If you are in the market for a single-family home for sale, you might have already written off newly built or contract-built homes because you assume they are out of your price range. Older homes in more established neighborhoods can be less expensive, but if you want a new house, be sure to look at budget-friendly options and designs. You might be able to have a new house after all.
Look for these features to help keep a newly built house in your budget.
1. Smaller lots.
When builders develop a new area for houses, they divide it into lots. People who want new houses in the area can pick a lot and a pre-determined design. Using a pre-made design provided by the builder saves money; the house will not be custom, but everything inside it will be brand new. Larger lots are more expensive, as are corner lots or lots on a cul-de-sac. Look for lots that have a smaller footprint, they will be the least expensive.
2. Fewer building upgrades.
If you find a lot in your price range, you may still be able to alter some of the finishes of the house design, such as the flooring or the cabinets, but these alterations cost extra. Don't splurge for upgrades. Try and keep the design as close to the standard build as possible. For example, the builder standard might put maple cabinets in the kitchen, but the upgrade is cherry or white painted cabinets. Keep the maple cabinets to save thousands on the final home price.
3. Tax breaks and builder incentives.
Finally, both builders and communities offer incentives for new developments. They aggressively advertise the listings, because they need to make sure people have incentives to buy the new homes. Some of these incentives include:
- no closing costs. The builder might offer to cover all the closing costs.
- no downpayment. The builder might have a contract with a financing company to provide buyers with 100% financing on new houses.
- tax abatements. This is a big perk, and it can help make your house affordable. Some communities won't charge property tax on new houses for a couple of years. This results in thousands of dollars saved, and it could mean making up the difference between buying an old home and buying a new one.
- warranties. Builders will give warranties on new houses that cover big-ticket items, such as the roof, large appliances (furnace, air conditioning, etc.) and windows. These warranties mean savings that you wouldn't find when buying an older listing.
Talk to a real estate agent about getting a new house in your price range -- it might easier than you think.