Buying or building a brand new home is an exciting experience. Whether you are having your own custom built home or buying a new home that is already built from a production builder, it can be a stressful process to go through alone. Why not consider working with a professional who understands and can help you work through all the details involved in the home building process? When Choosing to buy or build a new home, we strongly recommend working with a Realtor. From choosing a lot to build on to closing on your brand new home, an experienced Realtor can guide you through each step of the process.Your Realtor will serve as your advocate, allowing you to make well informed confident decisions while providing you with valuable information and will be there for you should you have any questions or concerns. In this article, we’ll explain the different types of brand new homes, as well as why you should work with a Realtor through this important process. Many of our agents are experts when it comes to building new homes in Houston and surrounding areas, and are happy to answer any of your questions.
Production Homes vs. Custom Built Homes
What’s the difference between a production home and a custom home? In short, a production home is one built from a variety of pre-designed floor plans with variable options. A custom home is one that is completely unique and designed specifically for a particular homeowner and home site. See below what qualities these homes are compromised of.
Typically, larger companies (national or local) that specialize in building high volume homes are the ones that build and develop production homes. Entire master-planned communities or neighborhoods are developed by many of these builders. In most instances, several floor plans for one neighborhood are provided by builders, with a specific list of upgrades and customization’s home-buyers can choose from. Design choices made by the buyer usually include flooring, paint colors, appliances, counter-tops, and features like outdoor kitchens and fireplaces. Home-buyers will also need choose an individual lot within the community on which to build. Builders may also offer speculative homes – or “spec homes” in a community. The builder constructs these homes without a specific buyer and sells it at some point during the construction process, or after it is complete, which limits the choices a buyer is able make.
Custom Built Homes
Custom homes are truly one-of-a-kind builds, where the buyer has complete control over the development and all design decisions. Choosing to build a custom home from the ground up means the options are basically unlimited when it comes to design, features and materials. Custom homes can range from simple to elaborate, depending on the desires and budget of the buyer. Building a custom home also requires the buyer to be much more involved in the building process, from selecting an architect and builder, to making floor plan, design, and feature decisions.
When building a custom home, it is important for the buyer to stay informed about the progress and all decisions made about the build to avoid mistakes.
Which Home Is Right For You?
There are pros and cons for both production homes and custom homes. When building a production home, the buyer is much less involved in the building process after choosing the features of their new home. However, the buyer is heavily involved throughout the entire process of building a custom home. With production homes, buyers are limited to the floor plans, upgrades, and features offered by the builder. With a custom home, buyers can choose any design features they desire.
Costs are also a big difference between production homes and custom homes. Depending on the intricacy of your design plans, a custom home can be more expensive than purchasing a production home. All the costs of building a production home are typically included in the final sales price, with only a small down payment upfront which may include any upgrade costs. With custom homes, the buyer is responsible for every cost along the way, from the cost of architectural plans, to builder fees and raw materials costs.
Custom home builders typically outline a draw schedule in their contract which defines what is due at specific intervals along the way, making it important for the buyer to ensure what is suppose to be complete per the contract actually is before writing a check to the builder.
Pro and Cons of New Construction
- Contemporary style
- Some flexibility on design during construction phase
- Cheaper to maintain (new appliances = fewer repairs)
- Cheaper to operate (energy-efficient construction)
- Extended warranties
- Cohesive neighborhood (consistent layout, common areas)
- Frequently have a homeowners association (helps protect resale value)
- It’s brand-new!
- Cookie-cutter design
- Limited negotiating room on price
- Potential for homeowners association dues
- Frequently less character, or homogeneous design
- Frequently have a homeowners association (can put limits on how you use your property)
One home buyer’s pro to new construction (“No one has lived in the home before us – we will be the first to live in it”) Making sure the home you are buying is the home you want:
- Check the what else the builder has built and what is the builders track record. Were previous projects completed on time, on budget and without bad blood between the builder and buyers?
- Walk the streets of the development, ask the current residents if the builder did quality work and lived up to contractual commitments.
- Visualize your home and not the model home. Granite counter-tops, custom cabinets, custom wood trim, home theater surround-sound and jetted spa tub that you saw in the model home, can certainly be yours, however they’re not included in the base price. You will incur additional costs for these items.
- Bring your own real estate agent. If the builder has a real estate agent on site, the agent will be more than happy to help you. Remember, on-site agents and salespeople work for the builders who hire them. Their best interests will be for the interests of the builder, not yours.
Finally, consider the intangibles. Most developments are built with families in mind, similarly styled homes attract like-minded buyers. The consistency, conformity and kids playing in the street can be a blessing or a curse, depending on your point of view.
Old = Character & Charm?
New developments are popping-up constantly, it is apparent that new construction is a popular choice. However, many home-buyers still like to purchase a resale home; i.e., a home that someone else has lived in but is now on the market for sale. Some folks call them used while others refer to them as resale homes. Many of these homes are older and located in established neighborhoods and have character and charm, making these resale home very desirable.
As with many things in life, there are pros and cons with resale homes. Typically, resale homes tend to be more available and less expensive than new homes, but they are also full of surprises.
The Pros and Cons of Resale Homes
- Availability: More choices, more styles to choose from
- Price may be more negotiable
- Track record: Disclosure documents will reveal know issues
- Established neighborhood
- Could contain more charm and character
- More maintenance: Things break or wear out
- Less energy-efficient: Utility bill could be more costly
- Dated design, appliances could be old and outdated and amenities -not as many available
- Someone else has lived in it!
