Considering buying a new home but don't know where to start or what is involved? Look no further! Buying new in Central Texas has never been easier. Here are some answers to some of my favorite Frequently Asked Questions.
How long does it take to close on a new home contract?
That all depends on the current stage of the new construction home and the builder's timeline which can be delayed by weather. The buyer's financing can also delay closing if not managed properly. Building from ground up can take as little as 4 months and up to 8 months or more depending on the builder. If you choose a home that is currently under construction, expect 1-3 months, and if the home is completed, you can close in as little as two weeks, assuming your financing is complete.
How do I search for new homes?
The best way to search new homes is right here on my new home website by clicking the widget below - this is my new construction home search where you can learn more about the builders and the communities they build. You can save homes you like, thumbs down homes you don't like, ask me questions through the site (you can call too...). At the same time, I can see what you like and get to work.
What are the benefits of buying a new home?
Energy efficiency, universal design, modern features, smart home technology, warranties, builder incentives to buyers (can cost less to get in and be more likely to accept a contingency to sell other property), CLEAN and that new home smell of course. The cons, well the neighborhoods are not as established - the trees are shorter, and construction can be going on all around you for some time to come, your taxes may be a little higher to include a MUD tax, may lack the character and charm of older hoods, sometimes located further out creating longer commutes. Truthfully, I'm torn and that is why I like to show my clients new and existing homes so they can make the best decision for their household.
Can I visit new home communities without a real estate agent?
Yes you can, however I recommend having your agent schedule appointments for you with the onsite sales representative of the builders you like within the areas and communities you like. This way, your time is spent most efficiently as the sales rep can plan for your visit and show you only what fits your criteria. If you cannot resist popping in to see the model home, go for it, but please be sure to let the sales rep know if you are working with an agent.
Why should I work with an agent if I am buying new construction and can communicate with the sales rep directly?
There are many intricate details involved in the real estate transaction, and having an agent represent you streamlines the process for you, at no cost to you. As with the sale of existing homes, as a buyer, when you work with me you do not pay realtor fees at all (true all the agents I know). The seller pays brokerage fees (real estate commissions) and this is written into the contract as well as your Representation Agreement. Your realtor is paid by the builder after you close on your new home. Additionally, the sales rep works for the builder, not you which means your best interest is second to that of the builder. Your realtor will work with your lender to assure your loan is progressing as it should, work with the title company to assure all necessary documents are in on time and the lender's closing instructions are received. Your realtor will be with you every step of the way, and trust me it can get stressful. I have had clients ready to quit and walk away from their earnest money after getting their loan conditions from the loan processor. Thanks to my background in mortgage lending, I was able to walk them through and work with the lender to get what was needed to satisfy underwriting. You want an agent representing you!
Can I get a loan from my bank for a new home?
You can. If you are just starting to plan, I recommend applying with a reputable local lender who specializes in mortgages. There are many reasons for this and the most important reasons are customer service and closing on time. When you work with a local lender who your agent refers you to, you receive a different level of service that is the result of strong communication, attention to your needs, and an unwavering persistence to meet your next milestone.
Some builders have their own lender that they prefer buyers use when purchasing a home from them, and there are usually incentives involved paying some of the closing costs for the buyer, paying title policy, and sometimes the first year of HOA.
If you are uncertain if you want to purchase new build or an existing home in an established neighborhood, connect with a lender now and get your application rolling. It's never too early, and there is no cost or obligation to pre-qualify. By doing this as you begin your online search, you will know for certain what you are qualified to purchase.
Here is a link to my friend and lender's online loan application. Alejandro Juarez is a local lender who I know will take excellent care of you. You can fill it out, he receives notification and you will get to work with him to pre-qualify. It is possible, even with the builder incentives to buyer, an outside lender such as Alejandro can offer you a better deal.
Do I have to sell my current home before I buy a new construction home?
