Building and buying a new construction home in a development can be less risky than building on a stand-alone lot, however there are still numerous varieties and options to be aware of.
Two Types of New Construction Developments
In this case, an independent developer purchases a large plot of land and subdivides it, and installs the roads, utilities, entrance, and amenities, such as a pool. He then auctions the lots off to a “builder team”, each of whom builds a model home and markets their lots.
PROS: more home plans and design options
CONS: limited lot choices
A national or regional builder both develops the land and builds all the homes.
PROS: wider variety of lot options
CONS: fewer home plan & design options
When to Buy
Being one of the first to buy in a development has higher risks since home value will depend on future market trends. In an appreciating market, these higher risks can lead to a higher return (ask those who first built in Brier Creek). In a depreciating market, or in the case of an incompetent developer, home values may take a significant down turn.
This often presents great opportunities. Builders may be willing to give a deal on the last few houses to expedite moving on to the next project. However, there will be limited lot selection that can sometimes dictate which floor plans can still be built. It is imperative you do your homework and get solid advice before making this decision.
It is imperative you do your homework and get solid advice before making this decision.
Managing the Construction Process
We recommend hiring an experienced home inspector to check on the progress at important milestones, the most important of which is when the electrical and plumbing have been installed, but not yet covered up by drywall.