However, although a lot of folks would love to build their own home or purchase in a new development, I’ve noticed that there’s a huge lack of education as to what that entails and how to get started.
The good news is that our team at The Alfano Group Real Estate Agency can assist you through the entire process, whether you’re buying a model home from a builder or looking for land to erect your own homestead.
Today, we’ll cover the eight crucial steps in any new construction project. Of course, there are some variations in the process depending on if you’re planning to build a custom home yourself, buy a new model, etc., but the steps are all good to know.
Step 1
Start with a lender
Just like when you go shopping for an existing home, you’ll first need to sit down with a mortgage lender. Just by bringing them some loan documentation (just as you would with any other mortgage loan) and pulling your credit, they'll be able to get you prequalified and explore loan options with you. At that point, they'll be able to answer all of your important questions, as well as tell you how much new home you can afford, what your payments will be, and how the loan process works from there. Of course, the mortgage process will be much different if you get a construction loan compared to arranging financing from the builder or a mortgage broker (which I highly encourage) for a new home project.
Step 2
Where will you build (or buy)?
Some new home consumers purchase a parcel of land, while others have family land they’ve inherited, and still more purchase a lot in a subdivision with a new home builder. No matter which option is for you, the old home buying wisdom, “Look for location, location, location” still holds true. Luckily, our team at the Alfano Group will help you find and purchase the perfect piece of land that meets your needs, or identify the new construction project that is just breaking ground.
Step 3
The blueprints
We have the financing in place, and the land or new construction project picked out, so now we can start the fun part – designing your new dream home! Of course, that’s easy (and more limited) with a builder, as they’ll have a framework for your model with a series of options or upgrades to choose from. Or, if you’re building a custom home, we’ll coordinate meetings with the builder and construction team to determine square footage, amenities and upgrades, the number of bedrooms and bathrooms, layout, and your preferences with style.
Step 4
Choosing the color pattern
While many new home subdivisions come with standard "ceiling white" paint, you'll have the opportunity to upgrade to just about any color pattern you want. There are also some practical considerations such as the quality of paint, sheen, accent walls, trim colors, and other details that will make your house look and feel like home!
Step 5
Closing the loan
Before we even found the land, drew up the blueprints, or started picking out paint colors, you sat down with a lender to get the financing in place. Now, it’s time to revisit that and get your loan underway – and closed, shortly.
If you are just getting a normal mortgage loan as the paint dries and the home is finished, that process is well-documented.
Even though construction loans are far less prevalent than regular home loans these days (and often misunderstood), you’ll find them just as easy to navigate and close. Of course, each lender may have different stipulations, criteria, and loan products to offer, but a great lender will help you navigate that portion of building a new home.
Step 6
Construction orientation meeting
Now that you have the financing all set, the construction team can actually start swinging their hammers. But before the foundation can be flagged and the digging started, you’ll get all parties together to carefully go over the plans. During that meeting(s), you’ll want to cover every detail from the blueprints, architectural drawings, budget, timetable, and more, down to every last doorknob and light fixture.
If all of that is being taken care of because you’re buying a new home project form a builder, you’ll still want to cover the fine print in their agreement. Take a close look at items like the cost of upgrades, warranties and inspections, and what happens in the case of delays due to bad weather or material shortages, etc.
Step 7
Building the home!
It’s an exhilarating feeling to see workers first break ground on what will soon be your own new home, from the time the foundation is dug until the final coat of paint dries. As an eager homeowner, you’ll probably want to follow along, too. So, in a coming blog, we'll go over the four typical phases of new home construction.
Step 8
Get your keys and move in
It may seem like the work was never going to be finished, but one day, all of the contractors will put the finishing touches on your new home, and you'll be able to get the keys and move in!
But there is still business to conduct and more paperwork to sign. If you're closing a standard home loan, you'll go in to sign at a title company, and the loan will close. Or, if you utilized a construction loan, you’ll get an official certificate of occupancy once the final payment is made to the contractors, which often comes with their releasing any right to a lien. At that point, your temporary construction loan will most likely roll into a more long-term and stable home loan, like a traditional 30-year fixed rate mortgage.
Congratulations, you are now the proud owner of your very own custom new home!
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Please contact The Alfano Group if you have any questions about buying a new home, or building your own!
