Let's go through some of the facts and fiction of purchasing a brand new home. Let's start out with one that tends to be the main selling point for new builds. You can customize your home and the basic options included and/or upgrade options available. There's no need to pay a contractor after you've closed to redo that pink tile in the bathroom because you participated in the finishes for your home. Because you get to help in the design, new builds tend to feel much more like home right off the bat. So who doesn't want that?
This also means that your home is equipped with the monitored amenities so there's no upgrading needed once you move in, nor do you need to do that deep clean since you're the first homeowner. Another fact is that new builds in today's market can be easier to secure. Once you pick a builder and if they have a home available, you can secure it without competing against multiple buyers or over asking bids. Although finding a builder with a lot available in today's market is a bit harder these days. Colorado has luckily not yet gone to the lottery system for lots like some other states, Arizona. You should also prepare for a longer timeline and slightly higher costs given today's market conditions.
So let's move on to some myths. While you need to be pre-qualified for a new build, sometimes a year in advance, you don't finalize your loan until 30 or 60 days before getting the keys just like an existing home. This means that you need to play the long game with your lending team. And that could mean updating your loan documents several times along the way. You will still want to ensure that you do not purchase any big items or have a negative report on your credit during that waiting time. You will also typically not lock in an interest rate at the very beginning, but look to lock in closer to that 30 to 60 days before you close.
If today's low rates sound appealing because they are, you might want to consider doing an extended lock, which you can go out as far as nine months before you close. But use caution here because anyone who has lived through home renovations knows that things can get delayed and a finished date is not always guaranteed. And you don't want to be stuck with expensive lock extension fees.
Another myth related to your lending relationship is that you can't use your own lender or that the builder's incentive is so steep that you will need to go with their lender to get it. Well, we have great news for our clients. The Rueth Team is able to match builder's incentives to give our buyers the new build that they're craving and the service levels provided by our lending team.
Our last myth today is that because your home is new, you won't run into any maintenance issues. However, while you should not run into significant issues with things like the foundation or outdated windows or general wear and tear, there's still a possibility of things going skew. Supplies can come in faulty from manufacturers. Installation can be rushed. And of course, with all homes, unexpected things can go wrong. And so while you're less likely to run into them with a new build, just because it's new does not mean it's fault-proof.
New builds are a great option for homeowners that want modern new homes without the hassle of renovations. In today's hot seller's market, they may be easier to find, but many of the larger new build sites are outside of the Denver area, meaning you may have to commute a bit longer as a trade-off. Overall, they're a great option for first-time homebuyers or move-up buyers. So let us know in the comments below what you prefer. Is it a new build or is it purchasing an existing home and looking at renovating? And if you're thinking about a new build, don't forget to give us a call. Nicole Rueth with The Rueth Team of Fairway Mortgage. We look forward to serving you.