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Buying a brand-new home is different from buying someone else's old home. Everything should work perfectly. The appliances shine. The floors haven't been walked on by people for years. The paint doesn't show any marks from moving furniture. Take a deep breath and think about what really matters in your search for a home.
The U.S. Census Bureau and the Department of Housing and Urban Development say that sales of new single-family homes rose 20.5% in August 2025, reaching a seasonally adjusted annual rate of 800,000 units. This was the highest level since January 2022. Builder incentives, especially mortgage rate buydowns, were a big part of this rise. Builders were competing for buyers in a market that was still getting used to higher interest rates.
This means that you have more choices, more power to negotiate, and builders are actively trying to win your business. In the middle of 2025, new construction made up about 14% of all home sales in the US. This gave buyers who were tired of bidding wars on existing homes real options.
However, the process is different from buying a home that is already built. Knowing about these differences will help you avoid surprises, plan your budget well, and make decisions with confidence as you go along.
A new construction home has never been occupied. Nobody cooked meals in that kitchen. No family celebrated holidays in that living room. The property represents a blank canvas waiting for your story to begin.
Developers typically build these homes in planned communities or developments, designing properties they believe will appeal to buyers. This speculative approach, where builders construct homes based on market research and trends rather than individual buyer requests, dominates the new construction market.
Most developments feature a few base models, repeated throughout the community with variations in exterior colors, interior finishes, or lot placement. Walk through a new neighborhood and you'll notice similarities between homes, though each might have unique touches based on upgrade selections or lot characteristics.
The median sales price of new homes reached $413,500 in August 2025, according to Census Bureau data. This represented a 4.7 percent increase from July 2025's price of $395,100. Compare this to existing home prices: the National Association of REALTORS® reported a median existing-home price of $415,200 in October 2025, showing new and existing home prices running nearly parallel for the first time in years.
Two distinct categories exist within new construction: spec homes and custom builds.
Spec homes, built according to the developer's specifications, typically reach completion or near-completion before buyers enter the picture. The builder selected the floor plan, chose the fixtures, determined the lot placement, and made most major decisions. Your role involves choosing from available inventory, potentially selecting final finishes if you purchase early enough, and moving in relatively quickly.
Custom homes flip this dynamic entirely. You participate in design decisions, influence floor plans, select materials, and create something truly unique. This personalization requires significantly more time. Custom construction timelines average 10 to 16 months according to National Association of Home Builders data, while spec homes often complete in 6 to 7 months from permit to occupancy.
Think of it like this: spec homes resemble buying a car from dealer inventory, while custom builds mirror ordering a vehicle built to your exact specifications. Each approach offers distinct advantages depending on your timeline, budget, and desire for personalization.
New home prices fluctuated throughout 2025, influenced by materials costs, labor availability, and interest rate movements. The median price dropped 2.9 percent year-over-year in June 2025 to $401,800, but recovered to $413,500 by August 2025, demonstrating market volatility.
Regional variations matter significantly. According to Census Bureau regional breakdowns, the South completed homes in an average of 7.1 months during 2018, maintaining the fastest completion times nationally. The Northeast required 10.2 months on average, reflecting different weather patterns, labor markets, and building seasons.
Realtor.com data from Q2 2025 showed median listing prices for new homes around $450,000, while existing homes listed at approximately $418,000. Builder discounts and incentives closed much of this gap at final sale prices, making new construction increasingly competitive with resale properties.
The inventory of unsold new homes stood at 490,000 units in August 2025, equivalent to 7.4 months of supply at the current sales pace. This represented a decrease from earlier in 2025 when inventory exceeded 9 months of supply, suggesting stronger buyer demand absorbing available properties.
Before touring model homes or falling in love with granite countertops, establish your financial foundation. New construction purchases require the same financial preparation as existing home purchases, but with some unique considerations.
The type of loan you get will determine how much you need to put down, not whether the home is new or used. For first-time home buyers who qualify, conventional loans only need 3% down. You can put down 3.5 percent on an FHA loan. VA and USDA loans let eligible buyers borrow money without having to put any money down.
One benefit of buying a new home is that some builders offer incentives to help with the down payment. Depending on the builder and the state of the market, these programs may include help with your down payment, credits for closing costs, or upgrades that are included in the purchase price.
