The Five Keys to Buying New Construction

by Craig Axelrod
July 29, 2009

Have you been looking at buying new construction? A new house may be extremely desirable-you're the first to live in the home and everything is new. That said, it's up to you to make a lot of decisions about this new house. If you chose the right decisions, you may have a beautiful house for you and your family that may have great resale value down the road.

1. Location, Location, Location. Location is one thing you have to get right the first time. Once you purchase it, you really can't move the home. Be confident that you're in a neighborhood where you want to live and which will give you resale opportunities down the road. While nobody's resources are unlimited, you may want to consider a slightly nicer area over a larger home to place yourself in a better and more desirable community. This may not only help you today at 10 or 20 years from now when you look to resell.

2. Find What You may Afford. Work with a qualified mortgage professional to help you assess your budget and spending capabilities. You may want to work with a mortgage broker yet; you may be able to work with your local bank to help determine your needs even before you're ready to move forward. Ultimately, it's not what you pay for the home-it's what you can afford and monthly payments between the mortgage, taxes, insurance, maintenance and living expenses. Your credit score, income and down payment have a huge result on these numbers. For example, new construction in Commack New York can cost between $1 million and $1.1 million. The amount of monthly payments will vary wildly based on the down payment and credit capacity of the borrower.

3. Look at the Experience of the Builder. Does the builder complete communities one house at a time? Does the builder have years of experience or is this one of his or her first projects? While a individual builder can be slightly cheaper, you get what you pay for. That builder may be out of business in six months or unable to finish the home in the time allowed. New houses should come with warranties, and if the builder is not a random two years from now, who do you turn to? An experienced builder who works on multiple houses will have larger crews and should be able to work at a consistant pace. For the solo builder, construction can stop if he is waiting for a painter or electrician, whereas a larger builder will have more crew members available.

4. What conveniences you want in your house ? Look at what's selling strong in the market. If most houses have central air conditioning and a full basement and the houses you are considering purchasing do not, it may be a bargain today, but will be difficult to resell in the future. We're not implying that you need every bell and whistle that is of no interest to you, but as you consider a new construction, make certain it has the "essentials."

5. Look at the property. Is it a big enough piece for you to live with? Just like the location, you can't change the size and shape of your property. True, you can landscape and grade it, but that doesn't change the basic size and shape issues. One acre of property is great, but if 80% of the house is on a extremely wooded slope that is unusable, you are really left with 2/10 of an acre. The more usable space you have, the more benefit you may get from it and the easier it should be to resell.

Keep these things in mind as you start to look at new construction, and you should be able to narrow choices to one which can suit your needs for long-term and help you down the road when the time comes to sell.