For many, owning a brand-new, never-been-lived-in home is the ultimate dream. Yet the reality of tackling a renovation project or building a house from scratch can feel overwhelming, if not impossible.
A home renovation or new build is a major time commitment and can cause financial stress for those on a budget, not to mention the expertise and know-how needed to undertake this endeavor.
Not everyone is cut out for a renovation project of an existing home, which gives new development condos and spec homes tremendous appeal. Who wouldn’t want to avoid the headache and hassle of construction and move right into the perfect home? Coupled with the added incentive of an oversupply in new development inventory in cities like New York and Miami, this marketplace can be a huge opportunity for a buyer. But not unlike any sector of the market, this luxury comes with a price and requires the know-how to navigate buying a new construction home successfully.
Here are 10 key points to consider when buying a new construction home:
- Pre-construction versus post-construction.
- Quality of the builder's past projects.
- Reputation of the project.
- Developer concessions.
- Visual red flags.
- Home inspection.
- Pre-closing to-do list.
- Onsite team.
- Percent of homes in the development sold.
- Current status of the penthouse.
Pre-Construction vs. Post-Construction
For most of the United States, especially in Florida and New York City, there is an oversupply of new luxury condo construction inventory and little incentive to purchase pre-construction. There's no longer a race to buy the home before it sells out or prices escalate.
By purchasing new construction that's already been completed, you eliminate the mystery of what the finished product will look like and when it will be completed. This is a huge plus for every buyer. Unless you are confident in the developer, waiting until the project is complete in this market is advisable. Why hand over your money in advance and wait if you don’t have to? Perhaps there is a better deal to be had by waiting.
Quality of the Builder’s Past Projects
Research and investigate past projects done by the developer. Go look at them if possible. Do their other projects hold up over time as they should? Does the quality match your expectations?
Reputation of the Project
Ask your real estate agent or neighborhood residents if the developer is respected, or if there are any issues with the community. Are there any controversies concerning the project regarding zoning or design? You may not be considering resale at the time of purchase, but it's always a good idea to understand all the implications of your investment.
The financial aspect of purchasing a new development property can be complicated and is an area where the help of a buyer’s agent is most critical. In addition to the purchase price, there are usually other fees and closing costs which are not insignificant.
In New York City, depending on the purchase price, these costs could exceed 5% of the total. State and city transfer taxes, mansion taxes, common charges and attorney’s fees add up. In addition, analyzing the comparable recent sales of similar homes is not straightforward. Most developers prefer to keep closing prices high and offer concessions in a way that the recorded price does not reflect all the concessions. Therefore, deconstructing the actual purchase price can be a challenge. A buyer’s agent is critical in navigating this land mine.
Visual Red Flags
Canvas the building, apartment or house with the naked eye. If something doesn’t look right, even though you're not an expert, make a note of it and investigate. If something looks odd, smells strange or just doesn’t seem right, do not discount it.
When purchasing a home, the buyer hires a home inspector at his or her expense to evaluate the subject property. This is a must in house purchases, but for apartment buildings, this is less common as it is difficult to inspect the guts of the building’s mechanicals.
Pre-Closing To-Do List
Before the closing date, the buyer is allowed a walk-through with a representative from the developer to inspect the home and create a punch list. This to-do list must be completed by the developer but not necessarily before the closing. The developer may continue finishing punch list imperfections after the closing has occurred, but the buyer must create the list before the closing and cannot add to it after. Therefore, this is the time to be as thorough as possible. It is not uncommon for buyers to hire experts who specialize in walk-throughs to ensure nothing is missed. Take this process seriously.
In addition to the salesperson, the buyer should get to know the onsite team for the development firsthand. Meet with the project manager, the super and check out the public spaces and see how they are managed. Do they look clean and well kept? This might give the buyer an idea of the standard for the project and what to expect.
Percent of Homes in the Development Sold
The percent of homes sold presents two scenarios:
- If the building or community is almost sold out, developers are often eager to get rid of the last few homes and close out the project. Therefore, this might be an opportunity for a good deal.
- On the flip side, if a project is slow-selling, this can present several concerns: Which banks are lending to the building and will price hold? What are the other possible implications of many unsold units?
Current Status of the Penthouse
Penthouses are big-ticket units and money makers for developers. They are also an indication of how the high end of the market feels about the project. If the penthouse has sold quickly, this is usually a very good sign.
New construction is the ultimate luxury for many, but purchasing in this category requires the know-how to navigate all the ins and outs – it is not as straightforward as it appears. Armed with some key strategies and the expertise of a knowledgeable real estate buyer’s agent for guidance, a savvy buyer is positioned to potentially win big on a dream home at, hopefully, a dream price.
Browse for homes – and maybe even close a deal.
Luckily for homebuyers, house hunting apps are growing in number and sophistication. As the online real estate marketing industry becomes more competitive, mobile apps are getting better at helping consumers find accurate housing information while offering features to help users narrow down their search. Read on for some of the most popular and helpful apps to use when searching for your next house. All apps are available on both iOS and Android.
Updated on Nov. 6, 2019: This slideshow was published at an earlier date and has been updated with new information.Zillow
(Courtesy of Zillow)
This is the most downloaded real estate app for both Apple and Android phones, and it includes Zillow's signature map and home value estimate tools. With more than 100 million homes in its database, Zillow's app is the most popular method for users to explore the platform. In fact, Zillow reports that more than two-thirds of its usage takes place on a mobile device, jumping to more than three-quarters on the weekends.