Spec homes that are complete or nearly complete qualify for standard mortgage financing. You'll use a conventional, FHA, VA, or other traditional mortgage loan, just as you would for an existing property.
Custom builds require more complex financing structures. Construction-to-permanent loans combine construction financing with permanent mortgage financing in one transaction. The lender disburses funds incrementally as construction milestones complete, converting to a standard mortgage once construction finishes.
Many lenders, including larger institutions, don't offer construction loans for custom builds. This limits your options and may require seeking specialized construction lenders. The application process involves more scrutiny, as lenders evaluate both your creditworthiness and the builder's track record and financial stability.
There are some costs that come with buying a new home that don't come with buying an existing home. Landscaping is rarely finished all at once. Most of the time, builders will grade the land and plant grass or seeds in the front yard. The buyer is responsible for the backyard and any extra landscaping.
Most new homes don't come with window treatments. Plan to spend a few thousand dollars on curtains or blinds for your whole house. Builders put up bare walls and let you choose and install window coverings.
Many new neighborhoods have homeowners associations that charge monthly or yearly dues. These fees pay for things like community amenities, maintenance of common areas, and architectural review boards. In new construction communities, HOA fees usually range from $200 to $400 a month in suburban areas. Luxury communities, on the other hand, may charge $600 or more.
Buyers may be surprised by the property taxes on new homes. Tax assessments are often a year or more behind the real value of a home. The value of the empty land may be used to calculate your first tax bill instead of the value of the finished home. Once the assessor records the higher property value, you can expect your property tax bill to go up a lot in the second or third year of ownership.
Costs of moving add up fast. Moving a typical three-bedroom home across town costs between $1,500 and $3,000, while moving across the country costs between $5,000 and $10,000. It costs less to rent a truck and do the move yourself, but it takes time, effort, and planning.
Not all builders operate with the same standards, timelines, or business practices. Research before committing protects you from potential problems.
Start online. Search the builder's name combined with "complaints," "reviews," or "problems." Check the Better Business Bureau for complaints and resolution patterns. Visit the builder's profile on sites like HomeAdvisor or Angie's List if they're listed.
State licensing boards maintain records of builder licenses, disciplinary actions, and complaints. Most states provide online databases where you can verify a builder's license status and review any enforcement actions.
Talk to recent buyers. Visit completed sections of the development and knock on doors. Most homeowners happily share their experiences, good or bad. Ask about construction quality, timeline accuracy, responsiveness to warranty issues, and overall satisfaction.
Drive through the builder's other developments in your area. Look for signs of quality in completed homes. Do the properties age well? Is the development well-maintained? Are homes selling and owners staying, or do you see frequent turnover suggesting buyer dissatisfaction?
New construction typically includes warranties protecting against defects in materials and workmanship. These warranties vary by builder but often follow a 1-2-10 structure: one year for workmanship and materials, two years for major systems like HVAC, plumbing, and electrical, and 10 years for structural defects.
Read warranty documents carefully before signing anything. Understand what's covered, what's excluded, and your responsibilities for maintaining coverage. Some warranties require specific maintenance schedules or exclude coverage if you fail to report issues within specified timeframes.
Many builders purchase third-party warranties through companies like HOW Warranty or Builders Homesite. These provide an additional layer of protection if the builder goes out of business or disputes a claim. Third-party warranties generally offer more robust protection than builder-direct warranties alone.
New construction developments typically feature model homes showcasing the builder's floor plans and upgrade options. These models look spectacular, professionally decorated and featuring premium upgrades that inflate the base price significantly.
Model homes serve as sales tools. Builders stage them beautifully, with custom window treatments, upgraded appliances, premium flooring, and designer touches that won't come standard. That gorgeous kitchen backsplash? Probably a $3,000 upgrade. The spa-like master bathroom fixtures? Another $5,000 in upgrades.
Ask for a base-price spec sheet showing what actually comes standard. The difference between the model's appearance and the base-price reality often shocks buyers. That $350,000 model home might actually start at $290,000 before adding the visible upgrades.
Pay attention to lot placement. Corner lots offer more yard space and fewer immediate neighbors but might experience more traffic noise. Interior lots provide more privacy and typically cost less. Cul-de-sac lots command premiums for limited traffic and curved setbacks that create larger perceived yards.
