New Construction Home Buying Process; A Step by Step Guide
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- čas přidán 14. 08. 2024
- New Construction Home Buying Process; A Step by Step Guide
So, you are considering buying a new build home but you just aren’t sure where to start, or what the process even looks like, and perhaps you are already overwhelmed and you haven’t even begun your search yet.
In this video, I lay out for you, in step by step detail, the entire new construction homebuying process from beginning to end and clear up any confusion you may have.
0:00 Intro
1:08 Preparation
3:18 Visit Sales Office
4:25 Model and Lot Selection, Structural Upgrades, Elevation and Color Choices
7:48 Purchase Contract
9:20 Design Center
10:05 Pre Construction Meeting
10:34 Frame Walk
12:07 Final Walkthrough
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Hi there! My name is John Ferrin and I'm a full time Realtor in Queen Creek Arizona serving the entire Phoenix Metro Area with an emphasis on the South East Valley. I'm a retired Police Officer, husband and grandfather, and Harley Davidson fanatic.
Connect with me:
WEBSITE: www.eastvalleyproperties.net
FACEBOOK: Facebook.com/eastvalleyproperties
INSTAGRAM: johnferrin_realtor
LINKEDIN: linkedin.com/johnferrin
Thanks so much for watching my videos as I try to help you learn more about Real Estate in the Queen Creek area.
John Ferrin, Realtor
HomeSmart Lifestyles
480-458-7399
john@eastvalleyproperties.net
Not in your area but the great information you shared is universal!
Builders in my area, (D.R.H and others) are going straight Inventory Selection now, No design center, all interiors are going to be the same. Just signed on a cancelled contract.
This was very informative.
Thank you so much 🙏🏾
Great Video! Thank you again John!
Thanks for the info it was very informative and gave us an idea on what to expect on our new build.
Thanks for watching!
This was awesome! Going through the process with my husband and we got pre approved but thought we needed a different construction loan for the new construction home. Our realtor is helping us every step of the way and we’re so grateful.
Clear straight to the point video, thank you
Thank you! You are so awesome!
Thank you! I’m in the beginning stages now, I have a preapproval and a home I love but on the waiting list. This video is very well explained and answered all of the questions I had.
If you are here locally and are not working with an agent already, feel free to reach out to me.
@@LivinginQueenCreekArizona I’m in the state of Florida but your vlog really helped me to understand the process.
@@Myname211 Glad I could help!
Thank you!! Very informative
Very informative!! Thank you 😊
Thank you. ✨🙏🏾✨ Such great tips and information. ❤️❤️❤️
Very informative, Thank you
this is so helpful, thank you!
Very well explained, but it all still seems a little overwhelming. Oh boy!
Another reason you need to have a Realtor representing you. We can hold your hand and explain things through the process as much or as little as you need.
Great video!
great video, lots of info thanks!
Thanks for watching!
A few points I believe you missed. The earlier the phase, the cheaper/more options you will receive. I got a $15,000 incentive for being early enough, I hear they’re only giving $10,000 now. Got my corner lot that’s also slightly larger than the others. Being part of the earlier phase, i skipped the current bid/offer wars that is currently occurring in my neighborhood; currently waiting on permits and my house’s floor plan is already up $30k with 20 people waiting on the next lot release (Seattle Metro / Puget Sound).
All good points, for sure. These days, at least in my area, being early in the project doesnt relive you of the competition. It is rare for lot releases to not include a waiting list or lottery. One thing for sure that you mentioned is the sooner you get in on a new build, the better your pricing will be. I know of one community where the first buyers are just now closing and moving into their new homes and the prices have in creased $40K since they bought.
Thanks for watching!
@@LivinginQueenCreekArizona this is exactly where we are. Put a down payment on a home in Verrado back in august for $320K. Our model is now going for $420K!!! Bad thing is, it’s taking forever to be built!!, We haven’t even done our drywall walk through yet and we were told in August our estimated closing would be end of March. Now it’s been pushed back to mid May but that doesn’t look like it’s happening either. So frustrating!!
@@DebiDan Know that you are not alone. Lumber prices have soared, supply chains have been interrupted, and worker bees are hard to find and that all combines into limited resources all being accessed bythe same builders. Lots of delays.... But, $100K in equity is a nice consolation price, right?
Thanks John you did a great job explaining 💪🏾
Thank you!
