1. The cost of upgrades
One of the biggest mistakes buyers make is underestimating the cost of upgrades. It may be tempting, but it’s more cost-effective to invest in structural improvements that cannot be easily changed later, such as framing modifications or window placements. Cosmetic updates like flooring, paint or finish work can sometimes be done after closing at a lower cost.
Buyers often assume what they see in the model home is what they will get, however, model homes are designed to showcase high-end upgrades. It’s important to clarify which features come standard and which require additional investment.
Buyers should also budget for post-closing expenses such as landscaping, window treatments, built-in cabinetry and appliances that may not be included. Transfer taxes, title policies and potential appraisal shortfalls should be considered.
2. Negotiating the listing price
Another misconception is assuming the listed price is non-negotiable. Many builders offer incentives or are open to negotiating closing costs, lot premiums and other expenses. Having an experienced realtor can be invaluable in identifying these opportunities and advocating on your behalf.
3. New build vs. older homes
Purchasing a new build ensures that all mechanical, plumbing and electrical components are up to current codes. New builds come with builder warranties and construction quality may vary due to labor shortages, and delays can occur.
Existing homes may offer immediate cost savings, such as established landscaping and built-in features. Although down the line, they may come with older mechanical systems that could require costly repairs.
4. Red flags
Choosing a reputable builder is crucial. Transparency in the process and clear communication can make or break the experience. Buyers should ensure they have direct access to their building superintendent to stay informed. Each builder has its own purchase agreement. Working with a knowledgeable realtor is essential to understanding contractual obligations and contingency timelines.
5. Negotiating with the builder
In addition to negotiating price reductions, buyers can also discuss lowering the costs of design incentives, closing cost assistance, lot premiums and even rate buy-downs when using the builder’s preferred lender. For quick move-in homes, closing dates can also be adjusted.
6. Understanding builder incentives
Buyers should carefully review incentives. Many incentives are tied to using the builder’s affiliated lender or title company, which may have specific requirements or deadlines.
7. Interest rate hikes
Interest rate fluctuations can significantly impact affordability during a lengthy build process. Some builders offer extended rate locks or float-down options to help buyers manage this risk. If no rate protection is available, buyers should ensure they still qualify for their mortgage in case of a rate increase.
8. Third-party inspections
Although city and county inspectors verify code compliance, hiring an independent home inspector can provide additional peace of mind.
9. Construction delays and final walkthroughs
Construction timelines are fluid and delays can happen. Buyers should avoid scheduling movers or finalizing logistics until the builder confirms the closing date. It’s essential to test appliances, plumbing, garage doors and fixtures during the final walkthrough while documenting any cosmetic issues like paint touch-ups or stucco repairs.
10. Builder warranties and post-move-in concerns
Builder warranties vary but typically cover different aspects of the home over specific time frames. Buyers should document any post-move-in concerns in writing and follow up persistently with the builder’s warranty department.
11. Why you need a Realtor
A realtor is a vital advocate throughout the new-build process. While the builder’s sales team represents the developer, a buyer’s agent works solely in the buyer’s best interest. In cities like Las Vegas, where new construction is prevalent, partnering with an experienced real estate professional can make all the difference in securing the best deal and avoiding costly mistakes.
Buying a new construction home is an exciting but complex process. By understanding potential pitfalls, negotiating strategically and working with an experienced realtor, buyers can make informed decisions and enjoy a smooth path to homeownership.
Darren and Karen Pohl are real estate professionals with The Pohl Group at huntington & ellis.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: [email protected].
