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New Construction - Starting from Scratch - Phase 1

January 22nd, 2020

It's a beautiful Saturday, no plans on the calendar, you go out for lunch, start up a deep conversation about possibly buying a home in the future, and the next thing you know one hour later you end up in a model home face to face with a sales person.  It's happened to most of us, and without those gorgeous homes that are decorated like Joanna Gaines herself, then half of us wouldn't have purchased a new construction home.  Hey, it happened to me!! My husband did not want new construction.  He loves to do projects and is the total "fixer upper" type.  He wanted a larger lot, which is really hard to come by in new construction communities.  But alas here we are, having lived the last 3 years in our "built from scratch" new construction home! And we would do it again!

So step one is you land yourself in a sales office.  You will have no pre-approval more than likely, because you were just out on a casual Saturday drive.  But if you are prepared and ready to go in for the kill... this is a must.  You will tour the model homes, and fall in love.  Then, the sales person will drive you around to look at lots.  They will tell you the lots are going fast, and if you don't sign a contract today you will probably be left with the lot that backs up to the new gas station.  They will also show you some of their inventory homes that will be ready to close on soon.  This option may be good for those that are looking to move quickly, and you can usually negotiate quite a bit to get them to come down.  More than likely they will tell you if you use their in house lender than you will get an amazing kickback.  If they ask if you are using a realtor, say yes and call me (wink, wink)....Or a realtor you trust if you aren't in the Houston area!  Realtors are free for you to use, and can only aid in the entire process.  We look over the contract (which can be well over 50 pages for new construction), keep on top of the deadlines for you, and make sure they aren't taking you to the cleaners.

If you decide to build from the ground up, and are not buying an inventory home, then you will start the process of picking your home elevation, lot, and design choices.  You will get a list of everything that is included, and then a list of everything that isn't included.  You will be shocked at what isn't included and wonder if you can afford something remotely similar to the model home you fell in love with.  You will want to walk away, but wait!  The sales person will give you design incentives, and they will start throwing more in so you don't run away.  For example with my home, I picked the Armstrong model ($270k ish for base) , then we paid extra for a large lot ($10K), then they gave us $35K incentive to spend on design upgrades.  That goes rather quickly when you are talking about putting in a decorative metal staircase, granite, raising the ceiling to look like the model, backsplash, upgraded tile ect.  So my advice would be to walk out with the print out of the design options before signing on any contract, and go home and really make a list of what you would want.  Visit at least 3-4 other builders and compare their design upgrade sheet.   Compare what you are getting with each home, and also make a pros and cons sheet of the neighorhood.  What is the tax rate, what are the HOA dues, how close are the schools?  Is the lot backing up to woods?  Who owns that land?  Even if the builder says they own it and it will be another section in the future.... what size lots are planned back there? What is the warranty for each builder?  What are the neighborhood amenities? What plans do they have for flood control? Is landscaping included? Do some research.  A lot of research.  

You also may wish to speak to a realtor about selling your current home, short term rentals until the new build is ready, or any other needs that you have.  

Next step is to actually go in and sign the contract and negotiate.  Sometime before this you will have your pre-approval done.  After the contract is signed and executed, then they will set you up with the design center to schedule an appointment and that is where the fun begins!  

The process does go by pretty fast.  You will enjoy seeing your home built before your eyes during those 5-6 months. And even before you make it to your design appointment, your foundation will already be getting prepared and ready to build!

Congrats!  And don't forget to let a Realtor help you along in the process....two sets of eyes are always better than one!  

Read my next blog post (this week) on the design process.... Phase 2! And the final blog will cover inspections, closing, and your first year in your new home!

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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®

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