Are you trying to figure out when to start looking into new home construction? If you are a first-time home buyer, then the answer is easy! Without a property to sell, you can have your dream home built right away.
Although new home construction may feel out of reach, there is actually a wide range of options to fit a variety of budgets. A newly built home may be more accessible than you think.
If you already own a home, then the timing may be more complex. When is the best time to sell your existing property while buying a new home construction?
Here are five questions that will help you decide:
- How risky of a buyer are you? Some people would equate buying a new home before selling an existing home with quitting a job before securing a new one. Others would say that new construction is less risky since you have the potential to get more for your money. Some builders also include contingencies to further decrease risk. You have to decide what level of perceived risk makes sense for you.
- How quickly have comparable homes sold in your neighborhood recently? It’s a great idea to talk to a qualified Realtor about current market conditions in your area. Are similar homes to yours selling quickly, sitting on the market for long periods of time, or selling for much less than asking? They will also be able to pull “comps” so you can have a realistic view into what price your current home might fetch quickly.
- If your current home sells before your new home is built, do you have a plan for temporary housing and storage if needed? Although this may seem like an overwhelming scenario, many would consider this the best-case scenario. In addition to providing financial relief, the push to organize and purge belongings may also be helpful. Once you have a plan, it’s a lot easier to relax and enjoy the temporary arrangements. Make the most of it!
- If your current home doesn’t sell before your new home is built, are you mentally and financially prepared to carry two mortgages? The first question might be whether you are you qualified for a mortgage without having your current home sold. Even if you are technically approved, do you want to take on the potential financial burden. If not, you may want to see if your builder has an alternative plan, or consider renting your first property for some period of time.
- Are you working with a builder that has a good reputation for finishing projects on time? The key to happiness within all of these scenarios is knowing that you are working with someone who will do what they say they will do. Take the time to meet with the builder, find out more about their track record for on-time new home construction, and ask for references.