The “Cliff Notes” to Buying New Construction

Are you in the market for buying a newly constructed home? There is without a doubt inherently appealing reasons to buy a brand new house; you get to choose the countertops, carpet, flooring, fixtures, etc., and have everything tailor made to your style. The appliances are usually more state-of-the-art, and new homes tend to come with more square footage. They also have little to no fix-up work and are typically more energy efficient saving you money in the long run on utilities. But there is a downside as well. Often, the advantages of new homes are overshadowed by things such as lengthy construction delays or even worse – the developer runs out of finances. So if you are in the market for buying new construction here are some suggestions on how to avoid common problems.

1.       It’s Not What You Buy – It’s Who You Buy From – Choose your developer, then choose your house. It is absolutely imperative to invest in a home that was built by a reputable builder. Every builder who believes in good craftsmanship knows how vital their reputation is and will pride themselves in building a quality home that is as affordable as possible and in a timely manner without cutting corners in any way. The last thing you want to do is buy a home from a builder you are uneducated about. Talk to residents who live in developments you are interested in. Get their feedback about their experience thus far. Find out who the HOA (Homeowner’s Association) is and how what they oversee. You can acquire a lot of information from the internet. Explore the developer’s website. You can also contact the Better Business Bureau for information and to find out if any complaints have been filed about the developer. Be proactive and resourceful as possible.

2.       Get an Inspection During and After Construction – Have an experienced inspector or contractor visit the home throughout the different building phases to evaluate the quality of work being done. Someone with experience will quickly be able to identify issues or craftsmanship that isn’t satisfactory. For instance, when a house is being built it is easier to inspect the wiring and plumbing before wires and pipes are concealed behind the wall. This is a sure way to avoid any unforeseen problems before they arise. It is always a good idea to keep communication with the builder by requesting that a contractor or inspector conduct a once-over at least three times during construction; when the foundation is poured; when the framing is completed; when the home is fully completed.

3.       Be Cautious of Optional Add-Ons – Many developers advertise homes at competitively low prices to lure you in to view the property. Often times when you get there commissioned salespeople will show you model homes that are fully loaded with extra add-ons such as granite counter tops, stainless steel appliances, or higher quality hard wood floors or tile which are not necessarily included in the advertised home price. If you end up falling in love with all the features the model showcases the home price will become surprisingly more expensive the more add-ons you absolutely must have.

4.       Get a Home Warranty – You’ve probably heard the nightmare stories about new houses that start to fall apart after the buyer moves in; the roof leaks or the basement floods after the first hard rain, etc. If you purchase your new construction home from a reputable developer this shouldn’t be the case. Be sure you buy a house with a new-house warranty from an independent insurance company as opposed to relying on a warranty from your own builder. New-home warranties usually cover workmanship and materials for one year. Electrical, heating, plumbing, and air conditioning systems are usually covered for 2 years. Major structural defects for ten years.


5.       Protect Yourself From Delays – It’s best not to close escrow on a new construction home until the home is complete. This will prevent the builder from lagging and delaying construction into the indefinite future. Unfortunately, however, the standard form on many contracts’ closing date may force you to close on a house that isn’t finished or has even yet to be started. Sometimes you as the buyer will be asked to sign a very one-sided purchase contract. It will stipulate many deadlines you have to meet (make deposits, agree to design changes, attain loan approval, sell your present house, and close escrow), and the developer will have sometimes up to a year from the projected completion date to furnish the completed home. So do what you can to negotiate a fairer deal. Most importantly you want to establish a reasonable date which you can cancel the contract and get your money back should the developer not deliver the house in time. Again, make sure everything is in writing. 


Reference: Zillow, MS Real Estate


If you or someone you know is interested in buying or selling

a Nashville Home please contact:


Emily Lowe 

The Lipman Group | Sotheby’s International Realty 

Office: (615) 463-3333 / Cell: (615) 509-1753