Buying a house under construction is a more viable option now than it has been in the recent past. That’s because a lot of builders are undertaking to fill market needs due to the limited inventory of current homes for sale. Mortgage rates in the mid-sixes have kept some potential home sellers staying put so as not to relinquish a low mortgage rate for a higher one. Here are two reasons your clients should consider buying a home under construction, as well as two reasons to pass on the option.
Pro: It’s brand new
Who wouldn’t like to be the first owner for most anything? For a house, that means everything should work perfectly, with no repairs, painting or replacements of anything needed for years. Appliances will likely be state of the art and energy efficient, landscaping will be pristine and it will be the ultimate plug-and-play move-in situation.
Con: Timing may be off
If your client has a short window to move into a new home, buying new construction or a home that’s still being built might not be the right decision. Buyers of homes being built must have flexibility, as there are often delays before completion. So trying to time a move to get kids into a school system or other desire can be problematic.
Pro: It’s customizable
Assuming the house is not almost completed, a buyer can have great input into what they want. Appliances, paint colors, some building materials, a myriad of details and even room sizes can be chosen or altered if the builder allows. Again, the move-in date will usually have to be flexible to allow for more time needed to finalize.
Con: More expensive
It’s no surprise that buying something new costs more than a used version, including a house. While the median price of a new home in November 2023 was $434,700, the median cost for an existing home during the same month was $387,600, according to the National Association of REALTORS®. That’s a decent-sized chunk.