With the inventory of existing homes still low, more and more people are buying a new construction home in New Jersey. If it’s within your budget, a brand-spanking-new home – one that has never been lived in by anyone else before – can be a good and delightful option. Another plus of new construction is that you’re getting the home straight from the builder. Still, there are some things you need to be aware of when buying new construction. Here, then, is what you should know about buying a new construction home in New Jersey.
The first thing you should know about buying a new construction home in New Jersey is that not all builders are created equal. That is, just because a builder is in the business professional doesn’t necessarily mean he uses top-notch materials and does quality work. That’s just not an assumption you can safely make.
So you must check out the builder’s reputation. Online reviews are a good start, but even better is to talk to other people who have bought new construction from a particular builder. It’s also a good idea to consult your [market-city] real estate agent. Your agent will have a good idea of local builders’ quality of work and can provide some guidance. To find out more about this, call 855-966-DEALS.
The Model Home Mistake
When shopping around for a new construction home, most people at some point look at a builder’s model home or homes – chiefly because that’s where the builder directs them. The problem, though, is that for buying a new construction home in New Jersey, the model home may not really be representative.
What these model homes really are is interactive showrooms, not really a look at what you’ll actually get. They are usually set up with all the premium upgrades that you most likely don’t want or can’t afford. So all those enticing features you see in that model aren’t reflected in base sales prices.
Similarly, if you do want the upgrades you see in a model home, just know that they are likely to be very expensive. When it comes to prices when buying a new construction home in New Jersey, you will usually be quoted the base price that doesn’t include any upgrades – a tactic designed to draw you in and get you hooked.
Most buyers will want some upgrades and aren’t typically prepared for the cost. For example, you may want wood floors instead of carpet or recessed lighting or a fireplace. Just be aware when figuring cost that a new construction home already costs about 20% more than a comparable existing home. Here, let your agent guide you in finding a good balance between getting what you want and staying on budget.
Decreased Negotiating Room
Another thing to keep in mind for buying a new construction home in New Jersey is that you’ll have far less negotiating room. With existing homes, the price is set by the seller according to seller needs and fair market value (that is, what buyers will pay in that market). As a result, negotiating is just an expected part of the process.
But with new construction, the builder’s price is pretty much what you’ll have to pay. If a builder lowers the base price for you, that will affect what he can expect to get for other homes in the development. And, of course, builders have to get back what they invested to build a home, plus a little profit.
Shop for a Lender
Also, be sure to shop for your lender when buying a new construction home. Typically, builders will offer to arrange financing for you – often because they have a financial incentive to do so. It may be convenient to use a builder’s recommended lender, but you may not get the best terms and rates. So don’t hesitate to shop around for your own lender.
You Still Need an Agent
Even though you can probably do everything directly with the builder when you’re buying a new construction home in New Jersey, that may not be the best route. You will likely have a better outcome if you hire an experienced local real estate agent – not least because your agent can be a valuable asset in getting the best deal with little room for negotiations. If you plan on buying new construction, get the best agent help you can. To discover more, contact us today at 855-966-DEALS.