Floor plans matter more than decorating. Can you visualize your furniture in the space? Does the layout accommodate your lifestyle? Families with young children might prioritize bedrooms clustered together, while empty-nesters might prefer a split bedroom layout offering privacy.
Before making a choice, go to at least three different builders. This comparison shows which features are standard and which are upgrades, how prices compare for homes with the same square footage, and which builders offer the best deals.
Make a standardized comparison sheet that lists the features that are important to you. Include things like wall insulation R-values, window energy ratings, HVAC efficiency ratings, and appliance brands to show how well the building was built. Look at the length and coverage of the warranties. Compare the features that come with the product to the ones that cost extra.
The timeline is important. Find out what each builder's current construction schedule is. Some may take four months to deliver, while others may take eight months. The builder that works best for you depends on when you need to move in.
New construction purchases work best when you arrive prequalified or preapproved for financing. Builders and their sales agents take prequalified buyers significantly more seriously than shoppers without financing verification.
Prequalification provides a quick estimate of how much you might borrow based on self-reported income, assets, and credit information. Lenders issue prequalification letters quickly, usually within hours, but they carry less weight because they're based on your representations rather than verified information.
Preapproval involves full application submission, credit report review, income and asset verification, and preliminary underwriting. Lenders review your tax returns, pay stubs, bank statements, and credit profile. The resulting preapproval letter demonstrates serious buyer status and accurate borrowing capacity.
Some builders require preapproval letters before accepting offers, particularly in competitive markets or for popular floor plans. Having this documentation ready accelerates your timeline and strengthens your negotiating position.
Many builders maintain preferred lender relationships, often offering incentives for using their recommended financing partners. These incentives might include closing cost credits, rate discounts, or upgrade packages.
You're never obligated to use the builder's preferred lender. Federal law protects your right to choose your own financing, and builders can't require you to use their lender as a purchase condition. However, the incentives offered sometimes create genuine value worth considering.
Compare carefully. Get loan estimates from both the builder's preferred lender and at least two other mortgage lenders. Look beyond interest rates to closing costs, lender fees, and total estimated cash to close. Sometimes the builder's incentives exceed any rate or fee advantages available elsewhere.
Making offers on new homes is different from buying existing homes. You're dealing with a professional builder or their sales representative instead of an individual homeowner, which changes the situation a lot.
In strong markets, builders usually stick to their standard floor plans and keep their base prices pretty stable. The price that is listed for a certain model may not be very negotiable. But that doesn't mean there isn't room for negotiation.
Instead of lowering the base price, look for upgrades, incentives, and closing costs that are flexible. Builders may not want to lower the list price by $10,000, but they will gladly give you $10,000 in free upgrades or credits toward closing costs. It has the same effect on your finances, but it keeps their published pricing structure.
Timing is very important. Builders who have to meet sales goals at the end of the quarter might be more willing to negotiate than they are during times of strong sales. Inventory homes that have already been built are a cost for builders to keep. These properties are often easier to negotiate with than homes that haven't been built yet.
Builder incentives dominated the 2025 new construction market. According to National Association of Home Builders data, 61 percent of builders offered sales incentives in May 2025, with mortgage rate buydowns emerging as the most desired and effective incentive available.
Mortgage rate buydowns involve the builder prepaying interest difference between market rates and reduced rates they offer buyers. A builder might advertise 5.5 percent financing when market rates sit at 6.75 percent. The builder pays the lender the present value of that 1.25 percent interest difference over the loan term.
Buydowns come in two flavors: permanent and temporary. Permanent buydowns reduce your rate for the loan's entire duration. Temporary buydowns, often structured as 2-1 or 1-0 buydowns, provide reduced rates for the first one to three years before adjusting to market rates.
Ask explicitly what incentives the builder currently offers. These change frequently based on market conditions and sales pace. Incentives might include:
Closing cost credits covering 2 to 3 percent of the purchase price
Free upgrades from a specified dollar amount or options list
Rate buydowns reducing your mortgage interest rate
HOA fee credits covering the first year's dues
Appliance packages or smart home technology installations
One advantage of new construction is knowing when you'll move in, at least theoretically. Builders provide estimated completion dates, though various factors can extend timelines.
There is a set order for building a new home, but how long it takes depends on the size, complexity, and location of the home.
2 to 4 weeks to get the site ready and lay the foundation. The crews clean up the lot, dig the foundation, put in footings, and pour concrete. It takes time for the foundation to cure, and there shouldn't be any work going on.
