Purchase Tips · May 7, 2025
How to Buy a New Construction Home: What Is Different
Buying a brand-new home directly from a builder is a different process from a resale purchase. Here is what changes and what you need to watch out for.
New construction offers the appeal of a fresh home built to your specifications — but the buying process differs significantly from purchasing a resale property.
How New Construction Purchases Work
You typically purchase directly from the builder or their sales agent. The process varies significantly by project type:
Production builds: Builder has pre-designed floor plans, lots, and option packages. You choose from available options within their system. Faster delivery.
Semi-custom builds: Builder's plans with more customization options. Longer timeline.
Custom builds: You work with a builder on a fully custom design. Most expensive and time-intensive.
The Builder's Sales Agent: Important to Understand
The builder's sales agent works for the builder — not for you. You have the right (and often the financial interest) to bring your own buyer's agent, who represents your interests. Ask your agent about builder incentives that might affect your negotiation.
Financing New Construction
Finished inventory: The home is complete. Standard mortgage process applies, though the appraisal must support the purchase price.
To-be-built: The home does not yet exist. Two financing options: (1) Lock a regular mortgage rate with an extended lock (usually 6-12 months, at additional cost) and close when the home is complete. (2) Construction-to-permanent loan that funds the build and converts to a mortgage at completion.
Builder preferred lenders: Many builders offer incentives (closing cost credits, upgrades) to use their preferred lender. Get competing quotes — sometimes the incentive offsets any rate premium; sometimes it does not.
Critical Differences from Resale
The purchase contract is the builder's contract — designed to protect the builder. Have a real estate attorney review it before signing. Builder timelines slip. Rate lock extensions add cost. Build delays beyond your lock expiration are a real risk.
HMS handles new construction financing including extended rate locks. Call 309-222-8286.