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How to Simplify
Building Your New Home
Mackenzie believes that everyone deserves at least one brand new home in their lifetime. She also understands that purchasing and building a new home is a big decision, a decision that some may think is overwhelming. After assisting with the construction of over 200 new homes she decided she needed to create a way to help simplify the process of purchasing and building a new home. With the steps below and her assistance by your side as you explore, find, purchase and build your new home, she will take what many say is a time consuming and stressful process, and make it as streamlined and stress-free as possible.
When building your new home you need someone who is on your side and who knows the process of building a home inside and out. This is why choosing the right Realtor to assist you with your new home purchase and build is important. What some home buyers aren’t aware of is that they don’t need to pay a Realtor to represent them when buying a new home, the builder does. A Realtor works on your behalf and because the builder pays them, it costs you nothing to have a free expert assist you and an experienced, 3rd party looking out for your best interest during the entire purchase and construction process.
Over the last 10 years, Mackenzie has been involved in the construction of over 200 new homes; professionally helping others build their dream homes as well as building her personal new homes. Having sold more new construction in Charlottesville than anyone else from 2012 to 2016, she became the #1 Builder Sales Representative and one of the top New Home Experts in the Charlottesville area. She decided that she needed to share her knowledge and expertise with all new home buyers. That’s when she left her career working directly for builders, to became a Realtor with a focus on representing homebuyers needing assistance finding and building their dream homes.
From many years of working for builders and building her own homes, she understands the complexities of new construction. Having a broad knowledge of the new construction world, starting with all the contract paperwork, construction materials, building codes, builder’s pricing structures, to the multi-stage construction process, she will be able to make your new home purchase easier. She can walk you through the building process step by step stress-free by providing helpful advice on design, selections, cost, home siting, and so on. Throughout your purchase, she will also be able to answer your many questions throughout the build to save you time and hassle.
Before starting your new home search and build, you will need to determine what you can and can’t do financially. It is necessary to take into account as many costs as possible that you can factor in from the beginning. This will help prepare and prevent any large unexpected costs or surprises during the building process. This financial planning is probably the most critical step throughout the process, without this you can’t move forward with building your new home.
Items to keep in mind, are understanding what you can afford for your deposit, loan amount, different development costs, closing fees, and any other expenses that are required. This will help determine what size home you can build and what finishes you can select. If not paying cash for your new home, then you will need a deposit saved for your loan. In addition, you will need some of this money upfront as builders have different requirements for deposits to start construction. These deposits are typically higher than a resale home and can range from 3-20% of the price of the home. The deposit you will give the builder is held in escrow during construction and at the end goes towards your loan downpayment.
A fixed-price contract is typically the best choice when building and is more common with medium to large size builders. If you and your builder don’t have one in place, you must budget for some fluctuations from the original price quoted. Not to forget, any changes to your design or selections you make throughout the build will typically include an extra cost. There is always the potential when building that you could add as little as $250 to possibly $100k to the original price if you select a lot of additional upgrades. This is why it is important to keep this in mind when comparing the prices of different designs and selections from different builders.
If not paying cash for your new home and you’re getting a loan, then meeting with a reputable lender, in the beginning, is the best idea. This way you can receive a pre-approval to know how much you can afford going forward with your home search and build.
If not familiar with what a pre-approval is, it is when the lender verifies a borrower’s information and documentation to determine exactly how much the lender would be willing to lend to that borrower. The documents to get pre-approved are the same documents that you would need to get a mortgage.
-Last 2 years’ W-2s
-Last 2 federal returns
-2 months’ of bank statements of all types of accounts
-Your credit report
Finding where you will build your new home is a big part of the decision-making process when building. As the saying goes in real estate, “Location, Location, Location.” This decision will help determine the future value of your new home, but also how you will live your everyday life. There are several elements to review when making your decision on where to build.
Deciding if the City or the Suburbs or Rural areas are for you?
Choosing a certain location for your new home will influence many aspects of your everyday routine. If you choose the city over a rural area you should expect more noise and movement around your new home. Where if you choose a rural area, you may hardly ever see your neighbors. The location you choose for your new home will also affect how large your homesite can be, what education options you have, vicinity to everyday conveniences, and walkability (if any) to your favorite spots.
