The New Construction Purchase Process (6 Steps To Understand The Process)

The New Construction Process Can Seem Complicated – It Is Easy When You Understand It

From deciding on your community, builder, plan, and homesite, to upgrades and finishes at the pre construction meeting, there are lots of decisions to make. Take time to view our other articles and videos to go further into detail on all of these selections and meetings. This article will focus on the steps to new construction and a simple breakdown of each one. Comment below with any specific questions you would like us to address in a future blog post.

Step #1 – Select Your Community, Builder, Price Point, Plan, and Homesite

Step 1 can be one of the most research dense steps in the process, and it will take some time and effort on your part. You will need to decide what the most important point is to you from those listed above and go from there. Finding the right community and builder can be easy, but if they do not offer plans or sites in your price point, this can lead to let down or disappointment. Do your research on what your budget is with taxes and interest, and then start to narrow your search. Trust Me, It will lead to less of a let down in the long run. Here are some of the key factors in deciding on the points above, but I will like to the articles and videos that go in depth on each one for you to review.

  • Community – Does the community fit how you live, are the amenities suitable to your lifestyle, is the location suitable to you, are the taxes and schools important and how do they rank vs what you are looking for, does this community cater to the lifestyle of you and your family


  • Builder – What size homesites does the builder offer, do they cater to your budget or price point, do they sell only inventory or can you customize your home, what are they know for and what sets them apart, do your values align with the values and focus of the builder


  • Budget/Price Point – Are you able to get the floor plan you want, on the homesite that fits your needs, and upgrade it like you want to. Where do you need to make changes or adjust expectations to get the plan you want at the price you can afford


  • Plan and Homesite – What floor plan fits your family’s needs and wants. Does it offer structural options to help meet those needs, and how can it be adjusted to fit what you are looking for. How does the plan fit on the homesite, and does it offer the space you require for today and the future.


Step #2 – The Purchase Agreement Process

You have decided on a community, plan, and site, and now it is time to do the paperwork and get started. If it is a Quick Move In or Inventory Home most builders will offer incentives in the form of price reduction and/or financing incentives to go with their preferred lender. You can negotiate these prices by making an offer accompanied with the earnest money (we will discuss shortly), and the builder can accept, decline, or counter this offer. On to be built or dirt sales, most builders offer a set design center credit for upgrades based on the community and/or price point. You will want to determine what this  is with your sales consultant as part of you decision making process on budget and upgrades as well.

To start the process you will normally select your structural options, exterior  options, and pay your earnest money and structural deposits. This starts the process and gets the ball rolling on scheduling design center appointments, having blueprints drawn, and scheduling the start date for your new home. Keep in mind that structural options are set at the time of contract and can be costly to change after this point, as the entire blueprint set will need to be re-drawn to accommodate changes.

Earnest money and structural deposit will be due at this time. You can expect for earnest money to be in the range of $2,500 – $15,000 depending on location, price point, and builder. You will also pay a structural deposit of 10-25% of the structural options at this point. The design center options normally have a 25% deposit, and that is due after you finalize design options and pre-construction meetings.


Step #3 – Design Center and Pre-Construction

You will now take the next step in designing your new home with a designer. With some builders this could be 1 appointment at a design center, others offer 2 design appointments, and some will be designed along the way (normally custom homes with construction loans). Whatever your builder offers make sure you do any pre work they offer and plan out what features and upgrades you like. You can use Pinterest and Houzz along with other interior design websites to get ideas to present to your designer. Always ask your designers if there are ways to get the look you are going for, and still stay within your desired budget.

After your Design Center Meetings you should sit down with your builder and sales consultant to go over pre construction related changes. These often include electrical upgrades, plumbing upgrades, and structured wiring such as Cat6 and RG6 placements along with surround sound and tech prewires. This meeting should also be a recap of all the structural and design center upgrades to make sure everyone is on the same page moving forward.

It is important at the Pre-Construction Meeting to also get standards and expectations from your builder/sales consultant. When and how will contact and updates be made. How often do they reach out to discuss progress and timeline with you. I sit down with my builders and call each homebuyer every week to discuss updates and where we are ahead/behind so everyone is well informed through the process. At this point you are ready to start the home and finally…………Construction Begins.


Step #4 – Pre-Drywall Meeting

The pre drywall meeting is one of the most important meetings in the process, and for good reason. It is your last chance to take photos of where things are behind the walls to ensure you have some idea of plumbing and electrical location. This can be important when hanging photos and décor to the walls to ensure you do not put a nail through a pipe or hit an electrical line. This is also you last chance to ensure that electrical and wiring changes from the pre construction meeting are in, and installed in the correct locations. You builder should walk you through your home with the upgrade summary and point out the items you added and location of these items. This meeting is not for adding things (this was done at pre construction and could be costly at this point), but is a confirmation meeting that everything is in and where it should be before the drywall goes up.


Step #5 – Homeowner Introduction Meeting

At this point the home is complete, the builder has walked the home, their team has signed off on the home, and it is ready to be presented to you. The builder should walk you through the home inside and out, and teach you about how the home works. This includes where shut offs are for electric and plumbing, where cleanouts are for plumbing, where certain switches and electrical components are, and confirm that everything works and is fit and finished in working order. If there are outstanding items at this point your builder should discuss scheduling of resolution of these items.

At this point the builder should allow you to review your home and mark or note deficiencies and cosmetic issues you would like addressed. These will be completed before you sign off on the home and go to closing. Ensure you spend time in your home and look for cosmetic items that may be of concern to you. You may also want to discuss touch up items with your builder to see if this is something they offer. One thing I recommend at this point is getting the contact information for the painter and any other workers you may need if you have projects planned in the future.


Step #6 – Sign Off and Closing 

Once the builder completes the items on your final cosmetic and outstanding items list, you will have one additional walk through for confirmation and sign off. Outstanding items should be placed on a list and you should ask for an email from management to confirm these will be addressed. If you can nail down a timeline for completion of these items it is always best to do so. The next step is to sign off on the home and move to closing.

Closing will take place and your lender will fund the loan. At this point your builder will transfer title of the home to you, and your sales consultant or builder will deliver your keys (and hopefully a beautiful welcome home gift). You are a proud new homeowner and your journey of building is complete and homeownership begins.



In Summary

When you think about the new construction home buying process, it is relatively simple if you know what to expect. During your decision making process be sure to discuss these points with your sales consultant and have an understanding of how they do things. The points above vary based on builder and location, but should act as a guide to help you on your home building journey.


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