Buying a home can be a stressful and confusing process, especially for first-time homebuyers. Building a new home can be even more stressful and confusing. You will have a ton of questions about the process, but be sure to address the following issues as well.
1. Guaranteed price
Deciding to build your own home can be an exciting time. You can tour multiple model homes to get an idea of what floorplan works for you and your family while also becoming familiar with builders and their pricing. Don't take too long, however. The cost of lumber and other construction materials has been on a wild ride throughout the pandemic. In 2021, for example, lumber prices were at an all-time high in May only to plummet 40 percent in June. To counteract that volatility, builders may not be offering to guarantee their advertised pricing for more than a week or two. Ask how long the price is guaranteed.
2. Time frame
The ongoing joke in new home construction is that the project always takes three times as long and costs twice as much as you anticipated. On a serious note, you should ask how long your custom home builder expects the project to take. In addition to pent-up demand for housing nationwide there is a shortage of workers, your builder may be feeling the pinch. Discuss a realistic time frame for completion with your custom home builder. While you can always expect a hiccup or two, the builder should be able to give you a general idea.
The competition was fierce for homes in 2021. In the San Francisco market, for example, Zillow reports that almost 50 percent of all homes are sold over the asking price. Custom home builders felt the effects of the competitive market as well. Some even implemented a lottery system to help determine sales. Talk to your custom home builder to determine the availability of homes in the development for 2022.
4. Financing specials
While interest rates are still low for home loans, your custom home builder may offer an in-house special. In other words, if you do your financing through them you could receive a bonus. The financing special could be reduced closing costs, zero homeowners association dues for the first year, or even a month or two without payments. Ask your custom home builder if they offer in-house financing.
Finally, talk to your builder or salesperson about any incentives they may be running. Winter is a slower time for builders and they may be willing to throw in an extra or two if you sign a contract. This could be a free landscaping package or an upgrade to wood floors. It never hurts to ask.
The key to buying a house from a custom home builder is to be aware of the current market conditions and ask questions.