Keller Williams




Overview of the Process: Buying a New Construction Home

The New Home Construction is both complex and long. From start-to-finish, it’s going to take at least six months, and could take as long as a year. And it’s the most complex process you will likely ever find yourself involved with. Unless you work for the Department of Defense, in charge of designing and buying weapons systems, you have never experienced a situation as complex as building a new home. As one builder told us, “most people who build a new home say they will never do it again.”

The process doesn’t need to be bad however. In addition to helping others, we’ve built a couple new construction homes for ourselves. Not because we like pain, but rather because it can be really exciting to pull a finished home out of a vacant lot, designed to one’s own wants, needs, and tastes. We find the process, and the details both interesting and exciting!

To set the table, let’s just start with a brief/partial outline of the issues involved.. This is complex.

  • Hire your own professional real estate advisor/agent
  • Learn what size loan you can qualify for (you’re going to need stable finances for at least six months, and you’re going to need some patience); pre-qualify with at least one bank – two might be better
  • Select a region, a community, neighborhood and developer
  • Select a lot (this probably has an extra cost), a floorplan (included in the ‘base price’) and an elevation (this probably also has an additional cost)
  • Find out which bank(s) the developer works with and what financing incentives might be available to you if you use their preferred lender
  • Sign a build/purchase contract and pay a deposit (depending on developer, ranges from $5,000 to $50,000, plus additional deposits over time for various upgrades)
  • Select your structural upgrades (i.e., walk-in shower, covered balcony, service door from garage, etc). Structural upgrade selections must usually be set within 5-7 days of contract signing. Structural upgrades are ones that impact the structure (framing) of the house
  • Meet with your selected bank (or the bank required by the developer); start the official loan application paperwork
  • Developer pulls permits for construction
  • Set appointment with a ‘design specialist’ to select your finishes (i.e., cabinets, countertops, flooring, etc)
  • Groundbreaking for your new home – get a picture, it’s a big deal
  • Sign design upgrades and make additional deposit payment (often ranges from 20-50% of design options; usually must be completed within 20-45 days of contract signing)
  • After ‘trenching’ your lot, the developer will lay some pipe for wastewater and water supply, as well as conduits to get water, electricity, and gas to where they will need to be. Forms for the foundation will be built. The lot will be filled with a slurry mixture. Post-tension cables will be laid. And then the foundation will be poured
  • After the foundation has cured, the foundation forms will be removed, and the foundation will be allowed to set for and additional3-10 days. Early in this process, metal connectors will be added to the side of the foundation, and rebar will be installed to certain specific locations at which the frame will be bolted to the concrete
  • Framing wood and roof trusses will be delivered to the site
  • The foundation will be painted for base plate locations, and your structural upgrades will be noted onsite (you’re now about 30-45 days after contract signing)
  • Follow-up with lender, ensure all paperwork was submitted and received. Submit any additional forms as requested by underwriting
  • Base plates will be nailed into the foundation
  • Framing goes up (some builders will attach the frames and baseplates and then ‘tilt-up’ that structure to be nailed into place)
  • For multi-story home, subfloor for upper levels, and then more framing
  • Roof trusses installed
  • House structure bolted to foundation (re: lateral movement), secured at edges (re: vertical movement)
  • Window/Door headers installed
  • Sub-roof installed
  • Drywall delivered and placed in your framed house (to sit for at least a month)
  • Rain guards installed around window openings, and then windows installed
  • Roofing paper laid, and roof tiles lifted (but not installed) to roof (to weigh down and compress the new structure)
  • Plumbing rough-in and roof-cuts are made for plumbing/air ventilation
  • Electrical rough-in, Gas rough-in, Cable (tv/Internet runs wired)
  • HVAC rough-in, equipment, duct work is installed – wire and conduits to outside
  • House wrap (tar-paper like material) installed
  • Styrofoam like material applied to outside of home, and then chicken-wire and other material applied to home (to support stucco adherence)
  • Framing walk with the builder
  • Fire-caulking to prevent smoke/flow across floors, through attic
  • You will have an officialFraming Walk with the builder
  • … At this point, you can stand inside your framed house and feel like you’re in a solid structure. You’re about 8-10 weeks from completion, assuming contractors are being properly managed
  • Follow-up with lender. Ensure they have the final build/loan price, final contract from developer
  • From here, insulation will be installed, and then the drywall can be installed, the outside gets stucco, cleaned, texture-coated, painted, roof-tile is installed. Inside, base-boards are installed, inside is painted, flooring is installed, cabinets go in, countertops are installed, plumbing fixtures and sinks are installed, electrical outlets and lights are installed, thermostats installed, appliances are installed, etc., etc.
  • About 30 days before close, lock the interest rate with your bank (and select which bank you’ll close with, assuming you’ve been moving forward with the ‘builder’s preferred bank’ and your own back-up lender)
  • Get property insurance information to bank
  • About one week before close, check with bank on final issues; ensure the bank has the title information from the developer, as well as any homeowner’s association documentation required; the bank will determine the property tax bill
  • About 3 days before close, inspection walk with the builder. Also, about 3 days before closing, make sure you get ‘final disclosures’ from the lender, otherwise your closing will be delayed
  • Close on your new home
  • Wait 3 days to get the keys
  • Move in
  • 30-day inspection/corrective meetings
  • 6-month inspection/corrective meetings
  • 12-month warrantee issues