Framing: 3 to 5 weeks. The skeleton of the house goes up quickly after framing starts. In a few weeks, the walls, roof trusses, and other parts of the structure will be up.
It takes 2 to 3 weeks to do mechanical rough-ins. Electricians, plumbers, and HVAC contractors run wires, pipes, and ducts before the walls go up.
Finish the outside in two to four weeks. The weather can't get in through the windows, doors, siding, or roof, so work can go on inside no matter what.
Two to three weeks for the insulation and drywall. The insulation goes in and the drywall goes up on the walls and ceilings inside after the mechanicals pass inspection.
It will take 4 to 8 weeks to finish the inside. The painting, flooring, cabinets, countertops, fixtures, and trim work are all done on the inside of the house. This step usually takes the longest because people from different trades have to work together.
It takes one to two weeks for walk-throughs and final inspections. Before homeowners walk through, building departments check the work that has been done, and builders do final quality checks.
Surveys from 2025 showed that it took an average of 7.2 to 8.1 months for spec homes to go from getting a building permit to being finished. This time was different in each area because of things like the weather, how many workers were available, and how quickly permits were given out.
The weather has a big impact on when construction can start. Heavy rain makes it harder to work on the foundation and the outside. Snow and cold weather stop concrete work and make it take longer for people who work outside to get things done. One reason why projects in the South finish faster than in the Northeast is that the South has a building season all year round, while the Northeast has bad weather that slows down building.
In 2024 and 2025, construction schedules were messed up from time to time because materials weren't always available. Some items, like windows, appliances, or special materials, could be on backorder for weeks or even months. Builders usually have better relationships with suppliers and can get things to you faster than individual contractors, but shortages still slow things down.
It can take a long time for a city or town to approve a permit. Some places can issue permits in as little as three days. It can take months for some plans to be looked over and approved. It takes longer to get permits for custom homes than for spec homes that are built from plans that have already been approved.
It takes longer to make changes during construction. If you want to change the original plans, builders need time to figure out how much it will cost, order the materials, and change their schedule. Some changes need new permits, which can make your timeline longer by weeks.
There weren't enough people working in construction in 2025. There was still a lot of demand for skilled electricians, plumbers, and framing crews. Sometimes builders hire less experienced crews while they wait for their favorite subcontractors to finish other jobs. This could make your project take longer, but it might also make it better.
New construction doesn't require the same inspection approach as existing homes, but inspections remain valuable and important.
If you buy a home before or during construction, you might want to hire an independent inspector to check it out at important stages. Important places to check are:
Check the foundation after pouring but before framing. Inspectors make sure that the rebar is in the right place, the concrete is of good quality, and the foundation dimensions match the plans.
Checking the framing before closing the walls. This shows how to frame correctly, how to make sure the structure is strong, and how to install headers, joists, and load-bearing elements correctly.
Check the mechanical rough-in before putting up the drywall. Check that the HVAC system is the right size and installed correctly, that the plumbing slope and venting are correct, and that the electrical wiring meets code.
Building inspectors from the city look at these same things, but they are more concerned with following the rules than with quality or the best practices in the industry. An independent inspector works for you, not the city, and they often find problems that building inspectors miss or ignore even though they aren't the best.
Before closing, conduct a detailed final walk-through with the builder. Bring a checklist and examine every room, fixture, and finish. Common issues to check:
Paint quality, looking for drips, thin coverage, or missed spots
Flooring installation, checking for gaps, squeaks, or damage
Cabinet operation, ensuring doors close properly and drawers glide smoothly
Plumbing function, testing every faucet, toilet, and drain
Electrical function, testing every switch, outlet, and light fixture
Window and door operation, ensuring smooth operation and proper sealing
HVAC performance, verifying heating and cooling in every room
Exterior finishes, checking siding, trim, and any visible defects
Create a punch list documenting every issue requiring attention. Builders expect some punch-list items and typically address them before or shortly after closing. Get written confirmation of the timeline for completing punch-list work.
Closing on new construction follows similar procedures to existing home purchases, with a few unique elements.
Your lender performs a final review of your financial situation immediately before closing. This includes re-verifying employment, reviewing recent credit activity, and confirming no major financial changes occurred since your preapproval.
