When you are buying a resale home, the process is can be different from buying a new home. In a used home the home is already completely built and the new construction sometimes you will have to wait for the finished product. We will share the differences in each process so that you can see the advantages and disadvantages.

The Difference in the Process

1. Finding the Right Home

During the home search process involving a resale, the home that you are going to buy is completely done. The used home has been built for many years and everything is there for you to make a decision. The layout, exterior, rooms, kitchen, and the landscaping is there for you to look at and make a decision. With a new construction, sometimes you will have to use your imagination or base it on the plans of the house from drawings The homes on site can be in different stages of the building process, so sometimes you won’t have a finished product to look at.

2. Inspection

Your expectations of the inspection will have to be different for a used home versus a new home. In a used home, you will find issues that may come up from deferred maintenance such as an old water heater, the furnace not being serviced, or moss on the roof that needs to be cleaned. In a new construction, you won’t find these issues because the home is a new home so everything that was installed is new. What you may find is the caulking is required at certain places. Concrete needs to be filled at gaps. Handrails must be installed for safety. Bolts need to still be installed for the A/C unit outside. So, you will mostly find items that weren’t installed correctly or need to be installed. 

3. The Financing and Appraisal

In a new construction, you may be using the preferred lender or an in-house lender from the builder. A preferred lender is one that has partnered with the builder to offer incentives to work with them. An in-house lender is a company that the lender owns. A new construction might also be easier to get an appraisal that will come at value because more than likely there will be a home that sold recently in the development that will be similar or come very close to the home that you are buying. With a used home, it might be hard to find something similar to that if the home is unique and in a market with low inventory; finding a home that was sold recently in the neighborhood might be difficult.

When you’re buying a new construction home, some of the things you don’t have to worry about are the work orders that the appraiser will require. These items are often deferred maintenance such as roof issues, leaking water lines, missing handrails, and system and appliance issues.

4. The Negotiation

In a used home, you have sellers who have lived inside the home for many years, so when it comes to negotiation, there will be emotional factors involved. You can have a seller who has invested a lot of time into the home and feels like the home is worth more than the market price, so coming to an agreement on a price can be challenging. In a new construction, you are buying a home no one has never lived in before. You are negotiating with the builder and the only thing he cares about is the bottom line. 

5. Timing

The biggest thing about buying a new construction is timing. In a resale, the whole process can take 25 to 30 days. However, in a new construction, the process can take months if the home has not been built yet – 6 months or even longer if there are any delays. The builder has to get the permits, pour the foundation, and then there is framing, electrical, and plumbing work to be done, so the whole process might take up to 6 months. 

The New Home Building Process

The new home building process usually takes 4-6 months. The builder has to prepare the lot, get the permits, and then they can start building your home.

  1. Permitting Process: before building anything, the city or county needs to see the plans and drawings of what is being built. So permits had to be submitted, reviewed, and approved. 
  2. Grading and Site Preparation: preparing the site for construction, removing all structures that interfere with the footprint of the house
  3. Underground Utilities: here is how you will take showers, light the house, and get rid of waste; this is where the builder puts in the water and sewer lines, and electrical.
  4. Foundation Construction &. Concrete Slab: this is what your home will sit on safely for many years.
  5. Framing: This is where your new home begins to take shape. You can begin to see where the rooms, hallways, and bathrooms will be. 
  6. Exterior Windows and Doors
  7. Rough Plumbing, Electrical, HVAC: at this stage, the plumbing and electrical will be connected to the rooms and the underground utilities in step 2.
  8. Roofing
  9. Siding
  10. Insulation
  11. Drywall
  12. Under pavement for Wall Tile & Under Proofing
  13. Interior Doors, Baseboards & Trims
  14. Painting & Staining
  15. Bathrooms & Kitchen Counter & Cabinets
  16. Finish Plumbing
  17. Finish Electrical & HVAC
  18. Carpet & Flooring
  19. Hook up to Water and Sewer
  20. Punch List: The homeowner and builder walk through the house together to if there are any remaining details that need to be corrected or competed. 

Advantages of New Construction

1. Low Inventory Market

A lot of home buyers choose new construction because of the limited inventory that’s available. Used homes are only a finite amount and a lot of home buyers compete for these homes. By choosing a new construction home, the buyer has more choices available. 

