Pro's and Con's of Buying a New Construction Home (Palm Beach, Martin, St Lucie)
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Pro's and Con's of Buying a New Construction Home in Palm Beach, Martin, or Saint Lucie Counties.
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Are you looking for new construction homes in Palm Beach, Martin, or Saint Lucie Counties? Most of these homes are built by some of the nations largest builders, including DR Horton, K Hovanian, Kolter Homes, GL Homes, Taylor Morrison, Ryan Homes, and Del Webb to name a few. This would include inventory in communities such as Westlake, Bridgewater Jupiter, Artistry Palm Beach, Avenir, Valencia Grand, Valencia Park, and Astor Creek Golf and County club to name a few! There’s a community for a vast range of home buying budgets, from the high 300’s through the several million dollar range.
What are some other pros and cons of buying new construction?
I feel one of the largest benefits to buying a new construction home in Florida, is the fact that the builder may offer financing incentives. This is incredibly important for a number of home buyers, but this is especially important to first time home buyers! Are high interest rates keeping you from buying a home? Builders can often help with interest rate buydowns, a 2-1 buydown is a popular option. In short your interest rate is reduced by 2% the first year, then by 1% the second year, before adjusting to the interest rate at your time of purchase. Your mortgage will be qualified off of the full payment once reductions are over. This can be a huge advantage, and an even bigger help, when you need some wiggle room in your budget to do things like buy new furniture.
Are you worried about high insurance costs? Here’s a really big pro if you live in the state of Florida, all things considered your insurance cost should be lower on new construction. If you buy existing construction you will likely pay more as the home will have a roof and other components that are less than brand new. With insurance rates where they are now this one is a real winner for me.
Are you worried about buying a home and then having to spend a bunch of money on repairs? I could tell you story after story about things that have come up on inspections of existing homes. From unpermitted repairs and additions, to fire hazard type wiring throughout a home. On new construction, well, it’s all new. Everything has been fully permitted, and it’s all up to today’s code. You won’t have to worry about replacing aging ac units, or roofs, plumbing, or electric, because it’s all new. If you buy existing construction you’re possibly going to have to upgrade or replace those items. So your repair costs are going to be much lower on new construction versus existing construction.
The builder will write the contract, it’s not on the standard state contract. You’ll want to have an attorney review the contract. That being said, the builder may not allow any changes to their contract, but at least if an attorney reviews it for you, you’ll know your risk and exposure. This is one of the larger cons as it takes a lot of the control in the transaction away from the Buyers.
You’re more likely to be able to negotiate closing costs into a deal on new construction vs existing home sales, as a general rule. This can really help Buyers who are trying to get into a home with as little money out of pocket as possible. You can’t underestimate this possible benefit. This can be in addition to a rate buydown.
You’re not going to know your property taxes. You can estimate them based on a millage rate, but you won’t know what your taxes actually are until the tax bill comes out for the year following your purchase. This is because the land your new home was built on was being taxed as plain old vacant land, not land with a fancy new house on it. This unpleasant curveball is a con.
You may get a builders warranty on things ranging from the structure of the home, cracked tiles and concrete, coverage for defects in electric, plumbing, and ac systems. Each warranty is a bit different, so inquiry if you’re interested in a home. This is something you don’t get with existing construction, outside of an appliance warranty thrown into deals here and there, and I see as a really big benefit.
You’ll be in an HOA. Som people don’t like HOA’s, some people do. This is really a matter of taste. That being said, large communities, such as those that tend to sell through large builders, will be governed by and HOA. You will have an HOA fee, so you’ll want to know what that covers.
New construction can make for a great starter home, or for first time home Buyers. Now I’ll be honest, a builder may not be building a project in the area you’re looking in, you may have to look in places you weren’t really considering. That’s the reason I will cover Palm Beach, Martin, and Saint Lucie Counties on new construction, which is a much larger area than I cover on existing home sales.
Did you know many new construction homes don’t appear on the MLS? I have a property search that can help you locate those unlisted homes! Just below this video.
Just to make sure you don’t miss any listings, I’m also going to include a new home search of homes that are on the MLS below as well.
Finally if you’d like more detail I’m happy to send you a New Construction Buyers Guide that I’ve put together. It will help you understand more of the details that I have not covered in this video. How do I know a lot of these little details? Because we used a builder and built our house from the ground up, so I know a whole lot about the process, because I’ve been through it!
