Buy a New Construction Home in Little Elm
Buying a home, whether new or existing/pre-owned, is a major milestone at any age. One of the biggest financial decisions of our lives impacts our lifestyle in many ways.
Considering a new construction home? In DFW’s competitive real estate market, many first-time homebuyers and established families alike are considering building a new home for the first time. What are some of the benefits and even disadvantages of a new construction home? How does the market impact financial and logistical decisions? Keep reading to discover more.
Comparing New Home Types in Aubrey & Little Elm
There are many ways to define what a home means. Here are some common terms that you will find…
Custom homes tend to be the most expensive in the market and involve years of planning, special financing, and permits to complete. Most custom homebuyers work directly with architects, home builders, and designers, although some buyers may work with a real estate agent to buy land.
Custom homes take longer to build, although buyers can choose from many materials and styles. Building a custom home is a large time commitment for buyers, involving coordination of contractors and overseeing each phase of construction.
Available at Union Park are new construction homes which includes ready-to-build options where a buyer chooses a lot, floor plan, style & finish options, then signs a purchase agreement. Next, a home builder breaks ground and constructs the home.
Also at Union Park are quick move-in new construction homes, which are specs that are already under construction and are offered for sale. Most homebuyers still rely on a real estate agent to help with everything from locating new construction homes to contract negotiations with builders.
Little Elm is one of the fastest growing cities in DFW, with an astounding 143% growth rate from 2020 vs. the 2010 census. As a result, most of the homes for sale are newer, only 5 to 10 years old.
However, these homes are pre-owned and may have had multiple owners since construction, so there is more risk of renovations and repairs. Buying an existing home can also be more stressful with fewer financing options compared to a new home. Most homebuyers rely on a licensed real estate agent for showings, placing offers, and more.
Buying a New Construction
Home vs. Existing Home
DFW real estate is currently in a seller’s market, with very competitive conditions due to an influx of buyers moving to Dallas Fort-Worth in recent years. In a coveted suburban city like Little Elm, which is experiencing explosive population growth and increased demand for homes, there is limited existing home inventory.
All of these factors make buying a pre-owned home difficult, to say the least. From selling an existing home, timing the market, moving from out of state, and completing the school enrollment process, and you have a situation that can be extremely difficult to navigate. Simply put, the process for buying a new construction home is much easier and less stressful than a pre-owned home. Find out more differences below and discuss the following with your real estate agent.
Problems with Existing Homes*
• Because there is so little pre-owned home inventory available, you may need to buy a house sight unseen.
• Your first offer on a home will rarely be accepted now that bidding wars are commonplace.
• Bidding wars can result in you making an offer way over the home’s asking price.
• Unconventional financing options such as FHA loans are unlikely to be accepted in a seller’s market.
• Even if you qualify for traditional financing, all cash offers are becoming more common because they help buyers close the deal.
• Closing costs and home repairs may be needed quickly after purchase, straining budgets.
• Waiving appraisals and home inspections is typical in this competitive re-sale market.
• Buying an existing home “as is” means successful bids will include few, if any, concessions.
*Always confirm the current market conditions with your real estate agent or builder sales representative
Benefits of New Construction*
•Some DFW new home builders accept multiple offers, but it is rare. If you want to avoid a bidding war, purchase a new construction home.
•The price of a new home is final and locked in, making financial planning easier.
•New home builders accept FHA loans, VA loans, and even USDA loans which deliver a lower interest rate.
•Less cash is needed up front to purchase a new construction home, as unconventional loans require less money down.
•A new home doesn’t require an inspection, although buyers can tour model homes before purchase.
•Working with a real estate agent for a new construction home can deliver benefits in the final contract including certain concessions being secured from the home builder.
•Your new home will need no repairs for some time since it’s new construction and most warranties will cover major repairs for 5 to 10 years.