New Construction Guide

Building your dream home is an exciting (and intimidating) process! With so much control and customization, it pays to have someone on your side advocating for your wants and needs with your builder.

Since 2002, our team has been a staple of Kansas City Real Estate and takes pride in providing the best possible service to our clients, colleagues, and community. Our skilled new construction team excels in providing expertise throughout the entire new construction process. We are a team of specialized professionals who know the new construction process industry inside and out.

Before you start your new home journey, call us. Our team of trusted experts is here to help!

One question buyers often ask is, "Do I need a Realtor to buy a new construction home?" Having an agent ensures you have someone in the transaction looking out for your best interests, helping answer questions, and negotiating the best terms for you.

Not only is it crucial to hire experts who can assist you through the buying process, but you'll specifically want to look for professionals who have experience working in new home construction. Furthermore, if you still have a home to sell, it’s a good idea to find an agent who can represent you on both sides of the transaction. Streamlining the process, one individual can coordinate all the dates and requirements so there is no miscommunication.

STEP1.Hiringa RealEstateAgent

OurNewConstructionTeam

Our new construction team consists of experienced agents who specialize in new construction homes across the Kansas City Metro area. Our team can help you decide what floor plan makes the most sense for your family (and your budget), what upgrades are worth making, and who are the best builders in the area.

We are here to make sure your previous home sells within the timeframe that works best for you, AND for the most money possible. We understand how expensive it is to build a new home. That is why it is important to work with a listing agent that has proven metrics of success. The Ask Cathy Team has been selling homes faster and for more money since 2002.

STEP 2. Financing Your New Build

Financing a new construction home is very similar to buying an existing home. However, you have to be more mindful of the timing. Your lender will not allow you to close on a new construction home until it is fully completed. If you are currently living in a home you own, it can be challenging to line up the closing of your new home with the sale of your existing home.

During our initial consultation, we will work with you to figure out which is the best financing option for you. You have a few options if you want to finance a new build house but still have a mortgage on your existing home:

Bridge Loan

A bridge (or blanket) loan takes the equity out of your current home and uses it as a down payment for your new home. Then once your previous home sells, the lender will apply the proceeds from your previous home sale to the new home and will convert the bridge loan to a traditional loan of your choosing. During the bridge loan period you are paying interest only on the borrowed amount making it more affordable.

Construction to Perm Loan Builder Financing

A construction to perm loan provides interest only funds to use on the cost to build your new home. This type of loan is more common among custom builders and requires a 20 to 25% down payment and has higher interest rates than other more typical types of financing. Buyers will convert or refinance the construction loan into a traditional loan once the home is finished, but there will be only be a one-time close and a one-time appraisal.

Many builders have relationships with lenders who finance new construction homes. Sometimes there may be financial incentives for using the builder's preferred lender, but again, proceed with caution and vet other alternatives as well. These days you can even find lenders who will shop rates for you to make sure you’re getting the best terms possible. Builders will require a minimum of 5% up to 20% down for this option.

Choosing the right builder not only determines the quality of the home you are building, but also how easy the process is. We work with a variety of builders in the Kansas City metro area and would be happy to provide you with a list of our preferred builders. You can find the types of builders to consider below.

TractorProductionBuilders

STEP 3.

Choosing the Right Builder

Tract builders buy large tracts of land and build subdivisions. Typically, they only offer a few different floor plans for buyers to pick between, and there is not much opportunity for true customization. However, this type of new construction home is often the most affordable and is built on the quickest timeline.

SpecHomeBuilders

A spec, or speculative, home builder usually builds one or two homes before eventually putting them up for sale. Spec builders often have more potential for flexibility than tract builders, so you may be able to get some customization at a lower price point.

Semi-CustomHomeBuilders

A semi-custom home is often thought of as a middle ground between a spec house and a custom build. Usually, with this type of new build, the homebuyer will pick the lot’s location but will choose from a selection of pre-made floor plans that the builder offers.

CustomHomeBuilders

A custom home is often thought of as a "dream home." A custom home allows the buyer to design every element of the house from scratch. As you may guess, this option is often the most expensive and takes the longest.

What Upgrades Are Worth It In a New House?

It’s easy to get caught up in the details and drive up the cost of your home. When thinking about upgrades, choose features that will add to the value of your home. Spend money on things you can't change later - like the home’s frame, foundation, and windows. You can always change flooring, countertops, and light fixtures as you’re living in the home.

We suggest prioritizing practical upgrades, like energy-efficient windows, that will ultimately save you money down the road. That said, you may still want to make a few aesthetic changes. Prioritize high-impact spaces, like the kitchen or master bathroom. Future home buyers will care more about these spaces than guest rooms or bathrooms.

Making Your Dream Home a Reality

Make a Pinterest Board

Or a Houzz Idea book or just save photos

Photos are a great way to help communicate your vision and design style when meeting with the designer. We encourage you to take some time exploring what photos you like and group them into several categories, such as kitchen, bathroom, etc. Once you gathered your photos, try to narrow them down to your favorites. Having too many ideas or pictures can be more stressful than helpful when making your design decisions.

Create a Wish List

Creating a wish list is going to help you remember all of the things you want in your dream home. You will be making a lot of big decisions, so your list will help you prioritize. This way you can be prepared to add to your list if your budget allows or delete the items that are not as important!

When you're ready, you'll put together an offer on the home. In new construction, you'll usually sign a builder contract rather than the standard purchase agreement. A builder contract outlines the terms between the builder and the buyer, including the home's specifications, final plans, how much you will pay, and the completion date.

This step is where your real estate agent will be invaluable to you. They will be able to negotiate on your behalf and advocate for your interests. Additionally, they will negotiate your down payment and terms, and your allowances as well. Encompassed in these negotiations, your agent will provide a comprehensive explanation for all of these details....keeping you informed throughout the entire journey!

After negotiations are done, you will hand in your earnest money deposit and will officially start the construction process. Usually, the construction process will be broken down into several phases, and you will get a chance to see the progress after each phase is complete. Depending on the type of mortgage you are getting, your lender may also require performing an inspection at the end of each stage.

At this point, you may be wondering how long it’ll take to build a new home. According to the Census Bureau, building a new single-family home takes about 6 to 8 months, though the timing will vary depending on the type of home you’ve purchased. You should expect a custom home to take at least 9 to 12 months.

Permits & Foundation

Once construction is complete, you will be given a chance to do a home inspection. Just like with a resale home, the home inspector will walk through your new house and look for any apparent issues. Then, they will write up a report with their findings, and you will be given a chance to work through any necessary repairs with the builder.

Next, you will do your final walk-through. This is your chance to see if you notice any problems with the property and have them noted on the walk-through “punch” list. Make sure to test everything out, including turning on all your appliances and flushing the toilets. The punch list is often completed before closing, but don’t worry if a few items are not finished because you will have a one-year warranty on the house and can report any issues to the builder for 1 year after closing. This is different than resale when all repairs must be done prior to closing.

ASKCATHY.COM | 816.268.4033

STEP 7. Inspecting Your Newly Built Home