5 Tips For Buying A New Build Home

The lack of existing inventory for sale has forced many home buyers to begin looking at new construction. When you buy a newly constructed home instead of an existing home, there are many extra steps that must take place.

Please keep in mind that the tips below are primarily for a production builder, like MI Homes, Rockford, Pulte, Westport, Ryan and so forth.

There is a big difference between a custom build home, a semi-custom build home and a production (track) built home. 

Financing for a production build home is carried by the builder wile a custom and semi-custom builder will require you to get your own financing. Lenders typically require 10% down of the cost of the lot and home combined, up front to begin the build process. 

Most home buyers have to either do a bridge loan or sell their current home to have enough cash up front for their down payment. 

Type of Builders

  • Semi-Custom Builder

A semi-custom builder will have their own floor plans that you must choose from, but they will most likely be able to make some changes for you during the "Pre-Construction" meeting. Any changes after that most likely will not be possible. Make sure you check their reviews on line before signing any contracts as well.

A semi-custom builder will handle financing the same way a custom builder will. You will have to take out a construction loan to build with a custom and a semi-custom builder. This means you will be making payments during the build phase, before the home is even done. The payments will be based on the amount of money borrowed up to that point in time. 


There are usually 4-5 draws (money pulled out of your loan) during the build process. It depends on the lender you use for this.  

  • Custom Builder

A custom builder will want you to have your floor plan ideas in mind before meeting with you. They may or may not have floor plans you can choose, but they will require you to meet with an architect and have final blue prints for the home drawn up prior to beginning to build. 

To ensure a hassle-free process, here are 5 tips to keep in mind if you are considering new construction:

1. Hire an Inspector

Despite the fact that builders must comply with town and city regulations, a home inspector will have your best interests in mind! When buying new construction, you will have between 1-3 inspections, depending on your preference (the foundation inspection, the pre-drywall inspection, and a final inspection).

These inspections are important because the inspector will often notice something that the builder missed. If possible, attend the inspection so that you can ask questions about your new home and make sure the builder fixes any problems found by the inspector.

However, after the build is completed and before you close, make sure you have your home inspector do a whole home inspection on your new home. Make sure the inspector is a new build home certified inspector as well. We can recommend a few if you need one.  

2. Maintain good communication with your builder

Starting with the pre-construction meeting (where you will go over all the details of your home with your project manager), establish a line of communication. For example, will the builder email you every Friday with progress updates? If you are an out-of-state buyer, will you receive weekly pictures of the progress via email? Can you call the builder and if so, how often? How often can you visit the site?

3. Look for builder’s incentives

The good thing about buying a new home is that you can add the counter top you need, the mudroom you want, or an extra porch off the back of your home! However, there is always a price for such additions, and they add up quickly!

Some builders offer incentives that can help reduce the amount you spend on your home. Do your homework and see what sort of incentives the builders in your area are offering.

4. Schedule extra time into the process

There are many things that can impact the progress on your home. One of these things is the weather, especially if you are building in the fall and winter. Rain can delay the pouring of a foundation as well as other necessary steps at the beginning of construction, while snow can freeze pipes and slow your timeline.

Most builders already have a one-to-two-week buffer added into their timelines, but if you are also in the process of selling your current home, you must keep that in mind! Nobody wants to be between homes for a couple of weeks.

5. Visit the site often

As we mentioned earlier, be sure to schedule time with your project manager at least once a week to see the progress on your home. It’s easy for someone who is not there all the time to notice little details that the builder may have forgotten or overlooked. Additionally, don’t forget to take pictures! You might need them later to see exactly where that pipe is or where those electrical connections are once they’re covered up with drywall!

Bottom Line

Watching your home come to life is a wonderful experience that can sometimes come with hassles. To avoid some of these headaches, keep these tips in mind!

If you are ready to put your current home on the market and find out what new construction is available in your area, let’s get together to discuss your options!