What is the Process of Buying a New Construction Home in Chicago?

When you buy new construction, your home will likely be more modern and be up-to-date with all of the latest construction standards. Plus, depending on when you decide to buy during the construction process, you may be able to have a say in some of the design choices. And, unlike buying pre-owned, you won't have to worry about coming into a home that needs a lot of repairs and projects. Before you decide to buy a new construction home in Chicago, make sure to consider the following:

Consult Your Real Estate Agent

Your real estate agent will be your greatest asset when looking to find a new construction home in Chicago. They're typically the first to know about any new development projects in the area and can keep an eye out for new builds in any neighborhood or area you are looking to buy a home. Plus, your real estate agent may know more about the builders and their reputation from other buyers or sellers they have worked with. Between their experience and connections, they can steer you toward or away from builders based on their previous work.

Do Your Own Research

It's also in your best interest to do your own research into the builders of any new constructions you are looking to buy. Go online and see if you can find any reviews on the builder to understand their previous work better. The Better Business Bureau recommends checking with the National Association of Home Builders to find highly qualified builders in your area. You can also ask around on NextDoor to see if anyone in the area has worked with them and hear about their experience.

Tour a Model Home

To get a better understanding of what your home will look like when it's finished construction, see if you can tour a model home or other home in the same development. This will give you a better idea of the home's building quality, layout, and overall look and feel. Make sure to note that not all things you see in the model home will be the same as what you get in your own house. Plenty of builders will include premium finishes to up-sell potential buyers on features for their own homes. Make sure you know what is included in the home you will be buying before entering the example home.

Making a Deposit

When you find the home you want to purchase, you will need to provide a deposit, even if it's still under construction when you sign the contract. This deposit could be up to 10% of the home price. Your real estate agent will go over the contract and make sure you understand all of the terms and what you will be responsible for. Make sure there is a completion date in the contract. Delays may happen, so make sure your contract includes plans for recourse in case that happens.

Inspecting Your New Home

Typically, a home inspection will be conducted about a week before your closing date. This gives the builder the chance to fix any issues discovered during the walkthrough. While you do your walkthrough, create a punch list of outstanding items for the general contractor. This punch list may include damaged materials like drywall, missing hardware, issues with the plumbing or electricity, and any other defective items like the thermostat. Make sure to be very clear when creating your punch list so that anyone reading it can quickly identify what you are referring to. You'll want to bring blue painter's tape, paper, and a pen for your walkthrough. As you walk through the home, mark any issues with a piece of blue tape. On your paper, itemize the areas you taped to identify the problems you found. Make sure to stay in communication with your contractor to ensure everything gets resolved promptly.

Additional Costs

You should keep in mind some other things – when you buy a new construction home, you won't know what your annual taxes will be until after you close. If you purchase a condo, the same is true for HOA fees. When planning out your budget for buying a new home, make sure to take that into account. Additionally, be aware that lenders assume 2% of the purchase price for the sake of underwriting the loan. Use this as a ballpark when estimating what your ownership expenses will be.

Overall, buying a new construction is a great way to have some say over what your home will look like. Depending on what stage of the project you get in on, you have the opportunity to customize some of the aspects of the home to your liking.

If you're ready to start looking for new constructions in Chicago, give me a call, and we can get started!