Most new home buyers get sucked into the glamour and excitement of new construction and don’t take the time to do their homework. Too many times new home buyers realize after it’s too late they’re in over their head when buying a new construction home.  

In the video above and below I'll discuss the TOP 5 Biggest Mistakes MOST Buyers make when purchasing a New Construction Home.

Currently in the Sacramento Region, about 14% of ALL home purchases are new construction homes. Chances are if you are in the market to purchase a home, you will be drawn to tour one of the many perfectly designed and decorated model homes in the area. 

Buying a new home can be a super fun and exciting time but more often than not, Buyers make critical mistakes that can cost them big time!  

Mistake # 1:

Assuming builders prices are set in stone.
This is Totally False! New Construction Homes are negotiable, just like resale homes.  The Builder’s sales reps will try to convince you otherwise, because in reality, They WORK for The BUILDER to make them the MOST money! There are several terms you can leverage when negotiating new construction homes such as downpayment, contingencies, financing, upgrades and others.  DO NOT Go into a model home without an expert on your side!  Having a great agent that knows the new construction homes can be a big help when it comes to negotiations!

Mistake # 2:

Not Doing Your Research or Due Diligence.
This is a Critical Mistake and it can cost you THOUSANDS of dollars, huge headaches and even regret.  I think this happens a lot because when people just get started they might stop at a new construction development that they saw online or drove by to ‘check it out’ and they end up falling in love and buying the thing without knowing anything about it other than what the builder’s sales rep tells them… The builder’s sales reps are just that, sales reps that are hired to highlight the POSITIVES. What about the negatives? 

Let’s discuss what you should research! I’ll discuss these points in more detail in a follow up video, so make sure to subscribe on my youtube channel to get notified when it comes out, but for now here’s a quick overview-

A few of the biggest things you should research are...

1. Resale Values - what are homes already built in the development selling for on the open market?

2. Costs of upgrades - there are smart and flat out ridiculous upgrades you should never get from a builder. And there are items such as landscaping back yards that almost NEVER come with a new home.

3. Builder Reputation - how often to they meet their timelines, what is their Quality of construction?

4. Schools - Schools can massively impact resale value and where your kids go to school.

5. Special Tax Assesments - Got Mello Roos? These can cost you thousands every year! Know what they are!

A good agent will make research easy because they’ll do it all for you :)

Mistake # 3

Not Using an Agent.
I know I’m a little biased, but WOW, around 50% of new construction homes in the Sacramento region are sold without an agent.  Having an Agent should be priority #1, it cost’s you NOTHING! Builders want agents to bring them buyers! And for the cost of $0, you get an advocate on YOUR SIDE that will provide expert advice, hopefully great negotiation skills, and a sounding board for upgrade costs, missed deadlines, community advice, resale advice, vendors and the list goes on and on.  There may be other developments you have no idea about that may be a good fit for you, so make sure you reach out to a great agent to help!

Mistake # 4

Trusting the builder will meet all timelines and deliver a perfect product.
There are a lot of factors that can effect the closing date when buying a new construction home.  Typically homes take 4-8 months to complete from ground up and I’ve heard many horror stories of builders delaying closing for months causing a ton of stress and hardship for buyers with homes they’re selling or leases ending and not having a place to live!

Some of the most common issues that cause delays are:

Permits, Weather, Change orders and Community approvals

When it comes to the “perfect product” Were all the upgrades done properly? Make sure you take the time to know the construction manager or foreman and do walkthroughs to check the Quality of work. If you need to make changes or you spot problems these things WILL take time to correct and can delay closing, so adjust your timeline wisely and stay on top of the builder to meet their deadlines!

Mistake # 5

Assuming you need to use the Builder’s lender.
Typically builders will offer you some incentives if you use their in house lender but this can COST you more than what you’re getting from the builder in incentives. Shop around, you don’t need to use their financing. Your RE Agent should be able to help provide you with a few lenders in your area so that you know you’re getting the best financing.  When in house and outside lenders compete for your business, you win.  

Those are the 5 biggest mistakes when buying a new construction home, I hope this helps in your pursuit of finding your perfect home! 

Check out this page for info on Builders in the Sacramento Area:

Sacramento New Homes 

If you have additional or more specific questions about homes in the area feel free to reach out to us by phone or email, we are always here to help! 

Call us at 916-500-4410