We know you’ve been doing loads of shopping lately—for presents, decorations, food, and more.
Yet before you proclaim yourself done with adding anything else to your cart, consider one last present for yourself in this season of giving: a new construction home.
We know you might have been trying to buy a home for months—only to be disappointed by the lack of listings, unfriendly mortgage rates, and sky-high prices. So you might think the holidays are a perfect time to take a break from house shopping.
Before you settle in for a long winter’s nap, you might want to check out move-in-ready and new construction homes.
December is typically one of the best months to take advantage of end-of-year builder incentives and snag a deal even Santa would envy. Read on for how to get a new home at a great price.
The new-construction basics
New-construction homes are typically in planned communities and built by homebuilder companies, independent homebuilders, and general contractors.
Typically, when you are looking to buy new construction, you pick an available model and then customize the home according to your preferences. The house is built to these specifications on the parcel you choose in the development, and when the home’s built, voila, you move in.
But we’re focusing on the existing turn-key, spec homes builders have already finished that you could potentially close on before the end of the year.
Why winter is a great time to buy
Since December is traditionally a slow month for home sales, local builders might offer more incentives to quickly sell the remaining homes in a community before the year’s end.
“Many builders continue to offer interest rate buy-downs specifically on finished, move-in ready homes,” says Cody Hunter, a strategic construction adviser at Real Estate Bees and the construction director and co-owner of Boise Hunter Homes in Boise, ID.
Many builders also tempt buyers with price reductions and closing costs assistance. They sometimes also offer rebates and discounts for members of the military, police officers, firefighters, emergency workers, and teachers.
But these sweet deals usually expire in January.
“Often, these incentives require a 30-day close and working with the builder’s financing division or trusted lender to qualify for the promotion,” says Hunter.
Understanding the lending process
Closing in a month might seem rushed, but one of the major pros of buying a new construction home is that many builders have their own lending company or work with preferred lenders.
So, instead of closing quickly seeming chaotic, the loan process is streamlined.
“It is advisable to either already be pre-approved with a reputable lender and to work with the builder’s lender of choice since they will understand the urgency,” says Hunter. “If a buyer wants to take advantage of the new-home holiday promotions out there, then the goal would be to get under contract and negotiate an extension of the promotion if you are unable to close in time.”
Still, it would be best if you didn’t immediately assume you’re getting the best deal with the builder’s preferred lender. Always get a few quotes from other lenders and compare lending terms.
Don’t make a deal without an agent
Driving into a new home development can sometimes feel like shopping in a Homes ‘R’ Us.
You see a house you like, take a tour, and buy it, so why would you need a real estate agent for a brand-new house if there’s no individual seller to negotiate with?
Hint: because the prices and terms of move-in-ready homes—even if already discounted—can be further negotiated.
And it’s simply smart to have an agent represent you and look out for your interests.
“Real estate agents are even more important in this scenario, as there are a lot of different moving parts when buying a new-construction home,” says Maureen McDermut, an agent at Sotheby’s International in Santa Barbara, CA. “Having your agent, as opposed to going through the builder directly or their agent, allows you to have an expert negotiate on your behalf, which will save you money.”
Last-minute buying tips
Just thinking about moving into a brand-new home and getting a good deal to boot makes you feel like a kid bursting with excitement on Christmas morning.
Still, before envisioning sugar plums in your sparkly new kitchen and hanging stockings by the fireplace fill your holiday dreams, it’s wise to make a list (and check it twice) before signing on the dotted line.
“Even if you are trying to have your home purchased in December, it is best not to rush through anything,” advises McDermut.
Do your due diligence, and seek reviews from those who have purchased from the builder to find out if they’ve been naughty or nice. Drive through the neighborhood to get a sense of the community.
“Although the home is new, an inspection is still highly advisable, as it could lead to finding items that can help when it comes time to negotiate your price,” says McDermut.
You’ll also want your agent to review the builder warranty for the fine print on the structural components and workmanship to find out what is covered and what isn’t.
December might be the month you finally find a house that fits just right for you.