Avoid major purchases before closing. Don't buy new cars, open new credit cards, or change jobs. These activities might affect your debt-to-income ratio or raise lender concerns, potentially delaying or derailing your closing.
The lender orders a final appraisal confirming the completed home's value supports the loan amount. New construction appraisals typically come in at or above purchase price, as comparable sales of nearby new homes inform the appraisal value.
Title companies ensure clear ownership transfer and identify any liens or encumbrances on the property. New construction usually presents few title issues since the builder typically owned the land outright or held clear title.
Purchase owner's title insurance even though new construction seems low-risk for title defects. Policies cost a few hundred dollars and protect against potential issues like construction liens, survey errors, or recording mistakes.
Obtain homeowners insurance before closing. Lenders require proof of insurance showing coverage beginning on your closing date. Shop multiple insurers for competitive rates. New construction often qualifies for discounted insurance rates due to updated building codes, newer systems, and reduced risk of damage.
Closing costs on new construction typically range from 2 to 5 percent of the purchase price, similar to existing home purchases. Specific costs include:
Lender fees covering origination, underwriting, and processing
Title insurance and closing services
Appraisal fees
Credit report fees
Recording fees for deed and mortgage registration
Prepaid property taxes and insurance
HOA transfer fees if applicable
Some builders offer closing cost credits as sales incentives, reducing your out-of-pocket expenses at closing. Factor these credits into your total cost comparison when evaluating different builders.
New homes come with warranty protection, but understanding coverage details prevents disappointment when issues arise.
Most builders offer tiered warranties that follow industry standards:
In the first year, the warranty covers defects in the work and materials used throughout the home. The builder fixes any problems with the drywall, paint, or trim that comes off for free.
The first two years cover the main systems, such as plumbing, heating, and cooling. If your furnace breaks down or your plumbing starts leaking during this time, the repairs are covered by the warranty.
Years one through ten cover structural problems that affect the home's stability. During this long time, problems with the roof structure, the foundation settling, or the framing getting too big are all covered.
Know that normal wear and tear, maintenance, and damage caused by the homeowner are not covered by the warranty. You are responsible for fixing any paint damage or broken tiles that happen while you move furniture.
Take photos and videos during your final walk-through and immediately after moving in. This documentation proves condition at occupancy and supports warranty claims if issues arise later.
Report warranty issues promptly in writing. Most warranties require notification within specific timeframes. Missing these deadlines might void your coverage for that particular issue.
Keep records of all warranty claims, communications with the builder, and repair work performed. If disputes arise, this documentation proves invaluable.
Some states require builders to maintain warranty bonds or participate in state-sponsored warranty programs. These protections help homeowners if builders fail to honor warranties or go out of business.
New construction offers unique advantages for long-term homeownership planning.
New homes require less immediate maintenance than older properties, but establishing good habits from day one protects your investment. Create a maintenance calendar tracking:
HVAC filter changes every 1 to 3 months
Annual HVAC professional service
Seasonal gutter cleaning
Water heater flushing annually
Smoke and carbon monoxide detector testing monthly
Caulk inspection around windows and doors annually
Landscaping irrigation system winterization in cold climates
Builders often provide homeowner manuals listing specific maintenance requirements and schedules for installed systems and materials. Following these recommendations maintains warranty coverage and prevents issues from developing.
New homes typically appreciate steadily over the first decade of ownership, though appreciation rates vary dramatically by location and market conditions. According to Realtor.com analysis, newer homes sometimes appreciate faster than older properties due to:
Modern energy efficiency reducing utility costs and appealing to buyers
Updated floor plans matching current preferences
Lower maintenance requirements attracting buyers
Remaining warranty coverage transferring value
Longer useful life of major systems and components
However, new construction in developing areas sometimes experiences slower appreciation if the development takes years to complete and builders continue adding inventory that competes with resale homes.
Research local market dynamics before assuming rapid appreciation. Established neighborhoods with limited available lots often see stronger appreciation than large developments still in active construction phases.
New construction offers several compelling advantages worth considering carefully.
Today's building codes require energy efficiency far exceeding standards from even 10 or 15 years ago. New homes typically feature:
High-efficiency HVAC systems reducing utility costs 25 to 40 percent compared to older systems
LED lighting throughout consuming a fraction of traditional incandescent power
Low-E windows reducing heat transfer and improving comfort
Increased insulation R-values in walls, attics, and crawl spaces
Energy-efficient appliances meeting current Energy Star standards
Open floor plans, popular in current home design, maximize perceived space and accommodate modern lifestyles emphasizing family interaction and entertaining. Primary bedroom suites provide private retreats. Home offices, mudrooms, and specialized spaces reflect how families actually use their homes today.