No you do not. We will work to negotiate a contingency that allows us plenty of time to sell your home. This is most doable on a home that is currently in the PLAN phase, which means it's dirt. For homes that are near completion, the contingency will expire much sooner but still plenty of time to sell with proper planning and marketing that works. For homes that are complete, sometimes the builder will not allow a contingency to sell. This doesn't mean you can't contract on the house, it just means the contract cannot be contingent upon the sale of other property which in turn means you must qualify for your mortgage counting both payments or be purchasing with cash.
What is the typical amount of earnest money required on a new construction home?
Earnest money down payment varies by builder and community and can be up to 2% of the sales price. Usually it is closer to 1%, and sometimes it is a flat rate of $500-$2500. Earnest money is due at the time of contract and the builder will NOT hold a home for you to run and get your checkbook. If you opt for upgrades to your home, additional earnest money may be required. If you are using a loan that does not require a down payment (VA or USDA in qualifying areas) or offers down payment assistance, you may be able to receive a refund of your earnest money at closing. Your agent can help you with this.
What if I change my mind after I have entered into contract with a builder? Can I get my earnest money back if I see that I cannot afford the mortgage payment?
Not usually. Once you write that check, it's gone unless you cannot obtain financing, in which case the lender will provide a loan denial letter to the builder. The builder will terminate your contract and refund earnest money within 30 days. If you just change your mind, the builder will not refund your earnest money, even if it was yesterday. So be sure when you enter into contract with a builder that you know from your lender what your payment will be with Principle, Interest, Taxes, Insurance and HOA. Do not write the check until you do. This is why you get pre-qualified now and know what you can afford for total monthly payment before you fall in love with a house and want to enter into contract right away before someone else gets it.
Do I get to pick out all of my finishings?
Depending on the builder and the construction phase the home is in, you may be able to choose some of your finishings and opt for upgrades. Some builders offer a standard package and therefore you do not have a choice, and others offer choices in color scheme, flooring, kitchen upgrades, optional rooms, outdoor spaces and more. If you purchase a home that is already built, the builder usually cannot make changes. If you start from scratch, you can choose a builder that allows you to pick your finishings and upgrade features. Important to note, upgrades add to the cost of the home and should be limited to keep the home within comparable price to others in the community. If a buyer adds more than 10% of the base price in upgrades, it is likely the home will appraise below the sales price, which will leave the buyer paying the difference if the loan will allow, or the contract terminating. Most builders will limit your upgrades, and your agent will help you with these decisions.
Are my taxes higher in new communities?
Your taxes may be higher, but not always. This will depend on if the community is on city utilities or receives services through a Municipal Utility District or MUD. A Municipal Utility District is set up to by a developer to fund running utilities to the community. A MUD tax is applied to your tax bill to pay back the expense of the MUD. For example, if you buy in Williamson County MUD #12, you will be assessed .85% on your tax bill. In Rancho Sienna, this contributes to a total tax rate of 2.95%
What are typical HOA dues in new communities?
Expect to pay $30-50/month in the Austin area for a community that offers amenities such as pools, trails, parks, fitness center, common grounds maintenance, and security.
Can we find multiple lots next to one another for my family members or friends to buy near me?
Yes, it is possible to find a community in early phases of development with lots to choose still available, side-by-side. This is a smart way for families to enjoy the benefits of multi-genenerational living without being in the same house, and is ideal for friends graduating college or moving to the same area who want to live near one another. The freshest new communities can allow buyers to choose their lots and build from the ground up using one of the community builders. There are usually limitations with floorplan and elevation for a particular lot, which means the floorplan you love may not be available on the lot you love. Your agent can help you find the perfect cluster.
Are there any acreage neighborhoods with lots still available?
Yes 1 acre home sites are popular in rural areas of West Williamson County.
I hope this helps further your decision one way or the other, and remember you can always look at both to decide. Go ahead and get started with your search by clicking on the new home image above or call me and I'll get you going.