Everything you should know about buying new construction this spring
February 24, 2016
Spring is (almost) in the air, especially when it comes to new construction. Whether you’ve got financing questions or you’re ready to start your search, here are insights you can use as you make your move.
You’ll benefit from attending the Parade of Homes
The Builders Association of the Twin Cities Spring Parade of Homes runs from Feb. 20 - Mar. 20 with all homes open Thursdays through Sundays, from noon to 6 p.m.
The tour will feature 458 new homes all across the extended metro region, showcasing the latest trends in home designs.
While the Parade of Homes attracts many people who don’t intend to buy or build a new construction home, it’s also a great resource for serious buyers. Builders generate many sales from this event, so don’t hesitate to take the tour as seriously as you would a home showing and make sure to bring your REALTOR® along for the tour and to help with the purchase and negotiations should you decide to buy. Builders will be showing off inventory that is ready to move in, or that is only a few months from being completed. By speaking with them during the Parade of Homes tour, you may find a home that will be move-in ready in just a few months’ time. If the home is partially completed, you also might be able to add your own finishing touches so it feels truly meant for you and your family.
Even if you don’t find your next house at the Parade of Homes, new construction homebuyers in Minnesota and western Wisconsin can use it to look at new design and technology trends, different neighborhoods and builder style and quality. It’s truly a great way to start the process regardless of when you plan to begin.
Locking in an interest rate now may be a good idea
It’s likely that interest rates will experience incremental increases throughout the year. To take advantage of today’s great rates, ask your mortgage lender for a locked rate. If your lender agrees to lock your rate, it means that your mortgage loan will have the locked rate even if rates increase between now and closing.
Together with your REALTOR® and your mortgage loan officer, you can determine if and when you should lock your mortgage interest rate this fall.
Consider adding a contingency in your purchase agreement
When buying a new construction home, it’s possible to add a contingency to the purchase agreement saying that the home sale can be cancelled if you are unable to sell your current home. This lessens your risk and can protect you from having to pay a mortgage on two separate homes. However, if you are carrying the construction loan on the new build or are building a more custom home, this may not apply. Your REALTOR can walk you through the buyer demand for homes like yours and together you can determine if a contingency is the right call for you.
Start thinking through transitional housing options
If you choose not to add a contingency to your purchase agreement, be sure to have a good grip on your short-term housing options. Your REALTOR and builder will be a great resource for you if you end up needing transitional housing.
Common transitional housing options include:
- Renting a single family house or town home with a short-term rental
- Contracting with your buyers to rent your home back from them until your new home is ready for occupancy
- Renting an apartment month-to-month or on short-term rental
- Contracting with an extended stay hotel or inn
- Staying with friends or family who have extra space or a vacant home
Ready to get started?
Building a home is an exciting process and demand for new homes in our market is high. If you’re ready to start building but don’t know where to start, we can help. Reach out today to get connected with a new construction expert in your area
Plus, don’t forget to check out #BuyerInsights and #SellerInsights on Facebook, Instagram, YouTube and Twitter for more tips on the home buying and selling processes.
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