For several years, cranes building new offices and condos have crossed the Boise skyline. Entire neighborhoods rise from former farms or grassy hillsides. As the city’s growth continues, more of my clients show interest in buying new construction in Boise. Their reasons range from the lack of inventory to wanting to avoid the projects associated with aging homes. The process of building a home can be complicated. Attention to detail and follow-through are imperative. My clients trust me to guide them through this process. In this blog, I outline my approach. If you’re interested in buying a brand new home, here’s what to consider.
In larger metropolitan areas, a single team builds and sells most new construction homes. That team includes the developers, builders and real estate agents. This can be an adjustment for buyers who come from out of state, where they typically walk into a model home and buy the house directly. Idaho exhibits more of the wild wild west model in this regard. Builders have only had to be licensed for less than 15 years. At one point, Idahoans joked that all you needed was a dog, a truck and a toolbox to call yourself a builder in Idaho. With the growth of the city at its current pace, licensed builders pop up everywhere. With my experience, I can ensure you’re in thoughtful hands when it comes to choosing or finding the right builder.
Many buyers who decide on new construction want to simply choose a lot, find a builder at the Parade of Homes and build a fully custom home. In my opinion, this approach puts the cart way before the horse. With land at an all time high and lots being scooped up by builders and developers, your favorite builder may not have a place for you to build. The opportunities to buy lots outright are slim. Instead, I help my clients discover where they want to be and then we look into what lots are available and what builders are attached to those lots. It doesn’t cost anything to be represented, and it’s best to have someone negotiating on your behalf on this new frontier.
Types of New Construction
1) Professional developers like Brighton, Todd Campbell and M3 Companies purchase large parcels of farmland and build complete communities. They often opt to bring in their favorite builder teams, who offer mostly semi-custom homes. This means they offer a plan that you can customize in some ways. For instance, you’ll be able to choose the finishes and color scheme. While this can seem limiting, taking the guesswork out of the build can reduce obstacles down the road. These builders sometimes partner with a real estate agent or brokerage to sell these homes, but the opportunities can be difficult to find if they don’t have representation.
2) A second option that’s less typical in Boise involves the types of building companies who develop, build and sell all on their own. In Idaho, this includes companies like CBH Homes, Boise Hunter Homes and Coleman Homes (A Toll Brothers Company). CBH Homes remains the largest builder in the state. Owner Corey Barton is an Idaho native and builds in a reasonable price range. In their model homes, you’ll be able to see what’s available, choose a plan and see the finish and upgrade options for the homes. They often have on-site Realtors and will want to know who your representation is if you show up on your own, asking you to register on arrival. If you don’t add a Realtor on your registration, you lose your opportunity for outside representation. When I have clients who visit model homes, I pre-register them.
3) There are also small local builders who tear down older homes and build on it or they purchase in-fill lots or vacant land. These opportunities to build are rare, and the homes are typically not customizable at all, as they’re only sold when complete.
4) Some buyers also consider purchasing a “spec/model home.” If builders have lots available, they advertise these as “to be built” options. Additional listings might say “new/never occupied” or “under construction.” These are “spec” homes that were designed by the builder, with all the finishes selected and no changes allowed. Often, these are deliverable faster than if you were to start from scratch. With low inventory, these have been life savers for many of my clients who want new construction but lack time.
Location, Location, Location
As always, a home’s location determines everything. I help my clients figure out first where they want to live, starting with the town, and then narrowing it down to a neighborhood. Finally, I suggest that if there are available lots in that neighborhood, that we zero in on their desired lot so that they can find out what builder has it. Then, I help them review that builder’s portfolio online, his plans for the lot and set up an appointment to discuss the design.
I also point out that if a buyer prefers to go out and buy a plot outside of an established community with an HOA, to be cautious. Be prepared to buy enough acreage to protect themselves against the future growth of the region. Otherwise, they could end up with a Costco or freeway in their backyard.
Another conversation I have with clients is whether or not new construction will fit into their budget. Finding a fully custom home in Boise will cost at least $1 million. Typically a new construction home, even one that’s affordable, will cost at least $400,000. Not to mention, earnest money on a new construction home typically runs between 5 and 20%. This often depends on whether the builder carries the financing or if you need to obtain the construction loan.
As they say, time is money. New construction can also take a long time. It takes about one month to acquire a permit after getting under contract, and most homes take a minimum of five months to build once a plan and permit are confirmed. Some builders have a standard eight-month build time, while a fully custom home can take 10 to 12 months.
Purchasing a new construction home can be a complicated process. Realtors help to simplify and advocate for you, and it doesn’t cost anything to be represented. I have a long history of knowledge in new construction. I‘ve built two homes for myself and new construction makes up 30% of my business. I have ample experience working through the process. I know the right questions to ask at the outset and the value of a high quality home inspector. Yes, even new homes need to be inspected by a third party. I also ensure we look into the fine print on warranties and lien releases. If you’re leaning in the new construction direction, definitely give me a call or send me an email at firstname.lastname@example.org.