When the housing bubble burst in 2008, homes were constantly being built. This oversupply of newly built homes, which were hardly purchased, left builders losing millions. The industry has since learned from this experience. Now, it is motivated to sell properties before building more, lessening its inventory surplus. To do so, many builders have resorted to offering buyer incentives, a great win for the average customer.
Newly Built Incentives
When considering the options between purchasing an existing and a newly built home, pay particular attention to the incentives offered. Builders understand that with high costs and economic uncertainty, potential buyers are more selective than usual. With this in mind, the most common incentive is offering to pay a portion of the closing costs or buying down the interest rate on the home’s loan. Focused on cutting the financial costs for buyers, builders may also extend interest rate locks, allowing buyers to lock in today’s interest rate, and safeguarding them against future rate increases.
Things to Consider for a Newly Built Home
There are multiple ways to purchase a newly built, including directly from the buyer or through an assignment sale, securing the new build contract from the original buyer before moving in. Sometimes referred to as preconstruction, these homes are available for purchase once builders release the lot or property to the public.
Most of these model homes are equipped with new appliances, roofing and modern styling, requiring less maintenance and being more energy-efficient. These homeowners may also see a reduction in energy costs, as most states, like California, are enacting laws whereby all new builds must have the latest technology installed. Depending on when you purchase the property, there may be some wiggle room to customize. The most common options for customization are cabinet colors and kitchen countertops.
One thing that may be harder to negotiate is the price. With most newly built homes, the listing price is usually for the standard model and any add-ons come at an expense. In some cases, the builder may offer “free” upgrades, incorporating them into the final sale instead of lowering the price. The payment schedule will also differ from a resale home. In most cases, these properties require the potential buyer to have a 20% deposit of the purchase price. In the long run, it will be beneficial as these homes appreciate value faster than a property that has amassed multiple owners.
Think you Want to Buy?
Newly built’s are enticing with their new gadgets and overall appeal of being fresh. With insights into the latest new construction, trust the NMC Realty Group to help you find exactly what you’re looking for and share their knowledge every step.