New Construction Homes


This quick guide will walk buyers through the process of purchasing a new construction home, as well as working with a buyer’s agent. Buyers will have a better understanding of the timeline, design options, mortgage loans, things to consider, and the importance of choosing the right builder.

Let’s learn about new construction homes!

What is a New Construction Home?

In today’s housing market, buyers are having a difficult time getting their offers accepted due to market saturation and competition. This has led many to consider a newly constructed home, meaning the buyer is the first person to live in the house after it’s built. There are various ways buyers can acquire a new construction home, such as:

  • Purchasing their own plot of land and contracting with builders and architects.
  • Purchasing a built home and the lot from its developer.
  • Purchasing a plot of land from a developer, then choosing between home design options.

Whichever option the buyer chooses can affect the home buying timeline. Therefore, it’s important for buyers to have a time frame in mind, since building a home can take months to even years to complete.

Types of New Construction Homes

There are three main types of construction homes that buyers can choose from:

Semi-custom: Though the structure is mostly built, buyers can have some say in customization and design.

Spec: These homes are completed by a builder before the buyer moves in. The buyer has no say in its design/style.

Full custom: From blueprint to appliances, these homes are customized by the buyer.

Tract/Production homes: These homes are typically found in clusters with similar designs. Buyers may be able to choose between different floor plans, exterior design options, and building materials.

Each of these construction homes comes with a different price tag, with full custom being the most expensive. Buyers should keep this in mind when budgeting for their home.

Buyer’s Agents for New Construction

Though one can purchase a newly constructed home without the help of a buyer’s agent, it is recommended to work with one. Buyers should seek out buyer’s agents who specialize in new construction homes because they will understand the timeline, catch quirks in contracts and the purchase agreement, and have the buyer’s best interests in mind.

A buyer’s agent will make sure that the buyer is not signing off on terms that benefit the builder more than the buyer. Read our blog, “How to Find the Right Buyer’s Agent” for traits to look for, sample interview questions, and more.

Thinking about Location

Just like buying an existing home, buyers should research neighborhoods and areas before settling on a location. Factors to consider include:

  • School districts
  • Distance to airport(s)
  • Commute to work
  • Entertainment options nearby (bowling, movie theater, etc)
  • Proximity to stores, restaurants, hospitals, and more
  • Proximity to recreational spaces
  • Crime rates
  • Property taxes

Finding a Lender

Unless the buyer plans to finance the home in cash, they will need to find a reputable lender to obtain a mortgage loan. When buying a new construction home, buyers have the option of obtaining a construction home loan. These loans differ from regular home loans because they are not permanent loans; instead, they operate as short-term loans that cover the costs of custom home building. Once the building is completed, the loan will either be converted into a typical mortgage, or the construction lender will require the buyer to obtain a separate mortgage.

However, not all lenders offer this type of loan. Fortunately, builders often have a list of recommended lenders and may even incentivize buyers by offering a reduced price if the buyer works with their recommended lender.

As always, buyers should research lenders to find the best rate, customer service, and reputation among borrowers. Contact HomeHunt today to connect with a mortgage professional!

Research Builders

Whether the buyer chooses to purchase a spec, full-custom, semi-custom, or production home, they will need to find a builder. If the buyer finds a newly built development they are interested in, they should walk around the neighborhood and ask residents about their experience with the developer.

Buyers who search for builders online should read testimonials, check out their social media pages, and interview them. Buyers should also keep in mind the home style they want and ensure that the builder has experience with that specific style, or something similar.

Buyers can find local developments and builders through their local home builder association or the National Association of Home Builders.

Considering Home Styles

The fun side of financing a new construction home is personalization and customization. Depending on the builder and which home type they choose, buyers may have the ability to choose the following features:

  • Square footage
  • Floor plan layout
  • Number of levels in the home
  • Number of beds and baths
  • Building materials
  • Exterior and interior design/structural features
  • Upgrades (if applicable)

When choosing a home design, buyers should plan for their evolving lifestyles, such as whether they will need extra space for kids, pets, guests, and more. If possible, buyers should take a walk through similar model homes to better understand home features and elements they like and dislike. This can also be helpful when deciding which materials and colors to use after construction. Take time during the walkthrough to ask the building manager any important questions.


There are standard items and features that every home must have. Buyers will be given standard options of countertops, paint colors (such as whites, beiges, and grays), flooring (such as carpet or laminate), and light fixtures. However, buyers can meet with their building manager about possible upgrades to increase personalization.


As mentioned above, buyers can select upgrades on appliances, materials, and more, but this comes with a price tag. Additionally, not all upgrades prove fruitful after resale, so this is where a buyer’s agent can be helpful. Builders may push buyers to make unnecessary upgrades, but an agent will help the buyer determine whether a specific upgraded feature is worth the investment, or just a waste of money.

On the other hand, kitchens and bathrooms will typically benefit from newer appliances, especially if the buyer plans to resell.

New Home Inspection

Even the best builders can make mistakes, so it’s vital to have the home inspected. Many new construction home buyers skip this step, and later end up with a lower resale value than expected. A buyer’s agent who is familiar with a newly constructed home can recommend a home inspector who understands this process. It can even be beneficial to acquire two inspections, one before the walls are closed, and one after. Buyers do not want to be left with plumbing and electrical issues after everything is finalized.

Sign and Review Warranty Documents

A buyer’s agent can help the buyer understand the type of warranties placed on the home buying process. Typically, builders offer the following types of warranties:

Implied Warranties: Covers workmanship defects that could have an impact on the home's livability and safety. These warranties typically have a 10-year liability period.

Express Warranties: These clearly define the specific problems the builder is responsible for fixing. The length of this warranty can depend.

Final Walkthrough

This is the last step before closing! At this point, all repairs and inspections should be completed. During this walkthrough, buyers should look for splattered paint, left-behind building materials, shoddy craftsmanship, and any other issues. However, unless the purchase documents specify a professional cleaning will take place, general dust and uncleanliness are not cause for concern.

Closing Day

Congratulations! Closing day is the final step and the buyer’s agent will walk the buyer through any action items on their part before and leading up to closing. Buyers should gather all necessary paperwork for a smooth closing process.


Building and buying a new construction home can be a long process, but for some, owning a customized home makes it all worth it. Plus, living in a newly built home can mean less maintenance and money spent on upgrades/new appliances. If a new construction home is right for you, contact HomeHunt today to learn more and connect with a buyer’s agent who can get the process started!