Thank you! This was really helpful :)
Glad I could help!
Great information. We appreciate it
We're taking the initial steps now, so this is super helpful. I saw you mentioned to someone else that the initial mortgage payment is typically due one month after we move in. This part seems the most daunting to me, as we have to time the selling of our current home and take the estimated $300k in equity and apply it to the principal of the new construction home. With the market slowing a bit, it's a scary thought when it comes to trying to quickly sell our current home as the move-in date approaches. Any advice, or this just simply the nature of the beast?
Timing a simultaneous closing between the two homes is always tricky. You may want to consider selling your home sooner rather than later and make temporary living arrangements until the new one closes. It's inconvenient but it ensures you have the necessary funds to close on the new house. Thanks for watching!
The builders in my area is DR Horton. 🤔
They are the nations largest home builder by production numbers. They spit them out as fast as they can.
Thank you! Amazing video!
Thanks for watching!
Thank you
Thanks for watching!
When do negotiations usually take place in a new construction home? Does this happen before signing the purchase contract?
There are very few points that builders will negotiate on but for the most part, those all occur prior to signing the contract.
Can you do a video on what this process would look like if you are buying a home in cash?
The process is the exact same with the exception of the pre-approval process. Instead of getting pre approved by the builder's lender, you would need to show "proof of funds", which would be a bank statement, Investment account statement, etc.
Thanks for watching!
I live in Queen Creek and I am in the process of building a home. Is their any way the earnest money can be refunded due to change of mind, lost job, personal issues divorce etc??
John can you go over the closing, is that where you pay closing costs? Can you explain how builders sometimes give you money towards closing costs? Thank you, Johanna Bonnell
Hey there Johanna! Alot of people tend to think that signing and closing are the same thing, and in some states they are, but not here in AZ. Signing occurs anywhere from 0-3 days prior to closing, which is the actual recording of the transaction with the County Recorders Office and the transfer of ownership of the property.
At your signing appointment you will be signing all of the loan docs and other paperwork related to the purchase. You will have two bags of money with you (figuratively). One will be your down payment and the other covers your closing costs, and both bags are separate from each other.
Closing costs are the expenses incurred in obtaining the loan, escrow fees, pre paid taxes, HOA transfer fees, etc. Closing costs vary but you should plan on having about 3% of the purchase price in the Closing Cost bag. You will also, in most cases, have that much or more, in the down payment bag as well. At signing, you will hand over both bags of money to the escrow officer, usually in the form of a single Cashiers Check or a wire transfer.
When purchasing a new build home, often the builder will offer a particular dollar amount, or a percentage of the purchase price, as an incentive to use their preferred lender, that is applied to your closing costs. For example, they may give you $5000 towards your costs if you use XYZ Lending, and the incentive amount is usually enough to cover all of the closing costs.
Sounds great, right? That's 5G's you don't have to spend out of pocket. And often, it is a good deal but you need to be aware of a few things. The "preferred lender" is often an affiliated or sister company of the builder and your interest rates will be a tad higher than you might get from your own lender, and the associated fees are probably higher as well. I mean, that $5000 has to come from somewhere, right? And, it's not going to be from the builder's generous deep pocket....
That being said, it's not often that an outside lender can beat the "preferred lender" when you figure in the $$ incentive so I usually encourage my buyers to use the builder's lender and take advantage of the incentives.
@@LivinginQueenCreekArizona Thanks John! I love your videos and I did give your name to a guy retiring in 5 years or less and GETTING THE HECK out of CA!!! I sent him your videos!!! He was pretty excited.
Why do builders require 1% earnest and another $20K when buyers sign the purchase agreement. Is this common?
My question is, with an open concept homes, how open can open be, seeing the cost of homes cost is outrageous and supplies are short
So my question is, is it possible to build a home let's say, 1,500 sqf with 1 bathroom and 1 bedroom with a wall of a few cabinets and a sink
Could one get a occupies permit
And then build the rest of the house as drawing myself
You cant do that with a production builder. You have to adhere to their floor plans and selected options and the house must be complete before you can occupy it.
They just make it hard for people to get something like we would like, a New very basic 1970 ranch style home for under $300. Being in the construction field, some of us know guys that would do things at a 1/3 of the cost or just do it ourselves,
No one builds simple homes these days, and they all have vaulted celines no walls, and it seams that anything else then their cookie cutter homes that they know goes from like $175. sqf to well over $200 qsf because it's custom, so that's why I asked less would be more to me
Is it best to get a 3rd party final inspection. Before or after the introduction to the home.
