From dusty lot to peace of mind

It may look like an empty field, miles and miles of dirt or bare, cordoned-off city blocks.

The only images of the new homes might be digital renderings, because the homes themselves don’t exist. But years before any potential buyers begin learning of a community that is now selling, builders begin the earliest steps of planning each new dream home.

For the buyer who is certain that new construction is their destiny, there can be many benefits to getting in on the dirt floor. Simultaneously, it’s good to be prepared for what’s to come.

First, some benefits: First choice of location

A buyer who researches the builder, including getting to know the sales team members, can make certain decisions before the community opens. By already knowing which home plan best suits their needs, that buyer can save time when the community map becomes available.

It could be that one elevation of the ideal floor plan will be built across the street from the beautiful, new neighborhood park. It might also be built at the end of a quiet cul-de-sac. Or perhaps it’s an end unit in a condominium community or just steps from dock access in a neighborhood filled with lakes or other waterways.

By determining which floor plan you need and want, you’ll be able to easily and quickly navigate the map of the lots that are designated for your preferred home plan or elevation. This knowledge puts you several steps ahead of buyers who have just learned about the community.

Introductory incentives

Builders know that a greater number of potential buyers are likely to take notice of a community that already has homesites under contract before vertical construction began.

In other words, early buyers create buzz, which builders are happy to incentivize. Some of the benefits that builders may offer to early buyers include covering closing costs or providing design upgrades or design credits.

It’s unlikely that a builder will want to set a precedent of discounting prices below the projected asking prices for the first-phase homes. But some buyers who get in at the very beginning of a new community’s first phase are likely to spend a little less than people buying later in that phase or in future phases.

More equity over time

By purchasing a home early in the rollout of a new-home community, buyers protect themselves from the inevitable price increases of real estate in hot markets such as the Bay Area.

Depending on the size of the community and how many phases are included, floor plans similar to those of the initial phase may sell for significantly higher prices a few years into the community’s development.

The later-phase houses almost certainly will have different or more contemporary features than the first phases. But the people who buy in earlier phases will have equity. With the right financing, that equity can go toward design and decorating updates or to new custom features a few years after move in, such as a landscaping overhaul or a new outdoor living area.

You can’t put a price on that confidence and security that comes with equity. While no builder or real estate professional will promise a rate of increase in property value, a few years after move in, early buyers may discover that they wouldn’t be able to pay their price for a comparable, newer-phase version of their earlier-phase house.

Get ready for adventure

It’s a good idea to know what the months ahead of you will entail before making the decision to purchase early. Be sure to get to know not only the builder and their plans for the neighborhood, but as much detail as possible on the timing of the various stages of the building process.

Once under contract, the builder will provide you a timeline with benchmarks for important decisionmaking along the way. In another article in this space, we’ll review those important benchmarks and how to prepare for them.

In the meantime, visit our New Home Finder map to see what homes are coming and which builders are entering new phases of development in new or existing communities.