The real estate market has finally begun to pick up in many parts of the country. However, in spite of the number of buyers who are out shopping, the inventory for homes is rather low. It is difficult to pinpoint the exact time when the situation will improve. But having said that, it is also known that larger home builders around the country as well as a few small ones have begun to buy land and getting the new homes.
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Is investing in a new construction the right option for you? Here are a few things you need to know before you make your decision.
- Check if the new Home is listed with a local Multiple Listing Service
Like most regular sellers who list their homes with local real estate agents, it is important that homebuilders are also members with the local multiple listing service. Most homebuilders have their own employees working for them on site. This gives them additional control and a chance to cut costs.
When a homebuilder is listed with a listing service, you as a buyer will be able to find them on the agent’s search. Unlisted builders are more likely to advertise online or through print media. If it is newly built homes that you are looking for, find an agent who is able to identify all the possibilities.
- New Homes are often sold even before they are Built
A builder usually needs to get his financing lined up and mapped out for construction as well as the sales process. This means that they will try to sell as many homes as possible before the construction work is over. Many builders start by creating model homes with enable buyers to review the plans, finishing, fixtures and other elements while the actual home is still under construction. Depending on the locality of the construction, the builder will be required to acquire a list of approvals before they can star signing contracts.
The best part about taking a look at the model home is to get a sense of what your new house will look like and where it will be located from a community perspective. It is also important to understand that even if the project is for let’s say a 100 homes, not all of them will be available at once. Most builders tend to release homes in phases. Also, if the first few homes continue to do well at the asking price, chances are that the builder will increase prices in the other phases, provided the market is doing well.
Finally, in most scenarios, builders in the early stage of the sales process prefer to get the homes under contract as quickly as possible. If the builder makes an announcement that they already have an X number of homes under contract within a matter of weeks, the chances of the project seeing desirable purchases is a lot higher. From the perspective of the buyer, this means that as an early buyer you can negotiate the price down earlier into the sales process.