2. You’re the 1st Owner

One of the pros of buying a new home is that no one else has lived in the home before. You are the first owner; you can know exactly how well it’s been taken care of as you will have been in it from the start. 

3. Energy Efficient

In a new construction home, the gas or electric bill will be much lower because your furnace will most likely be more efficient. Some builders will have tankless water heaters, which are more energy efficient and last longer than standard water heater tanks. In a used home, an old water heater tank lasts 7-10 years. Tankless water heaters can last up to 20-30 years. 

4. Less Maintenance Cost

Because you are buying a new home, the maintenance is going to be much less. You will still have yearly maintenance, but not as much as an older house.

Disadvantages New Construction

1. Upgrades Can be Pricey

When you are buying a new construction home, the base price is just the start. Some builders have standard upgrades in the price, and some start with the base price with nothing included. This means the base price doesn’t have the appliances, fixtures, and extra finishes. 

In a used home, the appliances, finishes, flooring, carpet, and systems has been built in for many years unless the seller has just renovated. But most of the time, there are no upgrades. If the appliances or systems are older, you might have to budget for new ones. In comparison with the new construction, you will have to pay for them from the start. 

2. Less Land

Land might not be important to you, but a new construction will have less land than a used home. A new construction lot size can be 3,000 to 5,000 square feet closer into the city and maybe more as you move away from the city. 

Looking for a Great Builder 

Here are a few signs that will let you know that you are working with a great builder. 

A great home builder cares about what you want in your new home. They will advise the best solution to your unique situation – not only the best layout for your home, but cost saving opportunities.

The builder is trustworthy and service oriented. They will ask questions that are important to you and your family. 

They have the experience and are knowledgeable. Especially in a fast moving market where homes are not available, it creates a lot of opportunity for newer builders to get into the business. You have to make sure the builder has a lot of happy customers they have helped over the years. 

Responsiveness is also a big factor when it comes to selecting a builder. The communication between you and the builder should be open. They should call you back in a timely manner. If they are too busy for your phone calls or don’t call you back, you should be concerned. 

A great builder will be focused on the details and the quality of the home. Look at the products that they will put into the home and the craftsmanship. The millwork should have no gaps and should have been cut with precision. They should be able to explain to you why they picked a certain product over another product. 

Being organized with systems and processes is also another big one. Over the years, we’ve seen builders who have changed three superintendents over a 7 month period and it has taken a year to close finish building a house. You have to make sure they have a good team in place who is effective scheduling of subcontractor to prevent delays. 

They are committed to you and the problems that your problems will have after you’ve moved into the home. A home builder will offer you a home warranty. What you should look for is a 1 year workmanship, 5 year mechanical, and 10 year structural warranty.

Personal Lender or Preferred Lender

When you’re buying a new home, you will likely face a most common challenge: whether to use your own lender or the preferred lender. 

Builder sales agents are there to represent the builder. You need your own representation. The builder’s agent is there to get the best price and terms for the builder. When you have decided to work with a buyer’s agent, the agent owes you fiduciary duties. That means they are required to disclose the details of a transaction, positives or negatives.

A great buyer’s agent understands the builder’s contract. Builders do not use standard Northwest Multiple Listing Service contracts. The contract can be 50 pages long. The agent understands the builders language and can explain to you on what you can expect when you are signing the contract. 

The builder has already agreed to pay the buyer’s agent when they list new homes. Make sure you have your agent  introduce you to the listing agent on site so that you will get full representation. 

Negotiating

The market you are in will determine your negotiation strategy. Builders tend to be very firm on the price in a seller’s market, and you might end up paying above list price. In a buyer’s market, builders are more willing to budge on the price with buyers. In a market with lots of buyers competing for new homes, don’t negotiate on price; negotiate on upgrades or some form of credit. They may offer certain upgrades or credit, or they may not, but it’s worth asking. Large discounts usually happen at the end of the year, so if time is on your side, this is when you can start putting things on paper.

Understanding the Builders Contract

Buying a new construction without fully understanding the builder’s Purchase & Sale Agreement can cause a lot of headaches down the road. If you fully understand the contract and know what to expect, the transaction will go a lot smoother.

When it comes to buying a used home, agents use standard forms published by the Multiple Listing Service. In our case, it is the Northwest Multiple Listing Service. The language in the contract is generally understood by the real estate industry. 

