Buying New Construction in Arizona? Here’s the Advice I Shared With Redfin

Buying New Construction in Arizona? Here’s the Advice I Shared With Redfin

Buying a brand-new home sounds pretty straightforward.

You walk into a beautiful model home, pick the floor plan you love, choose some finishes, sign some paperwork and wait for your new house to be finished.

Except that is definitely not the whole story.

I recently had the opportunity to contribute to a Redfin article about buying new construction as a first-time homebuyer, and the advice I shared focused on one of the biggest misconceptions I see with buyers considering a new build.

The builder is still the seller.

That sounds obvious when I say it that way, but it is incredibly easy to forget when you're walking through a model home and talking to a friendly salesperson who knows everything about the community.

Redfin included my advice in its guide, Buying a New Build? What to Know as a First-Time Homebuyer, along with advice from other real estate professionals about budgeting, researching builders, financing and choosing upgrades. Redfin

And if you're considering new construction in Mesa, Gilbert, Queen Creek or San Tan Valley, this is something I want you to understand before you ever walk into a model home.

The builder's sales rep works for the builder

This was the main point I shared with Redfin.

When you buy a resale home, it usually feels pretty obvious that there are two sides to the transaction. There is a seller and a buyer.

New construction can feel different because you're dealing with a company instead of the person who currently owns the house. But there are still two sides.

The builder is the seller.

The salesperson sitting inside the model home represents the builder. Their job is to sell that builder's homes.

That doesn't mean they're doing anything wrong. It simply means they aren't your real estate agent.

This is one of the reasons I want my buyers to contact me before they start visiting new construction communities. Some builders have specific policies regarding when and how a buyer's agent must become involved in the transaction. You don't want to discover after registering that you've unintentionally changed your options for representation.

That advertised price may not be the price of the house you actually want

This is probably the second biggest surprise for first-time new construction buyers.

You see:

Homes starting from $499,990!

Great. You have a $500,000 budget.

Then you discover the homesite you want has a lot premium. The kitchen in the model has upgraded cabinets. Those countertops aren't standard. Neither is that flooring. Or the lighting. Or the backsplash.

Depending on the builder and home, you may also need to budget for things like window coverings, appliances, backyard landscaping or other items after closing.

Suddenly we're not talking about the same number anymore.

Redfin makes this point in its guide as well, noting that first-time buyers should account for the purchase itself as well as closing costs and other expenses associated with building and owning the property. Redfin

This doesn't mean new construction is a bad deal. Far from it.

It means we need to compare the real price of the home you're buying, not just the number on the builder's sign.

Builder incentives can completely change the math

This is where buying new construction in the Phoenix area gets particularly interesting.

Builders may offer incentives tied to financing, closing costs, upgrades or inventory homes. Those incentives can sometimes make a new construction home surprisingly competitive with a resale home.

But I don't want a buyer choosing a house because the incentive sounds huge.

A "$30,000 incentive" gets your attention. What matters is what that $30,000 actually does for you.

Can it be applied toward closing costs? Is there a financing incentive? Does it require the builder's preferred lender? Is it available on every home or only certain inventory? What happens to the purchase price?

Those are the questions we need answered.

I care much more about your final numbers and monthly payment than the size of the number printed on a builder's flyer.

Not every upgrade belongs in your mortgage

Model homes are dangerous.

I say that with love.

They're designed to show you what the house could look like, and it is very easy to start adding upgrades because an extra few thousand dollars doesn't seem enormous compared with the price of the entire house.

Do that enough times and you've added a significant amount to your purchase price.

I generally want buyers thinking differently about structural choices versus cosmetic ones.

Something that would be expensive or difficult to change later deserves serious consideration during construction. A cosmetic feature you could reasonably change after closing may not.

And remember, financing an upgrade as part of the home means you're potentially paying for that choice over the life of your mortgage.

That backsplash suddenly deserves a little more thought.

Yes, I still recommend inspecting a brand-new house

"But it's new."

I know.

Get the inspection.

New construction doesn't mean humans weren't involved in building it. Things can be missed, installed incorrectly or need adjustment.

An independent home inspection gives you another set of eyes on the property.

This one is also personal for me. When I bought my first home in Southern California, we skipped the inspection. It was an REO fixer-upper and my inexperienced agent never told us we needed one.

We later discovered mold and plenty of other issues.

When we bought our Arizona home, we absolutely had an inspection. We still discovered things after closing because an inspection isn't a guarantee that every single problem will be found.

I would still never voluntarily skip one again.

First-time buyers absolutely can buy new construction

There is a misconception that new construction is somehow reserved for experienced buyers or people with enormous budgets.

It isn't.

Redfin's guide specifically looks at new construction from the perspective of a first-time homebuyer and covers traditional mortgages as well as financing considerations for homes being constructed from the ground up. Redfin

Here in Arizona, I regularly look at both new construction and resale homes when helping a buyer figure out what makes the most sense.

Sometimes the resale house wins.

Sometimes builder incentives make the new build much more attractive.

Sometimes we walk into a community thinking it is perfect and realize the numbers don't work at all.

That's why I don't start with new versus resale.

I start with what are you actually trying to accomplish?

Then we compare the options.

Looking at new construction in Mesa, Gilbert, Queen Creek or San Tan Valley?

Please call me before you register with the builder or start touring model homes.

We can look at communities, available inventory, builder incentives and resale homes together and figure out which option actually makes sense for your budget.

You don't need to know which builder you want.

You don't need to know exactly where you want to live.

And you definitely don't need to understand every part of the new construction process before calling me.

That's my job.

Gale Culver, REALTOR® | ΓEA⅃ Broker
Mesa, Arizona
909-380-2122
gale@arizonarealestatexpert.com
ArizonaRealEstateExpert.com