My home buying experience was a very memorable one for me as this is my first home so I wanted to do a recap to capture the entire journey.

Surprisingly, this is not the first time I will be living in a new build home.

The first time I stepped foot in a brand new building was my second year of college when my residential building had just finished being built and luckily my year would be the first to live in it.

To say that the experience left a deep impression would be an understatement. So here I am, a decade later, purchasing my own new construction home.

There were pros and cons to choosing a new construction home. Of course, it’s nice to know that you’ll be the first to live in your home. It’s also nice to be able to customize (mostly) everything to your liking from the start.

I especially enjoyed the route I took when I hear about bidding wars that’s been going on with the traditional home buying experience. 

Of course, there are also the cons. It took an entire year for me from reserving my lot to moving in. That is not a feasible option for some people. New build homes are notorious for having delays so it is very hard to plan around the move.

There are usually extra costs associated with new build homes as the price that sellers put out are usually only very standard options that require additional money for upgrades. For reference, my upgrades alone were over $30k. And I actually really held back to only picking necessarily updates like floors and cabinets!

In my mind, the home buying process for a new construction home come in four phases.

1st Phase – Reserving the Lot

The first and most important step in buying a new construction home is getting the unit itself, duh!

This was the most nerve-wracking part. There are only a certain number of units that are sold in a community and in my experience they are done in phases.

The earlier “phase” you get in, the better the price. In my case, the price for the same type of unit went up by $10k each phase. 

Builders differ on how they choose who gets to pick first. I know that there was a bidding process for one community. For mine, it was based on how quickly we submitted our application when it opened. I submitted mine within 30 minutes of the application opening and still could not get in until the third phase!

Our application also served as our assessment for the builder loan. While I would have a whole year to beef up my savings and increase my down payment between reserving the unit and actually having to put my down payment at closing, I honestly was scared that I did not have enough money at the point of the application.

I was confident that by the time the building completed and closing happened, I would have enough down payment. However at that moment, most of my money was still in my Roth IRA account which I would need to liquidate. 

For full transparency, knowing this dilemma, three months prior to the application opening, my mom gave me some money to add into my bank account.

This is important because money can’t just come out of nowhere. It has to be “seasoned” in the account otherwise your lender will need a trail of where that money came from. As most lenders look for a 2 month history of all bank accounts, any money received would have to be done at least 2 months prior to the application to not be questioned.

So I was really fortunate that my mom trusted me enough to lend me money that she knew I wouldn’t give back until I closed since I didn’t want to trigger any red flags with transferring money out even once I reach my down payment with my own money.

I think it’s important for me to acknowledge that I could not have done this on my own and how privileged I am to have a family with the financial means and trust to help me.

It also allowed me to keep the money I have in my Roth IRA to keep growing rather than having to take it out. This was a huge deal as the market was going very strong in 2021 and I enjoyed quite a good return that year.

Reserving my lot required getting on a Zoom call during the pandemic time and waiting for my name to be called. 

This was not without its own drama.

We had to wire a deposit (different from down payment) to reserve the lot which was the second nerve-wracking moment in this process thus far as my savings account was with an online bank that had issues confirming my wire until the day of my deadline!

I even debated moving my money out of that online bank into my checking account after that ordeal which has a brick-and-mortar branch near me.

But alas, the stars aligned and I was able to reserve my lot!

2nd Phase – Design Center

After some document signing over the next few weeks, a Design Counselor reached out to me to start scheduling the customizations of my home.

As an indecisive person and let’s be honest here, not exactly a creative one either, I had a very hard time choosing what I wanted in the home. 

There were so many things to choose from! Starting from the big ticket items like floor (my floor alone cost $16k!) down to the little details like cabinet handles, it was a lot to take in.

Even now, I think I have some regrets about the backsplash I chose. But at least that can be covered or fixed more easily than say, floors or cabinets.

I was able to go to the design center a couple of times before finalizing my order. But keep in mind that prices just kept going up every time I waited. So I felt under pressure to lock in my choices within two months.

I love everything else about the design choices in my home but realized the one item (the backsplash) I didn’t spend as much time or went back for was the one I ended up not loving. 

If I could go back in time, the one thing I’d do differently is not care about how much I have to keep going back and forth until I 100% love it.

In all honesty, I would also probably trust my feelings less, now knowing I don’t exactly have the best eye for design and simply go for more neutral looks. 

The only non-neutral look in my home is my backsplash which I ended up liking the least (can you tell I just can’t get over this backsplash?).

3rd Phase – Waiting

Most of the stress concluded in the first 2 months. The rest of the time, I just did some occasional visits to the site to ensure that things were properly constructed. In the future if I buy a new construction home again, I would probably spend the extra money hiring my own inspector to inspect the home prior to dry walls being placed and once more prior to closing just for the peace of mind.

Other than that, it was really nice to be able to stop by and see the home getting built from the ground up.

There were a lot of delays during this period. I was expecting the home to be done by the end of 2021. It kept getting delayed month by month. The final expectation was actually Summer of 2022 so I’m actually quite surprised that they were able to finish it in Spring.

Luckily I was living at home, but I’m sure it was a hassle for people who had to deal with leases when the exact timeline is unknown.

The yearlong escrow process was also stressful knowing that I had to keep my job the entire time. My job didn’t feel very secure and I had only been with a company for about six months at the time. 

I also was overworked and was ready to quit my per-diem 2nd job but was terribly afraid that this would ruin my mortgage application. Luckily I chose to come clean and speak with my then builder loan officer who assured me that she had actually only taken my primary job into account when assessing my application and I should be able to quit the second job with no consequences.

4th Phase – Closing

For all the waiting I did, I was surprised by how little notice I got for my expected closing date. A little over a month prior to closing, I received two dates: my final walkthrough and my home delivery dates which were a week apart. Closing wasn’t guaranteed yet but likely to happen the day after home delivery.

This was a crazy month as I had to rush to shop for quotes now that I actually have a closing date. While the builder’s lender is usually preferred, I was able to get over 1% interest rate lower with a different lender so I decided to take the risk. 

Unfortunately, I did not lock my rate in right away as I was waiting for the builder’s lender to see if they could match which I really should know better that they likely could not. Because I did not lock in the rate that day, the weekend passed over and by the time I locked my rate on a Monday, the interest rate had just gone up by 0.15%! 

At that point, there was nothing else I could do. 

Other than that, I am glad that I had a good loan officer who was able to get me across the line despite having to rush everything at the end because of miscommunication from my sales associate!

After this hiccup and quite a few back and forths between my sales associate and loan officer to make sure I was still set to close on time (I would incur a penalty of $250/day for closing delay), I was able to sign just one day prior to receiving my key the next day.

Luckily, there were no issues with the wire transfer this time around. I was able to reach out to my escrow officer the day before signing to get the wire info sent to me so I could initiate my wire transfer that night to give myself a two-day clearance. The wire went through the very next day.

Now

So what happens now? Well, I’m still behind on a couple things. I decided to wait on getting window treatments after my home was built so I could get a better visual. After measurements and ordering the material, I’m expecting that to take at least a couple weeks to be installed. 

I am also on the hunt for a fridge and washer/dryer. I did have the option of buying those from the builder which to be honest I’m having quite a bit of FOMO for not choosing to go with one of their options.

Everything (ok that’s an exaggeration but not by much) is on backorder. And the exact fridge that the builder sold is not only on backorder now but even if it was available, it’d be $300 more! Good thing I actually like a different brand better otherwise I’d really beat myself up for it.

So there it is! My recaps of the good, bad, and so far nothing ugly yet. Fingers crossed!