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New Construction Home Buying Process

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If it’s always been your dream to build your own home, you’ve come to the right place! Here’s everything you need to know about buying a new construction home. Discover how you can make your dream a reality. 

3 Different Types of New Construction Homes

All new construction homes are the same, right? Not necessarily. There are actually three different types of new construction homes that you should know about before you start the new construction home buying process. 

1. Custom-Built Home

Custom-built homes have the greatest amount of freedom and customization. You get to work with an architect to determine the floor plan, and you also work with a designer to choose your features.

And while this option definitely allows you to build your dream home, the process can be overwhelming simply due to all the decisions that you have to make along the way. 

2. Semi-Custom-Built Home

Semi-custom-built homes are likely what you think of when you think of a “new construction home.” These homes are common in new developments wherein the builders come up with a few different floor plans and styles to choose from. Then, you get to choose the details like the color of the kitchen cabinets, countertops, flooring, lighting, etc. 

3. Spec Home

Spec homes don’t offer any degree of customization. Instead, the builder decides which floor plan to build and what features to add before selling it to you as-is. If you want to make any changes to the home, you do so after purchasing it on top of the purchase price.

Spec homes may be the model home or a home that a buyer backed out of purchasing. However, more and more builders are regularly building spec homes simply to keep up with the demand for new construction homes. 

Pros and Cons of Buying a New Construction Home

Buying a new construction home comes with both pros and cons that you need to consider before you move forward with buying one. 


Some of the pros of buying a new construction home include:

  • Move-in ready: Buying a new construction home essentially guarantees that the home will be move-in ready and won’t require any changes or updates.

When you buy an existing home, the odds are that there will be at least a few items that you will want to change according to your own taste and style. However, you can design your new construction home to specifically fit your own taste and style. 

  • Fresh and clean: Buying a new construction home means that the home will be extremely clean since it’s never been lived in before. You won’t have to worry about deep cleaning the bathtub, refrigerator, vents, air filters, etc. when you move into a new construction home. 
  • Energy-efficient: Energy efficiency is all the rage these days, and this is something that new construction homes do well. They are built to be extremely energy efficient with proper insulation, windows, and appliances that can end up saving you a ton of money on your utility bills. 
  • Less maintenance: Since new construction homes are brand new, they will need less maintenance. For example, you won’t need to worry about replacing the roof or the HVAC system a couple of years down the road since they’re all brand new. 
  • Builder warranties: And if there ever are any issues with your new construction home, there are builder warranties that cover anything that happens to the home within the first couple of years. So, even if your HVAC system does break for whatever reason, you’re not the one responsible for fixing it. 


Some of the cons of buying a new construction home include:

  • Timeline: Buying a new construction home often requires an extended timeline, especially for a home that’s being built from scratch. Many buyers simply can’t wait six to nine months to move into their new home. 
  • Potential delays: Even though you get a general timeline for completion when buying a new construction home, there’s always the possibility of delays. Delays have become more common due to supply chain issues and labor shortages. 
  • Potential price increases: Buying a new construction home may also come with unexpected price increases. Builders tend to raise the prices of homes when the cost of supplies increases to avoid losing money. The price you think you’re paying might not be the price you actually end up paying by the end of construction. 
  • Added costs: Building a new construction home often comes with only the most basic features. For example, builders might not include seemingly standard items like towel racks, toilet paper holders, blinds, light fixtures, appliances, etc. You might have to address these items on your own or pay the builder extra for them. 
  • Lack of landscaping: Another thing that builders may not include with a new construction home is landscaping. Some builders don’t even include sod in the price of the house. Instead, that’s something you have to do on your own in addition to adding trees, mulch, bushes, flowers, etc. 
  • Higher taxes and fees: New construction homes often come with higher taxes and fees. Many new construction homes are located within a Community Development District (CDD).

A CDD charges annual fees to cover the cost of developing the community from the ground up. These fees, in addition to HOA fees, can easily add hundreds of dollars to your monthly mortgage costs. 