Smart home technology integration comes standard or as upgrades in many new homes. Pre-wired infrastructure for security systems, smart thermostats, and home automation costs thousands less to install during construction than retrofitting into existing homes.
Everything in a new home should work properly for years. You won't replace the water heater, HVAC system, or roof for a decade or more. Appliances carry manufacturer warranties. Windows shouldn't need replacement for 20 or 30 years.
This maintenance-free period provides financial breathing room for homeowners, particularly first-time buyers managing new expenses. You can focus on furnishing and personalizing your home rather than immediately addressing deferred maintenance.
Spec homes already complete or nearing completion offer remarkably fast move-in timelines compared to existing home purchases. Once you make an offer, you might close within 30 to 60 days—or even faster on completed inventory homes.
This speed benefits buyers facing timing constraints. Job relocations, lease expirations, or school year considerations sometimes require quick moves that existing home purchases with inspection periods and seller timelines can't accommodate.
New construction isn't perfect for every situation. Consider these limitations carefully.
New buildings are mostly going up in developing areas on the edges of suburbs or in planned communities. If you want a neighborhood with mature trees, walkable amenities, and a sense of community, you might not be able to find new construction options in your preferred area.
New construction developments often have longer commutes. The homes are built where land is still relatively cheap, which is usually farther away from jobs and city amenities.
Carefully look over the information about the school district. Sometimes, new developments cross district lines or are in districts where long-term performance is not clear. In established neighborhoods, school assignments are more likely to be the same each year.
If you buy early in a development's build-out, expect years of construction activity nearby. Trucks rumble past daily. Construction noise starts early morning. Dust from active building sites drifts into your yard. Streets might remain unpaved for extended periods.
These temporary disruptions eventually end, but they affect your daily life and enjoyment of your new home for potentially years. Ask builders about the development timeline and what percentage of planned homes they've completed to gauge how long construction activity might continue.
Planned communities overwhelmingly include homeowners associations. These organizations maintain common areas, enforce architectural standards, and provide amenities. They also charge fees and impose rules you must follow.
Monthly HOA fees add to your housing costs permanently. These fees can increase annually, sometimes dramatically if the association faces large repair projects or insufficient reserves. Review the HOA's financial statements, CC&Rs, and recent meeting minutes before purchasing.
HOA rules might restrict your freedom more than you expect. Many associations prohibit certain paint colors, fence styles, landscaping choices, or recreational vehicles in driveways. Understand these restrictions before committing.
In today's competitive housing market, buying a new construction home comes with a warranty, modern designs, and energy efficiency. People want homes, and builders are doing a good job of offering incentives that make homes more affordable. By August 2025, sales will reach 800,000 a year.
You can avoid surprises and set realistic expectations if you know the differences between buying a new home and an existing home. Building spec homes takes time, anywhere from 7 to 12 months. But in the end, the homes are great for how people live now.
In August 2025, the median price hit $413,500, which brought it in line with the prices of homes that were already on the market. This meant that new homes had to compete with homes that were already on the market. Builders get incentives, like mortgage rate buydowns that 61% of builders use, which makes homes cheaper and gives buyers more money to spend.
If you do your research on builders, you won't have to worry about getting bad work or contractors who don't show up. When you do thorough inspections during construction and before closing, you can find problems when they are easiest to fix. You will be safe as long as you know what the warranty covers and keep good records.
Some people can't choose from as many options because of where they live and the rules of their homeowners association. Building in places that are still growing can also make things worse for a while. You can decide whether or not to build new by looking at the pros and cons.
Are you ready to look into new building options in your area? First, look for builders who work in the areas where you want to live. Look at their websites, visit model homes, and compare the base prices and features that come with them from different builders.
Get preapproved for a mortgage before making offers. This gives you a better chance in negotiations and makes builders pay attention to you. To make sure you get the best deal, look at the builder's favorite lender and other mortgage companies.
Learn about the costs of buying a home, like HOA fees, property taxes, and other costs. Make a complete budget that includes these costs that happen all the time. Remember to add up the costs of moving, landscaping, and window coverings.
