Many homeowners like the idea of owning a home that has not been lived in by anyone else and can be customized to fit their needs. When you are looking to purchase a newly built home as opposed to a renovated or previously owned home, you may find homes for sale in various states of completion. Around 25% of new homes are completed when they are sold and the remaining 75% are either not yet started or are under construction. Most homes can be financed and purchased at any one of the three main stages of construction. However, which option is right for you depends on your personal needs and desires. Better understanding the three phases of home construction can help you communicate your needs to your real estate agent and find the home you want quicker.
Not Yet Started
Purchasing a home that has not yet been started is a good idea if you want to have the ability to completely customize your home. This allows you to make major structural changes to the home, such as adding or combining rooms or extending the home over the garage, without drastically increasing the cost of the project.
If construction has not been started on a home, there is a chance that some permits have not been secured. Additionally, if you request major changes to the design, plans may need to be approved a second time, which can increase the cost of the project. This can result in major delays to the project and can push back your desired move-in date considerably.
To get the most out of a construction that has not been started, you may want to consider purchasing a lot and home in a development that is currently being built. This helps ensure that permits will not be a problem. However, you may have to deal with construction in your neighborhood for several years.
Purchasing a home that is already under construction is a good idea if you know you like the layout and design of the home but you have not made your final choices regarding finishing touches. This allows you to select specific flooring, paint, and appliances to best suit your new home and your design style. However, since the home has already been started, you can be sure that the proper permits are in place and the home will most likely be completed according to schedule.
For homes that have not been started and homes that are currently under construction, it may be difficult to secure a loan to cover the cost of construction. This is because banks tend to lend based on the current value of the property, not the projected value of the finished property and because it is difficult to secure a loan before a house is declared habitable. For this reason, homes that have not been started or finished are usually best for home owners who can invest a significant amount of cash. However, if the home is part of a larger project, you may be able to reserve the home with a reasonable deposit and apply for a traditional mortgage once the property is completed.
Purchasing a new home that has already been completed allows you to move in as soon as the paperwork is finished. This means that there is very little waiting before you will be able to occupy your new house. However, you will also not be able to customize aspects of the home without calling in additional contractors and paying more to complete unnecessary remodeling projects.
A completed home is a good purchase if you want to move in as soon as possible and you are happy with the layout of the home as well as its finishing touches.
When you are considering buying a newly constructed home, your first consideration should be what phase of construction you are looking to invest in.