Buying a new home can be a stressful experience, but with the help of professionals, you can make this a lot easier. A new-construction homes can be found at great prices, especially if you know where to look for them.
Today, we will give you more than a handful of useful tips when purchasing a new construction home. Let’s get started.
Get Pre-Approved For A Loan
To get started, you’ll have to secure a home loan with a bank or a lender. To get pre-approved for a home loan, you’re going to need five things:
- Proof of income
- Proof of assets
- High credit score
- Verification of employment
- Additional documentation (e.g. driver’s license)
A lender will have to verify that you have a stable income (from a paying job) and enough funds for your down payment and everything that comes after it. They will look at your pay stubs, any additional income (if you have it), annual tax returns, proof of assets and cash reserves, DTI, and more. Of course, all of this is subject to change based on type of loan.
On top of all of that, you will require a credit score of at least 620 to get approved for a loan. Anything lower will significantly lower your chances of securing a loan. On that same note, for the lowest interest rates, you’re expected to have a credit score of at least 760. Therefore, before you even consider buying a new-construction home, you should have your finances in check.
Set The Budget And Stick To It
If there was only one tip to choose from when you are buying new construction homes, it is this one.
After you’ve secured the loan, you’ll have to allocate the funds and set the budget for your new construction home. Set it somewhere comfortably. You don’t want to spend your last dime, but you also don’t want to skip out on a new home. However, that’s not the most important thing. Regardless of how high or low you’ve set the budget, the thing that matters most is that you stick to it.
If you ensure that you shop within your budget, you can comfortably browse houses with your realtor and find the one that fits you the most, without worrying you’ll fall in love with a home that’s out of your price range. Furthermore, you can rest assured that you will have some leftover cash for furnishing, decorating or any other investment that might come along.
Get an Independent Real Estate Broker to Represent You
If you’re unsure whether to hire a real estate agent or a real estate broker before buying a new construction home – don’t be. You should most certainly hire one, because a real estate agent will save you time and money. Furthermore, they will also prevent you from making some costly, easily avoidable mistakes that you otherwise might make.
One of the things to note is that you’ll want to work with a real estate agent before you visit the development community and take a look at the new-construction home. Nine times out of ten, builders and project managers work closely with real estate agents, and the agents are the ones that bring along prospective buyers, so you end up being registered to buy a home via your agent. However, it is important to note that hiring a real estate agent and collaborating with a sales agent hired by the builder is not the same. Your agent works in your best interest.
Another neat benefit of this approach, aside from not having to do your own research and home-hunting, is the fact that you’re not the one paying the agent. This doesn’t cost you anything. In real estate, the one covering the commissions is the seller. This is made possible because builders offer commissions to real estate agents if they manage to sell the newly constructed home.
Be Prepared To Negotiate, But Don’t Expect Much
As soon as you begin shopping around for a new construction home, you will realize one thing – these homes are pricier compared to older homes. However, there’s a reason for it. It’s rather simple, really. They’re more expensive because they’re new. No one had previously lived in them, so you can expect the move-in to be free and painless. You’re paying a premium free because everything’s in pristine condition, you won’t have to worry about maintenance for at least a few years, most of the stuff is either insured or under a warranty, and so on.
However, just because the price tag is set high doesn’t mean that there is no room for negotiations. You can always try your luck and offer less than the initial asking price. Now, how successful you’re going to be is not something we can tell you. It’ll depend on both your real estate agent and the seller, but from our experience, you shouldn’t expect a major discount.
Do Your Own Research On The Neighborhood
You can be more than confident in the validity of information you receive from your real estate agent about the neighborhood you are about to move in, but it never hurts to do some research on your own. Information about the school district, crime rates, property value trends, and all that jazz will be provided to you by your agent, and when it comes to that kind of research – you don’t have to do anything.
However, you can’t rely on your agent when it comes to information about your actual neighbors, their habits or anything else that might be of interest to you. That is something you will have to handle on your own. Figure out who you’re moving next to, and if that checks out – congratulations – you’ve found yourself a new home!
We are fairly confident that if you take these tips to heart, you’ll have a lovely home for yourself and your family in no time. It will only take you a few days to move into your new home once you buy it, so what are you waiting for? Make the move, buy the house and bask in that new house smell.