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5 Things You Should Know About New Home Construction

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How to Finance

Financing new construction is something that the builder doesn’t do. Most builders refer to banks where they are a preferred builder. This makes the financing a stream-lined, transparent, and easy process. The first step in financing is an instant pre-approval. Most lenders offer this service on their website. Don’t have a lender? Ask the builder. They can give you a list of local banks that offer construction loans for building.

Building Location Covenants

It’s important to review the covenants where you wish to build. Certain building requirements and exterior upgrades that are required by default can increase the price of your new home. The first step in choosing a location to build in is reviewing building covenants and requirements. Contact the builder about their recommendations for subdivisions to build in, especially if you are unfamiliar with the area.

Buying a Showcase Home vs. Building Your Own

Building your own home will allow you to choose your amenities from the beginning and put the money where it is most important to you.
The best part of purchasing a showcase home is the move-in ready luxury that is provides. A fully upgraded move-in ready new construction home can be ideal for those looking to buy without the time to build, or clients that simply don’t want to go through the building process.

Not All Standards are Created Equal

Building standards vary with different builders. Consider scheduling a consultation with the builder to eliminate any confusion as to what is an upgrade and what is included. Some builders have showrooms, and can offer you a preview of your selections at the “base price”.

DIY & Custom Homeplans

Keep in mind that because most builders have a new home warranty, they can’t allow clients to do their own cement, electrical, or work inside the home during construction of their home. Voiding a warranty based on external trades/DIY is not recommended, and therefor most builders do not allow it.

Some builders will review your custom home plan to make suggestions and can roughly estimate what it would cost to include the builder’s standards. Any selections or amenities not included in the builder’s standards are considered an upgrade. Most builders will not “bid out” a job unless they are under contract with a client, so make sure you have financing out of the way and a budget number in mind when considering your own plan.

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