If you're thinking about buying a home in a development, talk to people who have recently moved in. We can learn a lot from their stories about how trustworthy builders are, what quality standards they follow, and how well they handle service after the sale. To get a feel for the neighborhood and how people live there, drive through finished parts of developments at different times of the day.
Talk to builders about incentives, upgrade options, and how to make the home your own at meetings you set up. Learn about current deals, how long it will take to finish, and what the warranty covers. Make a list and compare what different builders have to offer in a methodical way.
You might want to hire a buyer's agent who has worked with new construction before if you don't know how to buy a house. They know how to talk to builders and read over construction contracts to make sure your interests are protected. A lot of agents work with new construction and know what not to do.
Look at buildings that are at different stages of being finished. You can see houses that are being built, have just been finished, or have been lived in for a few years. This shows how properties get older and if the builder keeps the quality up during the building process.
The market has options for you if you're willing to learn how to buy new construction. How well you plan, research, and make decisions will determine if new construction gives you the home of your dreams or makes you wish you hadn't done it. Do the work at first, keep asking questions, and trust your gut when something doesn't feel right.
The ability to negotiate changes a lot depending on the market. When the market is strong and there isn't much inventory, there isn't much room to negotiate the base price. Prices could go down by 2 to 5 percent in softer markets. Instead of the base price, focus your negotiating energy on upgrades, closing costs, and incentives. Builders are more likely to be flexible in these areas. Keep in mind that the 61% of builders who offer incentives in 2025 usually do so through credits and buydowns instead of lowering prices directly.
You don't have to use an agent, but having one can be helpful. Buyer's agents know how to negotiate with builders, know what homes are worth in the area, and are good at looking over contracts. Builders usually pay buyer agents' commissions, so you don't have to pay anything directly for representation. But some buyers are able to get better deals by working directly with builders and asking for lower commissions as extra concessions.
Most purchase contracts have estimated completion dates but no guarantees. Builders plan for delays caused by bad weather, problems with permits, and not having enough materials. Your contract should say what to do if delays go on for too long. This could include daily rent credits or the right to end the contract. Before you sign, make sure you read the completion timeline provisions carefully and know what to do if they don't happen.
Change orders are what you call changes that happen after you sign a contract. Builders are usually willing to make reasonable changes, but you should be ready to pay extra for them. Changes made early on, before framing, might cost 10 to 20 percent more than usual. Changes made after framing or during finishing can cost 50 to 100 percent more and make the schedule late. Choose wisely before you sign to avoid having to pay for changes later.
Builder warranties only cover problems with the construction and materials. Home warranties, on the other hand, cover any problems with the systems and appliances, no matter what caused them. Builder warranties cover fewer things but last longer for problems with the structure. Think about getting a separate home warranty to protect your appliances and systems even more, especially when your builder's warranty runs out.
Even for new construction, independent inspections are a good way to keep an eye on things. Building inspectors from the city check to see if buildings follow the code, but they don't check for quality or best practices in the industry. Your inspector only works for you and often finds problems that building inspectors miss. Set aside $400 to $600 for multiple inspections during construction.
The construction company that builds your home gives you builder warranties. The builder buys third-party warranties from companies that are not connected to them. Third-party warranties protect you if the builder goes out of business or refuses to pay claims. They usually offer better coverage and simpler ways to file claims. Check to see if your builder offers third-party warranties and, if so, from which company.
When you first get your property taxes, they usually show the value of the land, not the value of the house. The first full year of property taxes might not seem like much. After the assessor records the value of your finished home, which usually happens 12 to 18 months after closing, your property tax bill will go up a lot to reflect the real value of your home. Plan for this future rise in your budget from the start.
Yes, for homes that are already built. Before you close, your home should be completely finished, pass all inspections, and get a certificate of occupancy. Sometimes builders close on homes before all of the small punch-list items are done, but you should be able to move in right away after closing. Check that the certificate of occupancy has been issued before the closing date.
Write down problems right away and tell the builder about them in writing. Take pictures and explain problems clearly. Builders usually deal with valid warranty claims in a reasonable amount of time. If builders don't honor valid warranty claims, your state's contractor licensing board or consumer protection agency might be able to help settle the disagreement. If you have a serious problem or a big money problem, talk to a lawyer.
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