Is a particular community or area important to you?
You may know exactly what new community or area you want to live in, but most homebuyers will need to research their options for where they want to build. While they discover these communities, areas and their options, they will find that every community will have different characteristics that may or may not fit their needs. When comparing your different options, make sure to take into account:
-How close you want to be to work?
-What proximity do you want to be to family and friends?
-If you have children, how far are the schools from your house or work?
-Does this community have the amenities you want for your everyday lifestyle?
-Are you close enough to your favorite hobbies or leisure activities?
After reviewing these factors with Mackenzie, you will be able to narrow down what is important to you and explore the locations that best satisfy your needs. Being a Charlottesville native and a new home expert, Mackenzie can help you identify what areas or communities currently marketed and even unmarketed to the public may work for you.
Choosing the right builder to build your new home can sometimes be an exhausting task if you don’t know what to look for or ask in the beginning. Here’s some advice for making the decision process a little more straightforward and will hopefully save you some time.
– Know your needs- How much space do you need? What style home? Location? How much can you afford to spend?
– Experience- What is the builder’s experience? How many homes have they built? How many years have they been building?
– Tour builders model homes or customer homes-You can’t miss this step ever. You need to see the homes a home builder is offering in-person and what type of workmanship they have.
– Floorplans and Style of Building- Do you like the home plans the builder offers? Does the builder style of building fit your needs? Are you able to make the changes you need to, to build the home you want?
– Quality- What type of materials, workmanship, and building practices is the builder using? You can notice most of these items when touring the builder’s homes. Ask for a list of what brands and included features are standard in their homes.
– Visit a home under construction- Seeing a home that the builder has under construction, can tell you a lot of a builder. Is the site clean? Does the job site seem orderly? What can you see behind the walls of the home under construction?
– Meet the project manager- Try to meet the person who will be in charge of building your new home. See if this project manager can walk with you through a home under construction, this way they can answer any questions you have and you can see how knowledgeable they are.
– Home warranties and service- How do the different warranties for each builder compare? Does the builder have the procedures or staff in place to service your home if you need them in the future after moving in?
– Referrals and Reviews- What are the past homebuyers saying about this builder? It never hurts to ask the builder if they could refer some past buyers of theirs to speak with you and hear about their experience.
– Future Worth of Your New Home- Do the builder’s past homes hold or increase in their value over time?
Once you have decided where you want to build and who will be building your new home, then you will sit down with the builder to finalize your purchase agreement. You will review their home plans, the important structural options you would like, any specific finishes you have requested, and the delivery date for the home’s completion. Once you have thoroughly gone through these details and agree on the home, price, and terms, it is time to sign a contract to purchase and start building your new home.
Most builders have their own contracts and terms. Builder contracts are similar to most contract terms and sometimes can negotiate some of the terms. That said, most builders can only have a certain degree of flexibility when negotiating as there are items that are out of their control and some may be taking a lot more risk if they are financing the build. For example, a builder will hardly ever be able to promise a 100% fixed delivery date, as weather or the unforeseen “acts of god” could always delay construction. Most experienced builders do figure in some extra time into their build schedules just in case something arises that could be a delay.
The builder’s contract is typically a little longer in documentation length than a contract to purchase a resale. This is due to the builder using diagrams, renderings, or selection lists to confirm how your home will be built. From Mackenzie’s experience, the more diagrams and over-communicated explanations of what a home buyer will receive in their new home can never be enough. Building a new home can be a complex process with several steps and extra documentation along the way will only ensure nothing is missed.
One of the most exciting steps of building your new home is when you get to personalize it and make it your own. This advantage of choosing everything new, gives buyers peace of mind about their investment, knowing it will be less work, time, and money than remodeling to have the home they want. There are occasionally some buyers that may become a little intimidated when selecting their finishes or choosing design features. Here are some tips from Mackenzie for selecting your options and finishes.
