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Step 1
First you have to decide what you want in a new home. Do you want a spec house, a semi-custom home or a completely custom home? Much of the differences in the cost of a new home is in the upgrades. If you want the best of everything in a house, you certainly will pay for it. If you are willing to take a standard plan with builder's grade materials, you will get a house that meets code but don't expect much more.
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Step 2
Find out about the builder. Search the builder's name and his company name on the Internet. Call the Better Business Bureau. Call the local home builder's association but remember they are builder advocates. Get referrals from previous buyers of the builder's homes.
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Step 3
Consider hiring a buyer's agent to negotiate for you. You can attempt to have the seller pay your agent's commission or you can add it to the purchase price of the home. Look carefully for a buyer's agent who will work for you in getting you the best deal they can on a new house. Your agent should uncover any potential problems in the home and disclose them to you. The builder's agent works on a very small commission and will not do so usually.
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Step 4
Ask your agent to recommend a good real estate lawyer if you do not already have one. Use your lawyer even if you are buying a new home with a standard agreement. Make sure you understand what you must do once you sign the agreement and what rights you might have to cancel the agreement if need be. Hire a home inspector of your choice to inspect the property just like it was a used home.
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Step 5
Always negotiate with the builder himself, if possible. If you are buying from a production builder whose corporation sells hundreds of homes each year that will likely be impossible. But if you are buying from a semi-custom builder, even one who sells over a hundred homes each year, it is definitely possible. The upgrades and options in a home are the easiest items to negotiate.
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Step 6
Find out how long the house has been finished. Remember a builder is paying interest on his construction loan. That can eat up all of his profits. The longer a home is for sale, the easier it will be to negotiate favorably. Don't settle for a salesperson's price list.
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Step 7
There are no deal points to the builder if he buys down the interest rate. You are not getting that much from the builder in this case. So carefully calculate your total cost including the cost of financing and the price of the home.