As with new construction, there are ways to make buying a resale home less intimidating:
- Have the home inspected. You do not want to find out that you have major issues after you buy the house; i.e. such as the foundation is cracked or the roof needs to be replaced.
- Be prepared to make a counter-offer. If the inspection reveals fixable flaws, propose the seller do the repairs or lower the price.
- Expect the unexpected. Pipes leak, electrical work becomes outdated and furnaces fail — get used to it.
- Be honest with yourself. If major repairs are required, you’ll either have to do them yourself or bring in the professionals. Some people can handle the disruption; others can’t.
Find a house you like, consider its pros and cons — emotionally and objectively — and think about the compromises you’re willing to make. The more logically you approach buying the house, the more you’re going to love living in it. Be prepared for things to be hectic if you decide to have the remodeling done while you attempt to live in the home during the process.
Should I Use A Real Estate Agent?
Whether you’re building a custom or production home, a Realtor is a valuable asset to have on your side. Here are just a few reasons you should work with an agent when building your home.
Experience– When building a custom home or purchasing a production home, buyers still have to go through the process of finding land or a home to purchase, going under contract, negotiating, and finally closing on a property. An agent brings their experience with the home buying process to the table, and can guide you seamlessly through each step.
No Cost to Buyer– Many buyers who choose to build homes decide to do so without an agent because they believe they are saving money by not paying the agent’s commission. However, it is the seller’s responsibility to pay for the agent’s commission. In the case of purchasing the home from a builder, the builder will pay the commission. In fact, the agent’s commission is already included in the price of your home. It doesn’t cost you, the buyer, anything to work with an agent. An experienced agent’s knowledge of costs and the process, not to mention the peace of mind they can provide you along the way, is invaluable.
Your Advocate– When buying new construction, don’t be lead to believe that the builder’s representative can serve as your real estate agent. At the end of the day, they are representing the builder’s interest, not yours. Working with an agent means you have someone on your side looking out for you – someone that will serve as your advocate throughout the entire home-buying process. Whether your real estate agent helps you handle all the emotional stress that is often times associated with building, or looks out for your best interests in contract negotiations, your Realtor works exclusively for you, and is your trusted partner in the building process.
Vendor Contacts– Many real estate agents have developed professional relationships with lenders, builders, inspectors, and other important players in the home building process. Whether you need an independent home inspector or an interior designer, your Team Sadler Realtors’ agent will most likely be able to recommend a professional that they have worked with before and trust to do the job well. Many service providers recommended by our agents can be found on our Resources page.
What Can A Real Estate Agent Help With?
What exactly does an agent do for you during the process of building your new home? Agents help take the stress out of building by guiding you through each step. Here are a few of the things your agent can help with during the process:
What Type of New Home is Right for You?– Building a new home is a big project, so it’s important to make a smart decision about what type of home will suit your needs best. Your agent can help you define your budget and decide whether a resale, new production home or exclusive custom home is within your reach. Your agent can also show you comparable homes in the area to help you decide which type of home will work best in the area you’re considering. In short, your Realtor can help you become an educated home buyer.
Lot Selection– Lot selection is important for custom homes and production homes. When building a home from the ground up, there are many factors to consider when choosing a property, including zoning restrictions, utilities, location, and home orientation on the site. Your agent can help you evaluate each property for it’s suitability for building. When buying a production home, the builder will most likely have several prepared lots for you to choose from. An agent can help you select which one is right for your chosen floor plan and make you aware of potential costs such as lot clearing or foundation costs on a heavily treed or sloping lot.
Upgrade Selection– One of the most exciting parts of building a new home is choosing all the upgrades and customizations to make it your own. You may think that certain upgrades will add value to your home, when in reality they will actually reduce the value of your home in the future. Using their knowledge of the market, your agent can advise you on which upgrades will add value to your home.
Lending Options– A lender is one of the most important people involved in the purchase of your new home. We cannot stress enough how important it is to work with a lender you trust. We encourage all of our clients to carefully choose a local lender who can help them secure the right financing for their new home. Your agent will be able to recommend several lenders he or she has worked with before and trust to help their clients.
Negotiations– This is where you will really appreciate having an experienced Realtor. Negotiating is another important part of the building process. An experienced real estate agent will be able to work with the builder to negotiate a contract that is agreeable to both parties. Typically, new home builders want home-buyers to use their contracts, your Realtor can explain and help you understand the contract and make sure every section is written in your best interest.
Inspections– We recommend all of our buyers have their new homes inspected. When building a new home, inspections will typically be conducted throughout the construction process for electrical, plumbing, and other systems. In addition, we encourage our clients to have a final inspection conducted before moving in to uncover any potential problems before closing. Your Realtor can recommend inspectors and once inspections are complete, your agent will review the results of the home inspection with you. Learn more about new home inspections on our Houston Home Inspections page.
Closing– Your agent will take care of all the little details to get you ready to close on your new home. As a buyer, you will have quite a bit of paperwork to sign, and your Realtor can help you understand each document. Once the builder receives funds, you are officially the proud owner of a brand new production or custom home!
We offer HOME REBATES to buyers purchasing New Construction Homes through a builder, certain rules and guidelines must be followed. Starting with, a Team Sadler agent must go with you on the very first visit to the New Home Builder.
NEW HOME REBATE —- IT’S EASY AND WORTH IT!
If you have questions about the New Home Building Process, please do not hesitate to call your TEAM SADLER Realtors agent. Otherwise, click CONTACT US below and an agent will get back to you ASAP.