What selections to make at contract?- The large selections to focus on at contract or right after you have signed the contract, are the structural options in the home. Some examples: the 4 ft great room extension, 3 car garage, extra full bath in the basement, moving a door, or maybe finishing the basement. The main reason to focus on these structural options first is they are typically the most expensive options you will pay for in your new home and they are harder to change after you have started construction. Mackenzie recommends choosing the structural must-haves you really need and can not live without first. She believes that choosing your must-have structural options over something like expensive lighting fixtures or marble countertops is a better decision for resale. Because the next homeowner may not be able to add these large features in the future if not added with the original build or it may cost them a lot to change later. If a certain finish doesn’t fit in your budget after selecting your structural options, and you can wait to have it in your new home, then consider changing out a countertop, upgrading appliances or adding some lighting after you close. These are not hard modifications to complete later.
Remember Step 2, Establish your budget?- Review your budget before selecting your finishes and additional upgrades. The budget that you have prepared should help the selection process go smoother. Most builders will have some idea of cost or even a detailed pricing list for the upgrades and selections you want to make. This way, you can compare or research what makes the most sense in your new home. Try to focus when you visit the design center or showrooms, as upgrades could quickly add up as you become distracted if you aren’t conscious of what things cost or what you budgeted to spend. During your selections meetings, you will pick out cabinets, countertops, appliances, flooring, exterior colors, stone or brick color, and so on. Trying to avoid overspending during these meetings, consider reviewing your budget before you have these meetings. Mackenzie will happily attend all your selection meetings to provide her insight and ideas if you need them. She has assisted with selections for many different style homes and a wide range of price points from $200k townhomes to million-dollar homes.
Try not to get carried away with customizations in your new home- One of the benefits of building a new home is you can make changes to the layout and overall finishes of your home, to express yourself and make the home more livable for yourself. But you will want to make sure not to over-customize your new home, for the main reason being the resale value. If this is your last home ever and you know you will be there for the rest of your life, then you may have some more freedom to do what you want, but most will end up needing to move again and have to sell their home. With that said, try to consider if the changes you are making are too out of the box or too bold for most homebuyers. For example, selecting purple tile over purple paint might be a risk you don’t want to take. It is easier to change a paint color than changing out tile.
Now it is time to start building your new home! The timeframe to build your new home could take as fast as 3 months to over a year. This timeframe will all depend on your home’s design complexity, size, the type of site work needed, and what type of weather you have during building. The good news is an experienced builder will be able to give you a realistic projection of your estimated completion date, to set the proper expectations before starting to build. When building your new home the more you know about the construction process, the more enjoyable your experience should be. Here are the main phases of construction to help you better understand what to expect when building.
Phase 1- Pre-Construction Meeting- Before the construction of your new home, it is customary for you and your builder to sit down to review your plans, selections, and building timelines. This way, you both can double-check that you’re on the same page before the start of construction of your new home.
Phase 2- Groundbreaking and Site Work- Your builder will stake your home on the lot and prepare to dig for a basement or grade for a slab/crawl space foundation.
Phase 3- Foundation- Once the excavation is complete, your builder will pour the footers for your foundation’s stability. Next, the walls are poured or blocked for the cement walls of your home’s foundation.
Phase 4- Framing and Roof- This phase is really when you can start to see things start to take shape. After the framing phase is complete only about one-third of the construction process is complete.
Phase 5- Rough Mechanicals- Rough mechanicals are referring to the heating, air conditioning, plumbing, and electrical components to be installed in your new home.
Phase 6- Drywall- Prior to your drywall is to be installed your builder may perform a pre-drywall walkthrough with you. This is a great time to see what is behind your new home’s walls. If you are considering having a home inspection, this would be a great time to have this inspection done.
Phase 7- Finishes- This phase is definitely one of the most exciting phases. You will get to see all of your selections you made come together.
Phase 8- Final grading and Landscaping- Now your lot will be final graded, seeded or sodded, and landscaped.
Phase 9- Final Inspection and Completion- During this phase, a final quality punch out is completed to fix any small imperfections and adjustments that can be found. Your home will be professionally cleaned and this is your final chance to have a home inspection to do a final inspection of your new home and share their report. Most Builders will perform a Final Walk-through or New Home Orientation before closing, to help better orient you with your new home before you move in. At this point your home is complete, your closing is set!
At this point your home is complete, your closing is set and your final payments will due at this closing. After all the paperwork is signed and completed, you will receive the keys to your new home. Time to move-in and enjoy your brand new home!
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