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Real Estate

How Do Closings For New Construction Homes Work?

Before closing on a new home, you should understand the process of moving into a new home. A buyer can inspect a home before closing and go through the home builder’s punch list for any missed repairs. The builder will also explain how the home will work, and the buyer must confirm that final repairs have been made before closing.

Move-in Ready Homes

A move-in-ready home does not require extensive remodeling or repair work. This type of home is ready for you to move into without waiting for a real estate agent to complete the job. It may need a few minor touches, such as fresh paint, but nothing that would keep you from moving in immediately.

A move-in ready home is also called a quick delivery home. This type of home has been built and is prepared to move in. This is excellent news for those who don’t have much time to settle into their new home. Often, buyers can move into a new home as soon as it is listed for sale. However, new construction often doesn’t include the refrigerator and washer/dryer, and it may take six to ninety days to complete the financing process.

Pre-selected Floor Plans

A pre-selected floor plan is an excellent option for new construction homes. A home builder creates these plans, so you don’t have to spend time selecting one. Instead, the builder can present them to you for approval before the home building process.

Choosing a floor plan that includes the features you want is one of the best ways to customize your home. So whether you’re looking for a contemporary kitchen or a ranch-style home with a finished basement, you can build your home with the floor plan of your dreams.

HOA Regulations

While these may seem intimidating, these are common courtesy. Here are a few examples of the rules you may need to know. The covenants and conditions, or CC&Rs, are often the most important documents that govern a subdivision.

HOAs are members who pay dues to a board that governs the development. They also hold regular meetings and hold elections for board members and officers. In addition, residents should receive regular community newsletters or sign up for emails or websites that can keep them updated on the happenings within the community.

Down Payment

A down payment must be paid before the construction begins when purchasing a new construction home. The down payment is usually a higher percentage of the purchase price than a traditional mortgage. This is because the lender takes on more risk when buying unbuilt construction. In addition to the down payment, a home buyer is also expected to pay a builder deposit, similar to the earnest money. A builder deposit is typically five to ten percent of the purchase price, but it can be higher if the buyer wants to contract the builder to add certain upgrades.

While a down payment for a new construction home is usually higher than a down payment for an existing home, it can be reduced by negotiating with the lender. Typically, a down payment for a new construction property is due at the beginning of construction, but some builders may request it sooner.

Closing Costs

Closing costs for new construction homes vary from market to market. Some builders offer to cover closing costs, but this is not guaranteed. Ask your builder for a quote. Thousands of dollars can be saved. Mortgage origination expenses, appraisal fees, title search fees, insurance premiums, transfer taxes, and credit report fees are all included in the closing costs. Before you sign the contract, you can compare the costs of these products.

Some closing costs are negotiable, including attorney fees, commission rates, survey fees, and messenger fees. These are typically listed on your faith estimate, which can help you compare lenders. In addition, some banks offer special financing programs for buyers. For example, Bank of America provides reduced origination fees for “Preferred Rewards” members.

Finding a Builder

If you are considering buying a new construction home, it is best to find an agent specializing in recent construction sales. A real estate agent will be able to represent your interests and avoid making mistakes that could end up costing you a lot of money. The agent can negotiate with the builder on your behalf and help you get the best deal possible. Your agent will also be able to help you deal with contractors, pre-drywall inspection, and other vendors involved in the closing process.

Many processes will need to be completed when you buy a new construction home. These include reading documents, inspections, and negotiations. You will need to hire the right professionals to handle these steps and budget for the additional costs that may occur during the process. For example, you must account for government fees, escrow payments, and service charges.

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