Best feature: The app’s dashboard includes a Your Home tab that allows you to store your property’s information and see how its value estimate changes over time.
Pro: You have the option to filter your saved searches by property listings that have recently changed, so you don’t have to scroll far to see if a house's asking price dropped.
Con: As much as you may want it to be, the Zillow Zestimate isn’t a guarantee of what your home will sell for.Realtor.com Real Estate Search
Realtor.com Real Estate Search
(Courtesy of Realtor.com)
Filters on this app's search function allow you to include specific details on your must-have list, such as multiple floors, a fireplace, central air and even community swimming pools or security features.
Best feature: With the Sign Snap feature, you can take a photo of a real estate sign you see in a neighborhood and get details about the property right away.
Pro: You have the option to connect with a real estate agent who can represent you as the buyer in a deal, but you can also see the contact information of the listing agent if you want to talk to him or her directly.
Con: The more specific filters rely on listing agents using the right keywords, so if you’re struggling to find everything you want in a house, you may have to widen your search and keep an eye out for details in listing photos.Trulia
Trulia’s app gives users a desktop-like experience in a mobile platform, with a focus on design that makes it easy to use.
Best feature: Trulia polls its online users who live in specific neighborhoods and includes the results on the app. For example, you might find that 93% of one neighborhood's respondents feel comfortable walking alone at night or that 76% say kids play outside regularly.
Pros: On each property profile, Trulia lists local legal protections, noting whether there is legislation in the area to protect against discrimination for gender identity or sexual orientation in employment, housing or public accommodations.
Cons: On any property profile, you’re prompted to call or email an agent about the property. While this is convenient if you’re serious about buying but don’t have an agent, it can get in the way if you’re just browsing.Redfin Real Estate
Redfin Real Estate
Since Redfin utilizes an out-of-the-box business model with agents and professionals specializing in different steps of the homebuying and selling process, the company’s app serves as a way for users and Redfin agents to communicate. A map indicates which properties are listed by Redfin or another broker and also notes homes that are likely to sell fast through its Hot Homes feature.
Best feature: You can schedule a tour with a Redfin agent directly through the app. The app even lists the next available tour time.
Pro: You can click the heart symbol to keep a property you like on your radar, and you can also nix properties so they don’t keep popping up in searches.
Con: If you don’t live in one of the 80 markets where Redfin has agents, the app offers local listing information pulled from the MLS, but you won't be able to utilize the features that connect you with Redfin agents.Homesnap Real Estate & Rentals
Homesnap Real Estate & Rentals
(Courtesy of Homesnap)
Homesnap gives house hunters the reins with this app. A signature feature allows users to take a photo of a home, and the app will identify the property and provide details about it from the local multiple listing service or public records.
Best feature: The beginning of each property profile details the property history, including previous sale prices and when it last went on market.
Pro: Each home has a section that allows you to determine your commute route and time and see both map and street views of the property.
Con: The property details are in list form, which you can expand to see everything from the home's architectural style to number of bathrooms and homeowners association fees. The depth of information is helpful, but long lists can make it easy to lose focus and miss key criteria.Homes.com
On this app, you can search based on your needs and desires, including buying versus renting, home value information for properties on the market and what neighborhoods are ideal based on your preferred commute time.
Best feature: An exclamation point in the corner of a property profile lets you know that it’s a new listing, which can help you move quickly to avoid competition with other buyers.
Pro: If you'd like to get in touch with a local agent, the bottom of a property's profile often lists more than one option, making it easier for you to shop around for the right agent.
Con: While Homes.com has much of the same property information as other house hunting platforms, the app doesn't offer much in the way of neighborhood information.Estately Real Estate
Estately Real Estate
Estately aims to connect consumers with the right local real estate agent, and its app offers multiple ways to get in touch with agents.
Best feature: Users can click on icons on property profiles for quick information on taxes, utilities, appliances, schools and more. Profiles also include scores on things like area noise pollution and internet speed – details that aren’t always considered but could be deal-breakers.
Pro: The app encourages you to see houses in person, with multiple opportunities on a property profile to schedule a day and time to visit.
Con: Estately only covers markets in 40 states, so those looking for homes in Arkansas, Iowa, Kentucky and several others are out of luck.Century 21 Local
Century 21 Local
(Courtesy of Century 21)
A longstanding national brokerage, Century 21 provides consumers with access to home listing information pulled from the local multiple listing services. The app can particularly come in handy if you plan to use a Century 21 agent, as that’s who you'll be in touch with if you would like to inquire more about a property.
Best feature: The app provides a notes section for every property, so you can keep track of your impressions as you compare homes.
Pro: If you start searching for homes in a different city, information about the local Century 21 brokerage you should contact changes accordingly, although you can still see listings from brokerages outside Century 21.
Con: This app pulls from Zillow to provide home value estimates, but occasionally lists "unavailable" even if the property has a Zestimate available on Zillow.The best apps for house hunting include:
The best apps for house hunting include:
- Realtor.com Real Estate Search.
- Redfin Real Estate.
- Homesnap Real Estate & Rentals.
- Estately Real Estate.
- Century 21 Local.
After earning a degree in Economics from the University of Pennsylvania, Arriz worked in wholesale sales for several top fashion designers in New York City. While her business sense, tireless work ethic and integrity fuel her success, most importantly, she believes wholeheartedly that one’s living space should be not only an investment but also a home and sanctuary.
Arriz has resided on the Upper East Side for over 30 years and currently lives in Carnegie Hill with her husband, three children and her miniature schnauzer, Lucy.
May 11, 2020
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