What to Ask When Buying a New Construction Home

A new construction home is a residence not previously occupied, typically sold by the builder. Unlike existing properties, new builds offer modern designs, up-to-date building codes, and customization, leading to fewer immediate repairs. Asking informed questions is important for a smooth transaction and satisfaction with the final product, helping buyers align decisions with their lifestyle, budget, and long-term goals.

Questions for the Builder and Community

When considering a new construction home, understand the builder’s background and the community’s future. Inquire about their years in business and the number of homes completed. A builder with a long-standing presence may offer more confidence they will honor warranties. Request testimonials or references from past clients for insights into their experiences.

Ask about the overall community development plans, including details regarding planned amenities like parks, pools, or clubhouses. Homeowners Associations (HOAs) are common in new developments, with roughly two-thirds of newly completed homes being part of HOA communities. Ask about HOA rules, services covered by fees, and the management structure.

HOA fees typically range from $200 to $400 per month, varying significantly based on amenities and location. These fees generally cover maintenance of common areas and shared facilities. Inquire about the projected timeline for community completion and any potential changes to planned amenities or fees. Knowing these details helps you understand the long-term financial commitment and lifestyle implications.

Questions About Home Design and Features

Understanding a new home’s physical aspects involves asking specific questions about its design and components. Inquire about the standard features included in the base price and available upgrade options. Builders often offer design palettes for elements like cabinetry, countertops, and flooring, with opportunities to add upgrades such as bonus rooms or enhanced outdoor living spaces. Clarify which features are standard and which require additional costs.

Ask about the quality and type of building materials used throughout the home. High-quality materials affect comfort, energy bills, safety, and long-term value. Inquire about insulation ratings and window types, such as low-emissivity (Low-E) glass, which can reduce heat transfer. Understanding these details helps assess the home’s durability and future maintenance needs.

Discuss the home’s energy efficiency ratings and features. New homes are often built with energy-efficient designs and materials, leading to lower utility bills. Ask about energy-efficient appliances and lighting, such as LED bulbs. Inquire about any smart home technology inclusions, like smart locks, thermostats, or security systems, and whether these come standard or as upgrades.

Questions Regarding the Purchase Agreement and Costs

The financial and contractual elements of buying a new construction home require careful review. An earnest money deposit, typically 1% to 5% of the purchase price, is usually required to demonstrate your commitment. This deposit is often applied towards your down payment or closing costs. Builders may have specific policies regarding additional deposits tied to construction milestones or design selections.

Inquire about financing options, including any builder-preferred lenders or incentives. Builders often partner with lenders who may offer incentives such as reduced closing costs, lower interest rates, or credits for design center upgrades. These incentives can range from $5,000 to $15,000 or cover 2% to 3% of the purchase price. Compare offers from multiple lenders to secure the most favorable terms.

A breakdown of closing costs is essential. These costs typically range from 2% to 5% of the home’s purchase price and can include lender fees, title insurance, and attorney fees. Unique to new construction, closing costs might include builder-specific fees, like administrative charges ($100-$1,000) or HOA transfer fees ($700-$1,400). Property taxes and homeowners insurance premiums for the first year are usually due at closing, with lenders often requiring prepayment for several months of taxes.

Clarify the estimated completion and closing timelines, and understand the purchase agreement’s terms and contingencies. The contract should outline responsibilities and a payment schedule. Ask what provisions are in place for construction delays, as these can impact your financial planning and move-in date.

Questions on Warranties and After-Sale Support

Understanding warranty coverage for a new construction home is important for future peace of mind. Most new homes come with a builder’s warranty, distinct from a home warranty or service contract. This warranty generally offers limited coverage on workmanship and materials. It is common for workmanship and materials on most components to be covered for one year.

Systems such as heating, ventilation, and air conditioning (HVAC), plumbing, and electrical typically have coverage for two years. Major structural defects, like foundation issues affecting the home’s safety, often have coverage for up to 10 years. Inquire about the specifics of what the builder’s warranty covers, its duration for various components, and whether it is backed by the builder directly or a third-party warranty company.

Ask about the process for filing a warranty claim and how post-closing service requests are handled. The builder should outline the steps for addressing defects that arise after you move in. Clarify if there are any manufacturer warranties on appliances, such as refrigerators, ovens, or washing machines, as these are typically separate from the builder’s warranty. Understanding these details helps you navigate any issues that may arise in the initial years of homeownership.

Questions About Inspections and Quality Assurance

Ensuring a new home’s quality and safety before closing involves understanding the builder’s quality control processes and the role of independent inspections. Inquire about the builder’s internal quality control procedures and how often inspections are conducted throughout the construction process. This helps verify that all steps are completed properly.

Ask if independent home inspections are permitted and, if so, at what stages they should be conducted. It is advisable to have an independent inspector evaluate the home, potentially at key construction milestones like the framing stage, before insulation and drywall are installed. This allows for identification of issues before they are covered up.

The pre-settlement walkthrough is an important step for the buyer. This walkthrough, often occurring about a week before closing, is when a “punch list” of deficiencies is created. A punch list is a comprehensive document outlining remaining tasks, corrections, or touch-ups needed before the home is considered complete. This can include minor fixes like paint touch-ups or more significant items.

Clarify how the punch list is created, who participates (typically the homeowner and builder’s staff), and the builder’s process for addressing these items. Documenting these items, possibly with photos, can aid clear communication and ensure that all agreed-upon corrections are made before you take possession of the home.