Austin New Construction | Realtor Tips and Tricks to Buy a New Construction Home in Austin Texas

You’re considering buying a new construction home in Austin, and you may have a few questions or have no idea where to begin.

You’re totally starting from scratch. We’re gonna get into all of that today. So stay tuned.

I’ve got six realtor secrets to help you buy a new construction home in Austin.

I’m Tiffany Moore. I’m a realtor posting blogs and videos regularly about what it’s like to live, work, play, and love your life in Austin, Texas.

We are talking about new construction homes in Austin. I love new construction. It’s so exciting. It’s a lot of fun. I have two buyers who are buying new construction in entirely different areas of town, with builders on opposite ends of the spectrum. It’s just a lot of fun.

So today, we will focus on new construction homes in planned, large communities with pools, schools, parks, and all that good stuff. It’s a different process for buying new construction, like a custom home or a one-off in a neighborhood.

We’re talking about big planned communities today. So I’ve got folks from all over the world who are moving to Austin, Texas, and they’re reaching out to me to find their perfect home. I absolutely love it. So if that is you, if you’re thinking about moving out here, go ahead and gimme a call, shoot me a text, or send me an email slide into my DMs. However you wanna get in touch with me, I’ve got your back when you’re moving to Austin.

The first secret to buying a new construction home in Austin is to use a realtor. Many people think that when they go into the model home and they talk to the sales rep that they can answer all of their questions. They know everything there is to know about that house, which is incredible because the sales rep works for the builder. They don’t work for you.

You should work with someone looking out for your best interests, what you want, what’s best for your family, and what you need. The representative for the builder, they work for the builder, and they’re looking out for the builder’s best interest and what the builder needs.

It’s best to pick your realtor before visiting a model home. Usually, when you get there, they will ask you to fill out your information on a little card or their sign-in sheet. That’s where you indicate that you have a realtor, or you can just let the sales rep know, at least give them your realtor’s name.

If you have a business card, that’s even better. Go ahead and hand that over. Most builders are okay working with realtors but want to do it as early as possible. So they get all the lines of communication laid out in the beginning.

What the builders don’t like is if you’re coming in like three or four times to pick your floor plan and then go to the design studio and pick out all your other options, and then four weeks before closing, oh, all of a sudden, you have a realtor. That’s really frustrating for them.

It’s also not fun for the realtor to be brought into something towards the end. Usually, you’ve run into an issue or a problem that you need someone’s help with.

If the realtor is there from the beginning, they can help smooth many issues over, explain things, set expectations, or negotiate with the builders to make things right and prevent blowups before they even happen.

If you have a realtor, try and get them early on before you go to the model homes. Make sure you connect everyone so the lines of communication are open the whole time.

If you stop into a model home, and it turns out that it is your dream home, you want to buy it. You’re super excited. And then suddenly, the sales rep tells you you must sign now. Someone coming in at noon is about to put down a deposit. If you want this house, you have to sign right away.

Stop everything, give your realtor a call, and just take a breath. That’s why they’re there for us to help you navigate all of this.

Secret number two is that there’s a vast spectrum regarding prices and costs for new construction.

So often, you’ll be driving down the road, and you see a giant billboard at the end of the road that says, like, new homes starting in the three hundred. You get super excited and go into the model home, and it’s gorgeous. It’s amazing.

The model home has every upgrade you could get because they want to put their best foot forward and show you how awesome your home could look.

It also comes with an excellent price tag. So the homes may start at 300, but once you pick out all the stuff you want in the home, suddenly it’s bumped up to like 400. And you’re just like, what happened? I thought I was getting a house for 300. