• Melanie Loves Tampa Bay

Realtor's Advice on Buying New Construction Homes 🏠

Have you fallen in love with one of those perfect model homes in a new construction neighborhood? I love them, too.

In this edition of Melanie Loves Tampa Bay, I'm sharing tips on how to be a smart buyer for new houses.

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Buying a resale house versus new construction are very different processes. We're going to go over the scenario of a builder developing an entire or portion of a neighborhood right now, not a single custom built home. Let me know if you want to talk about that in a future episode.


Yes, real estate agents represent buyers all the time on new construction purchases. It can be confusing for you when you go into a model home and sales representatives provide all of the information and answer your questions, but they work for the builder and you should want someone representing you. Many Realtors like myself are familiar and specialize in new construction, and our input is valuable.

If possible, pick your Realtor before you start going to model homes. Why? Because if you register with a builder at a model home, you fill out that postcard they give you when you walk in but don't tell them you have a Realtor, they may not want to work a real estate agent if you bring them in later on. Now, this varies from builder to builder and most happily work with Realtors, but it can be frustrating for them if a buyer visits the model home three times, never mentions they have a Realtor, picks out their options and then brings their representative in late in the game. From our perspective, we don't want to come in at the last minute either. Our value comes from helping you through the whole process, not just when the papers are about to be signed.

So here is what I tell my buyers: If you happen to check out a model home without me, (which happens all the time because you're out and about on weekends and spot them around town) tell the sales rep that you have a real estate agent who is excited to be involved in the process, give them one of our cards, or even write down their name.

If you find a great house, call your Realtor right away and talk about the next steps. The sales rep may make you feel like you have to act now or sign a contract because someone else is coming by in an hour to put a deposit down. Take a breath, call your agent - that's what we're here for!


You may see that roadside sign that says "Houses Start in the 200s!" Then when you go into the model home, everything available is priced closer to $300,000? That's because the advertised price is for the cheapest model, with no upgrades or lot premium.

So let's break down these costs. First, you have the base cost of the home you chose, not including upgrades. From there, you may have a lot premium - a charge the builder puts on lots they consider better than others. The better the lot, the higher the premium. For example, if there's a pond in the neighborhood, then the homes on those lots will probably have a premium. The lots without premiums are that way for a reason, usually less desirable - backing up to a road or another house. Ask the builder about the lot premium for the one you prefer.

CONSTRUCTION OPTIONS - Does your builder offer a bonus room option or the option to change a living room to a den, or that extended master bathroom? These are examples of construction options. These are not to be confused with the cosmetic options like picking out the color of your kitchen cabinets. Every builder has different construction options, but these costs can really add up. However, adding some of these options during construction is typically the least expensive time to add them. So, you may not need that fourth bedroom now, but if you have plans for that second baby - adding it during construction will be considerably cheaper than doing an addition five years from now.

COSMETIC OPTIONS - These are the fun ones! Going to that design center to pick out your floors and cabinets can be the highlight of the building process, but you can also get a big dose of sticker shock. These costs pile up quickly. My advice is to go in with a budget and stick to it. There are lots of things offered by builders that can be done later at a cheaper price. The two things to focus on are flooring and the kitchen - both items that are expensive and inconvenient to replace later. It is best if you can roll those costs into your mortgage, as long as it doesn't put you over your monthly budget. All of these selections put together will determine the final price of your home.


Builders don't like to negotiate their base prices, they have to keep them similar because they are selling lots of the same models. As long as people are buying their homes, they have no reason to negotiate the price. However, builders are more receptive to negotiating "things" or "credits." Instead of asking for a $10,000 reduction in the price of the house, have your agent ask for a $10,000 credit at the design center that you can use for picking out that gorgeous kitchen. You can also ask for a closing cost contribution. Not every builder is going to give you credits. It depends on how popular their product is, but it certainly doesn't hurt to ask.

Now, if you are interested in an inventory home (one that is already built) that the builder can close on quickly, you may have an easier time negotiating price. Why? Because that home is ready to go or almost ready to go and they don't want to have the holding costs. They may not be willing to do down much in price, but you usually have better luck negotiating with builders on inventory homes compared to pre-construction.


Every builder is different, but no matter which one you go with - pay very close attention to the closing costs. Most large builders in Florida push all of the closing costs (except for the real estate fees and a few others) over to the buyer's side. This can be thousands of dollars in extra closing costs that you wouldn't be paying if you were purchasing a resale house. Now, before you get annoyed or discouraged, a lot of builders offer monetary incentives if you use their preferred lender. This rebate often covers the increase in closing costs. Builders will use that rebate as a big incentive for buyers, but in reality, it is never quite as big as it seems when you compare the closing costs of new construction to those of resale homes.

And what about that preferred lender? Should you use them? Most of my buyers do end up using the preferred lender in order to get the rebate. Do your due diligence and compare rates and costs with other lenders first. An outside lender may be able to rebate you a similar amount and offer lower rates, so do your homework!


Say your builder estimates that it will take four months to build your house. That is their goal, but in reality, they can never be entirely sure when that house will be completed. Builders have to deal with weather issues, materials being supplied in a timely manner, contractors doing work correctly, permits, inspections, and so much more. It is a lot to manage and everything doesn't always move along smoothly.

As a buyer, you need to go into the building process knowing that you may have a delay in closing. Trust me, no builder wants to take longer to close on a house than it absolutely needs to take. They want to close just as much as you do, but there are just some things that are out of their control.

If you are selling your current house, or you have a lease that is going to expire just before you are supposed to move into your new construction home - make a back-up plan in case your new house has a construction delay. See if you can go month-to-month on your lease or if the buyers of your current house will allow you to extend the closing. Check into corporate housing and put your stuff in storage as a last resort. I know, it is a giant pain to deal with, but it happens so frequently that you really do need to prepare for that scenario. If you absolutely can't have a delay, buy an inventory home because they are already built.

I hope this information helps all of you out there thinking about buying a new construction home. Give me a call if you're in the Tampa Bay area, and I'd love to help you!



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Melanie is a Tampa Bay area Realtor with Smith & Associates. She loves Tampa Bay area area, houses, and helping clients buy and sell real estate. She can be reached at 813-368-6084 or

Melanie is a Tampa Bay area Realtor with Smith & Associates. She loves Tampa Bay area area, houses, and helping clients buy and sell real estate. She can be reached at 813-368-6084 or matkinson@smithandassociates.com

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