A builder’s addendum is there to protect the builder from legal issues that may come up. Their contract is written by lawyers hired by the builder. Anyone in business would do the same, to protect themselves from potential lawsuits. However, it is your job as a buyer to understand it, and the following are a couple of things to consider.

Status of Construction and Closing

First is the status of construction and closing. This is when your home will close and where your home is in the construction process. 

The home can be in several of the phases. For pre-construction phase and permit submittal, the builder has not started construction on the home. This means the home will take longer to build because the engineers have to submit designs to obtain permits. The county might come back with some request to be changed and the engineers needs time to make those changes. This might cause a delay in the building process. 

The home can also be under construction – but technically construction has not yet commenced. This means permits are issued through the completion of the foundation. So this is good news because the county has approved for home to be built up to the foundation. They have approved the grading, site preparation, and the foundation.

The next stage is under construction. The lumber has been dropped off and construction can be done up to the sheetrock. 

Finally, substantially completed, the hard surfaces and finishes will be installed. 

Choice Selection

Most of the time choice selections has to be made at a certain time so that the builder starts on construction based on your selections. Generally they are done a week to two weeks after you have mutual acceptance. So, within a week or two, you will meet with the design consultant to go over choices that you have with the standard options and also the upgrades if you decide to go with the upgrades.

Changing Lenders

Within some contracts, you might not be able to change lenders without the seller’s permission. Once you have applied with the preferred lender and have been approved, you have waived your financing contingency andmay not go with another lender to apply for a loan. 

Inspections

The home inspection will let you know if you’re buying a safe home and if it was built correctly. People tend to think that if it’s not an old house, then an inspection is not needed. That assumption is wrong because a new home can also have issues. In a seller’s market, you will find builders who rush through the building process, so you want to have the home inspector take a second look.

If you are planning to do an inspection of the home, the builder only allows a certain time frame to schedule an inspection respond back to the seller. For example, if the contract says you have 10 days prior to closing to do an inspection, you must get the inspection done within this timeframe and respond back to the seller.

Accessing the Property Prior Closing

It can be an exciting time for you when you’re buying a new construction. You’re probably wondering how they’re building your home and you want to check up on it as often as possible. However, this can be dangerous because you can get hurt or injured at the construction site. 

Most builders will not allow children under the age of 16 or no family members at all at any time during the construction process. You will have to make appointments with the community sales consultant before visiting the site. If the project job superintendent or the listing agent thinks it is not safe for you to visit the property, they might deny your request at any time.

Move-In Day

The home is finally yours. However, your new home requires attention and care. The materials that went into the house will require checkups, and that could be monthly or annually. For example, the roof needs to be checked for moss build up. The siding needs to be pressure washed to prevent organic materials from growing. The HVAC system is to be serviced by a technician every year. Specific warranty policies will only pay for repair and replacement if the homeowner did regular maintenance. Finally, you’ve made it. Enjoy your home!

Builders Loved by Many

Mainvue Homes

Mainvue Homes are one of the builders that people buy homes from and are very satisfied with the homes, as they typically remain in them long-term. I think what home buyers love about Mainvue is the facades, modern luxury features, and simplicity of the process when it comes to buying a home. They have gourmet kitchens with European inspired cabinetry. In the Emerson Design, you can find custom styles, painted glass backsplashes, and supersized islands. In the Hudson, you can find oversized windows and designer lighting.

American Classic Homes

This builder has been building homes for over 20 years all over Seattle, offering feng shui and vastu floor plans multigenerational in-law suites. The company and partners are very involved in the home building process to make sure their clients are highly satisfied. In 2015, 2016, and 2017, they have been awarded the highest distinction in customer satisfaction.

I think what you are going to find when visiting their homes is how spacious and open their floor plans are. The spaces are still separated, but everything just feels connected. I think this is because the lower level of their plans have10 foot ceilings. They have 26 floor plans for you to choose from, ranging from 2,500 to 4,500 square feet.

In some of the plans, they have curved stairways which you don’t find with any other builder except high-end custom home builders.

Pulte Homes

Pulte home are life tested, and design features are inspired by actual homeowner feedback to create the best livability.

Everyday entry, a space that keeps the family organized, has room to store bags, boots, and jackets when you arrive. In the Pulte Planning Center, check emails, pay bills, or this can be a place for your kids to do their homework. The owner’s retreat is a multi-functional space where you can go get some peace and quiet. Then there is the Garage Plus, which is designed for larger cars and storage.