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The opportunity to build your next home can be a dream come true. Designing the color of your kitchen’s cabinets and countertops, choosing two sinks in the master bathroom over one, deciding on carpet, tile or wood flooring - these are just a few of the exciting decisions you get to make when electing to build your next home.
However, new construction comes with important considerations, such as which builder you’ll choose to work with, what budget you can afford, and how long it will take to complete the build.
What is a new construction home?
A new construction home is a home where the buyer is the first person to live in it. The majority of buyers that purchase new construction work with a home builder to develop and purchase their home.
While some may elect to purchase a home that’s already been constructed, referred to as built on spec, most buyers will choose their home plan with their builder and then wait for the home to be constructed. These homes are often referred to as semi-custom as they provide a limited number of home design plans to choose from, but can include additional features you can customize.
The third option for new construction is to build full custom where you’ll work with a builder (and potentially an architect) to determine every aspect of your new home.
Pros and cons of new construction
The pros of building a new construction home are obvious: you are the first person to live in your home and are often able to decide it’s layout, features, design, and even whether you live on a corner lot or cul-de-sac.
Another pro of building new construction is that your home will include the most up-to-date building standards, including using materials that meet state and local codes, and best practices towards energy efficiency.
However, there are cons to new construction that you should consider. For one thing, the time to complete the construction can take several months if you elect to wait and build.
According to the U.S. Census Bureau, the average amount of time it took in 2019 to build a single-family home from start to finish was 6.1 months, so planning with this timeline in mind is key.
How to finance a new construction home
For many homeowners, financing a new construction home can be difficult as their existing equity is tied up in their current home. As a result, some homeowners will sell their home first and either rent or move in with relatives while their new home is being built.
For those that have the means to provide a down payment, they may be able to kick-start construction, but only able to afford to make a contingent offer to the builder. This means their ability to finalize the purchase of the new home will hinge on being able to sell their current home first. Most builders accept contingent offers but would prefer to have an all-cash or non-contingent offer, as this secures their contract to build the home.
Even with a non-contingent offer, lining up the closing of your home sale and new build can remain uncertain. If your current home sells before construction is completed, you may need to move out and find a temporary place to stay until it’s time to move.
With Orchard, this entire process becomes easy. Here’s how:
The best way to build a new home
When you use Orchard’s Move First service, you can unlock your current home’s equity upfront to purchase your new home. Orchard can give you up to 90% of your current home’s value to put toward your new purchase, making you a strong, non-contingent buyer. You’ll be able to select your home builder, set your design, and begin construction on your new home on your timeline.
You’ll also work with an Orchard Home Advisor: an experienced, local real estate agent who will help you navigate the process and be your builder liaison. You may be wondering: if I’ve already found a builder, what is the benefit of having an agent? Even if you have a builder and construction plan already mapped out, working with a realtor will help ensure the details of your agreement are clear and beneficial on your end.
The best part is that while your new home is being constructed, you’ll be able to continue living in your current home. You don’t move until your new home is ready. No need to secure a rental unit or deal with storage costs; once construction is completed, we’ll line up your closings so you only move once.
After you move in, Orchard will clean your home and prepare it to be listed for top dollar. We do all this for the same fee (6%) as working with a traditional agent.
We also work with dozens of new home builders and have existing relationships. Many of our home builder partners offer rebates and credits at closing, which can really add up. Orchard works with dozens of new home builders, including: Chesmar, M/I Homes, Perry Homes, Meritage Homes, and David Weekley to name a few.
Hear reviews from Orchard customers
“The entire experience with Orchard was amazing!! I was able to still reside in my home while my new house was being built. Once I moved, Orchard quickly sold my previous home immediately. I didn’t have to worry about a single thing during their process. Truly a blessing.”
– Rebecca H., Sold in San Antonio in November 2020
“Orchard’s program allowed us to skip the hassle of a double move and the inconvenience of showing appointments…and we needed to access some of our home’s equity to be able to close on our next home without jeopardizing our savings & investments. We would not have been able to move into our home first without this program.”
– Kati D., Sold in Dallas-Fort Worth in August 2020
“We wouldn’t have been able to make this dream a reality without this company. The ability to buy before we sold our old home without disrupting the family for showings and to still get the full value of our home was wonderful. Everyone at Orchard was incredibly personable and understanding as they walked us through the process of getting our new home loan, buying our dream home and selling our first home. I will be recommending this service to all of my friends.”
– Troy S., Sold in Dallas-Fort Worth in May 2020
Want to learn more?
Get started with a free, no-commitment home estimate below, or give our team a call at (844) 819-1373.