As more and more home sellers list their homes for sale they inevitably find that the inventory of homes is somewhat lacking. Naturally, they turn to new construction homes. Unfortunately, these homes are often a little bit smaller, with smaller yards and at a premiums price. Thankfully, we’re here to give you 7 Ways To Save Money on New Home Construction.
6 Ways To Save Money on New Home Construction
Here are seven tips in which you can save money on new construction:
1. Call a Real Estate Agent
An experienced real estate agent can save you big bucks. Many individuals who buy new construction for the first time usually don’t use an agent and end up losing a lot of money. This is one big mistake home buyers make! Most don’t realize that the agent’s commission is built into the price. When they forego the agent, the builder keeps that profit.
At worst you helped an agent earn a living and gained a friend. At best the real estate agent can hold the builder accountable and save you THOUSANDS! Oh, any good agent is going to tell you to get an inspection on that new home.
It is always recommended to use a real estate agent if you are planning to buy a new home since he or she is well informed about the future expenses which you may have never heard of. Ask your friends or family members living in your city about their real estate agents.
2. Avoid The Word “Custom”
Builders can personalize your floor plan as well as get the rooms shaped according to your needs. Many builders have “standard” things they do. It cost them less to do these things because they are essentially buying in bulk. When you ask for custom work you aren’t going to get a deal, in fact, you’ll likely pay a premium vs waiting until you move in and then doing the work.
The only benefit of doing custom work aside from convenience is that you can finance the cost into the loan.
3. Buy New Construction Off Season (aka Winter)
The time of the year is also important to consider while making the purchase. Houses move fast during spring and summer as people move to new places before the school year starts. The high demand doesn’t end until fall. Buying a home in winters can save you thousands of dollars since sellers are willing to negotiate and many household appliances are also on sale during this period.
If you are planning to upgrade or get that custom work done, you will get an affordable quote. Construction companies and vendors have more free time in hands, so they will get the work done in less time. Move by spring, when the temperature gets more bearable.
4. Research The Loan
The new construction builder wants you to use their lender. Often, however, there are hidden fees to using their lender. You can combat this by keeping them honest with a 2nd opinion. Keep around 3-4 different mortgage companies as options in order to find the one which charges the least interest and other fees including loan processing charges and loan origination fee.
5. Buy Spec
Homes that are built without a buyer’s request are called “Spec Homes.” Sometimes these homes are the model home and other times it’s just inventory. New construction builders and would be home buyers agree on this point. If a builder is selling a home that is partially or totally finished, they stand to lose money. If you buy a spec home you can move right in. Many individuals choose to go for a move-in ready home because a lot of time is saved.
6. Save money for a down payment
This tip will save you money no matter what you buy and no matter where. If you’re buying a home for sale in Boise Idaho or a home in Davenport, FL, it’s the same advice.
It is advisable to save money for the down payment of the house beforehand to avoid delays in the end when you have almost finalized on the deal. The down payment covers Private Mortgage Insurance (PMI), which is the insurance on the mortgage. This helps the lenders to get the amount reimbursed to them in case the borrower is unable to pay.