a new home, which is already finished or almost finished, To speed up deadlines, But now there are almost no such people.
Buying a new home requires a few different steps, than buying an existing one, But the main path still involves financial preparation, Setting Your Priorities and Finding a Property.
Here's what you need to know, Solving, Is it worth buying an existing or under construction house?, Or maybe an apartment. Information on new construction refers to the "production houses" in the unit, and not to custom-made houses, built on your plot, which usually require different funding and a longer schedule.
The Role of Real Estate Agents in the Purchase of New Homes
For most buyers, the journey to moving into a home starts with a real estate agent and lender. While 88 percent of buyers worked with a real estate agent, to buy your home last year. 7 percent bought directly from the developer or the developer's agent. Real estate agents usually can't negotiate with builders about the price of new homes, Because it depends on supply and demand factors. However, agents can provide advice and understanding to buyers about new homes.
An agent can help you assess the quality of construction and finishes, floor plan, whether the sockets are installed correctly, How much storage space is available, as well as help you visualize the premises.
Housing prices are rising with the beginning of the new year
Sales professionals in the community of new buildings represent the developer, Therefore, it is useful for buyers, to someone, representing their interests, read the contract and negotiated the modernization.
Realtors go with buyers to model houses and make sure, What they know, What features are included, and which are additional. Sometimes builders offer upgrades for 10 000 dollars, eg, solarium, But it won't really cost them that much money, Therefore, the realtor can negotiate on behalf of buyers for another upgrade.
Buyers may find themselves on a waiting list for many shipments and should be prepared for possible delays until then, until some supply chain issues improve. If you want to work with a buyer's agent, Your agent has to go with you, To visit model houses and register, To get a commission from the builder.
Buyers sometimes think, that they can save money on new construction, without working with a real estate agent, But usually, builders do not offer discounts, Especially in a tough market. Buyers should read their home purchase agreement carefully, Because there are points, which allow the contract to be terminated under certain circumstances.
Do you hire a real estate agent, really depends on your comfort level as a buyer.
Financing Your New Home
The financing options for new homes are the same, As well as for existing ones, including conventional loans, gigantic loans (amounts that exceed the normal credit limits) and loans, Insured by the state. However, many large developers are associated with a mortgage company. Builders of all sizes have a list of preferred lenders and title companies for their transactions.
Builders want, for buyers to use their lender, because they can control more process and know, that their creditors will meet the deadlines, To close the loan on time. In some cases, their lending division also generates income for them. They often offer incentives for buyers to work with their preferred lender, such as payment of closing costs, Offering credit for additional features or lowering the deposit requirement.
Buyers are advised to consult with at least one other external lender, To compare rates and fees with your preferred lender's offer. In some cases, the developer's lender will seem like a better deal, But this will come at the expense of the mortgage rate, which is higher by one-quarter of a percent or so for the life of your loan. Sometimes, another lender will match the cost of the developer's incentive, To secure your business, Therefore, it is worth taking a closer look.
While buyers and sellers usually share transfer taxes and some other closing costs of existing real estate transactions, Buyers usually pay all the costs of closing a new construction. This makes the developer's offer to pay these costs even more tempting. Before you can sign a contract to buy a house, You'll need a mortgage pre-approval letter from the developer's preferred lender or other lender. Some builders require the approval of their lender, even if you don't complete your financing with this lender.
Besides, You need cash to make a deposit, which is usually also attached to the offer letter for the existing home. Some builders want to make a deposit of about 1000 dollars, to keep the plot for the buyer for several days, until they get pre-approved for the loan. You may also need to pay extra for plots, which are larger, have a better view or a more desirable location within the community.
The deposit from builders varies from 3000 to 5000 dollars to 5 or 10 percent of the total cost depending on the price of the house and market conditions.
This can be a significant difference in cash needs, Because the deposits on existing houses usually range from 2 to 3 percent of the value of the house.
In the case of new construction, you usually have 15 to 30 days, depending on the contract, To get your deposit back. With an existing home, you usually have more time, to return your deposit in accordance with the terms of the contract.
While borrowers, Buying an existing home, Usually, they can fix their mortgage rate, to guarantee this interest rate for a month or longer, without incurring additional costs, Fixing your bid can be more difficult with new homes due to long construction times.
You can fix the mortgage rate for up to a year, But it will cost a lot more, than if you fixed it for a period of 30 to 60 days. It's a game of chance, because you don't know, What will be the stakes, When your home is ready, and you want to make sure, that you can still afford the payments, But you also don't want to spend too much money. The mortgage company usually fixes the interest rate, when there is a specific date for the completion of the construction of the house.
While you wait, until your house is built, We recommend saving more money, pay off debts and pay all your bills on time, To maintain or improve your credit score. Your lender will double-check your finances just before closing.
Don't buy any large consumer goods or a new car, Because it can hurt your credit score and cause a higher mortgage rate or prevent you from claiming a home.
Choose a developer, plot and floor plan
Shopping for a new home can be started online, As well as for existing ones. You can search for information on builders' websites, Virtual Tours & Floor Plans, To narrow down your priorities.
Before choosing a developer, Plot & Floor Plan, We recommend that you ask questions about public facilities, Plans & Maintenance. You need to know, What is included in the contribution of the homeowners association and whether the community will clear roads and take care of the territory.
In some new communities, buyers have to pay additional fees to build infrastructure, such as roads, and for the commissioning of utilities, Therefore, buyers should ask about the possibility of such fees. It is important to find a builder, who you can trust.
To check the quality of the developer, You can go around their existing communities and ask homeowners to share their experiences with the builder. You can look at their awards and read reviews, But it is reasonable to treat them with a grain of salt, because people often complain more online, What is praised about business?.
All builders must build homes in accordance with building codes, adopted in their jurisdiction, which also requires numerous inspections at various stages of the construction process.
Newly built houses are covered by a guarantee of workmanship and structural strength. For such materials, Like windows, Roof, home appliances, heating and air conditioning systems, Also covered by your own warranty, which is the advantage of new construction. We recommend checking the extended warranties, which some builders can offer.
Another way to evaluate a builder is to look at their construction site and house models, To make sure, that they are kept in good condition and clean. After that, How Your Home Will Be Contracted, You can hire an independent home inspector at different stages of construction, to check the quality of construction and correct any mistakes.
Choose your options
While some builders allow for customization of the house, Many manufacturers offer a package to choose from either in color and finish, or by the level of quality, or both. Many builders have a design board, which includes cabinets, Counters, Floors, aprons and paint colors, Prices for which depend on the level of quality.
You often get the most value from these design boards, Because builders negotiate with suppliers about these elements.
Some builders have a design center with many personalization options.
maybe, You will have to bring more money to the builder, To pay for upgrades. It depends on the developer and the cost of upgrades, But sometimes you'll have to pay for these upgrades, While your house is being built, Because it can be harder for a builder to sell, If you withdraw from the contract.
For many buyers, the joy of buying a new building lies in the ability to personalize every feature, But you have to be mindful of your budget and future resale value.
If you're on a tight budget, It makes sense to spend money on things, which are then difficult to change. You can also spend more on products, the quality of which is easier to assess;, and less on other subjects, eg, The idea of wearing a shirt from [discount store] with a belt from Gucci.
Although not all builders offer structural options to buyers, These are the best places to invest money down. Later, adding a covered veranda or solarium can be expensive or impossible.
If you can wait, while a new house is built, This may be your best option on the market with few existing homes available.