Some people do and most do not. If you have had a bad experience throughout the build, you may want to have an independant inspection done prior to taking possession of the home.
We are building a new home. It will be done by September. I am wondering if we can rent it out right after receiving the key or we need to live there for a certain amount of time before rent it out? Thank you and thank you for the video.
For an exact answer, I would refer you to your purchase contract. I certainly don't have enough information to give you legal advice but in a very general sense, some builders required you to live in the home for a year.
Thank you very much?
Thank you very much!
@@LivinginQueenCreekArizona , i thought, your building contract ends when you get the key... And how can it regulates your further actions? Most likely a mortgage agreement will regulate itt.
Thank you, John. Totally new to this, when do you start paying mortgage on a new build? Once they start building or once you get the keys?
Your first mortgage payment is usually due a month after you get the keys.
What if I’m buying out of state and can’t come to every meeting? Do they do video walkthroughs?
I have a lot of out of state clients and and zoom meetings are available as well as facetime and regular phone calls. I also send pictures and video to my clients regularly so they can watch the progress being made.
Great video.
When viewing a listing price for a new construction on a site like Zillow, is that price with all the upgrades or the base price with no upgrades?
That price is the base price because the final price is determined by the buyer by how much or how little they upgrade. Most buyers spend 12-15% of the base price on upgrades. Thanks for watching!
Our earnest deposit will be the lot premium + all upgrades. Does this seem excessive? We’re purchasing in Reno, NV and purchase price will be 397k without upgrades.
I cant say if that is excessive or not because I dont know what the actual numbers are but, in our market, on a $400K purchase you would probably be in the $5000+/- range for an earnest deposit. Hope that helps and thanks for watching!
What are you thoughts on Lennar builder?
Lennar is a good builder. I think they offer design packages rather allowing the buyer to pick and choose what upgrades they want.
When does underwriting occur with new builds?
Im sorry...It looks like I missed your question. If you are referring to the loan, it takes place closer to the end of the build process so that you are all set and ready to close on the loan at the appointed time.
This is very informative! Thank you! Do builders offer backyard landscaping as part of their options? And how expensive is that in average ?
Not usually..... And as for pricing, that totally depends on what all you do. A very basic package might be $4500 or you could easily spend $50,000 or more on something more elaborate.
Tylenol lol🤣
Do you know about the time line, how long is the total process?
From contract to close it takes 9-12 months depending on the size of the home. The first 1 or 2 months you wont see any activity because there is a permitting process taking place behind the scenes.
@@LivinginQueenCreekArizona thank you so much
John- if I use a realtor how do I pay them? How much is it let’s say on a $400,000 new construction home?
Thats a great question. In almost every case, the builder pays the buyers agent so there is no out of pocket cost to you. The builder has already figured that into his expenses long before breaking ground on the community.
Apparently I have a bad builder half of this not being done...
Reduced prices coming. 27-40% watch!
And what do you base that on?
@@LivinginQueenCreekArizona not what I’ve based on it’s the numbers that are predicting. It’s all out there. Look.
About how long after the frame walk till the home is completed?
It's usually about three months unless they run into delays.
@@LivinginQueenCreekArizona Thank you for your response that’s what I was thinking/estimating. I’m in the framing stage and trying to figure out when I should list/sale my current home. My builder has been awful with communication and giving any kind of timeline.
@@jtgg1680 If you are here locally and don’t already have a realtor to help you sell your home, I know a guy...😉
@@LivinginQueenCreekArizona If I was in your area I would definitely give you a call. I’m out in California though 😉
Do you working in Texas dear ?
You forgot the final step and most important - after you get your keys, get ready for daily arguments with spouse, followed by depression for giving someone a chunk of your hard earned money and paying a mortgage you can't afford
Wow.....sorry you had such a bad experience. Thats not how it typically goes.
Nope, it didn't happen to me. Stating what happens in many families. We are waiting and saving to buy cash. Key to all is 1) Making sure one has 6 -12 months emergency money saved after the buy 2). Buying a house not more than 20% of family. 3). Don't engage in house war, when people are rushing for things, pull back.
Super informative. Thank you so much!