10 Steps to Buying a New Construction Home

If, based on these pros and cons, you’ve decided that buying a new construction home is the right choice for you and your family, here are the 10 steps you need to follow to make it happen: 

Step 1: Decide What Kind of Home You Want and Where

For starters, you need to decide what kind of home you want to buy and where you want it to be. Are you looking for a single-family home or a townhouse? Are you looking for a two-story or a one-story home? Do you need a certain number of bedrooms and bathrooms? Do you need space for a home office or a playroom? 

Next, you need to think about location as this is always one of the most important aspects of real estate. Think about locations that are convenient to your work. Think about locations that have good schools if you have kids. Think about locations that have easy access to grocery stores, restaurants, and more. 

Step 2: Get Pre-Approved for a Mortgage Loan

Now that you have a better idea of what you’re looking for, you should get pre-approved for a mortgage loan. Prepare for the pre-approval process by gathering documentation like pay stubs, bank statements, income tax returns, and W-2s. Be sure to get pre-approved by several different lenders so that you can get the lowest possible interest rate. 

Step 3: Find a Buyer’s Agent

With your pre-approval in hand, you should now find a buyer’s agent to help you find and purchase your new construction home. Contrary to popular belief, you should still use a buyer’s agent when purchasing new construction.

Buyer’s agents can provide you with valuable insight and information into the process. They can also negotiate with the builder on your behalf so that you can get the features you want for a favorable price. 

Step 4: Look Into Builders and Communities That Meet Your Needs

Your buyer’s agent can help you look for builders and communities that meet your needs, but you can do your own research as well. Most of these builders have websites that you can visit to see their local communities, floor plans, and amenities.

If you’re looking in a specific area, it might be helpful to drive around. Take note of the different communities being built so that you can research them later. 

Step 5: Consult Builders About Pricing and Availability

Once you have a condensed list of builders and communities you’re interested in, you can start reaching out to the builders for information about pricing and availability.

Some builders will advertise a “starting price” when in reality, the home will cost tens of thousands more than that for the lot premium, design features, and structural features. A handful of builders may also advertise communities that don’t actually have any availability left. 

Step 6: Schedule Tours To Look at Model Homes and New Development Communities

After verifying pricing and availability with the builders, you can schedule tours to look at model homes. Your buyer’s agent should attend these tours to provide advice and insight. Just keep in mind that these are “model” homes that often include extra features that don’t come with the base price of the home. 

Also, make sure to go beyond the model home and check out the entire community. Take a drive around and look at the parks, pools, and playgrounds. 

Step 7: Make Your Decision and Start the Building Process

By now, you should have all the information you need to make your final decision and start the building process. You will select your floor plan and lot before signing a contract and putting down a deposit of 5% to 10% of the purchase price. 

Step 8: Design Your New Home

With your floor plan and lot finalized, it’s time for the fun part — the design process. Depending on the type of new construction home you’re buying, you may be able to choose different elements like paint colors, flooring types, cabinet colors, countertop types, and more. You can also choose to pay more for upgraded designs and features. 

Step 9: Schedule the Home Inspection and Walkthrough

Once the home has been built according to your specifications, you’re ready to schedule the home inspection and final walkthrough.

Yes, even new construction homes need an inspection to make sure that they are built to code. Walk through the house before closing to make sure that everything in the contract has been completed. 

Step 10: Close on Your New Home

If the inspection and the walkthrough go well, it’s time to close on your home. On closing day, you will finalize your loan agreement, pay your remaining costs and fees, and become the official owner of the home. After that, you’re all set to move in and start enjoying your home. 

Finance Your New Construction Home With Vaster

Don’t delay the purchase of your new construction home and apply for financing with Vaster today. Vaster offers expedited closing time frames so that you can purchase and close on your new home without a hitch.

Reach out to our lending experts for more information on our loan products, policies, and interest rates. 

Vacant land financing with no max loan amount Get a quote  


The Pros and Cons of Buying New Construction |

Hidden Costs of New Homes That Can Burn Buyers | Investopedia

Everything You Need to Know About Spec Homes | House Beautiful

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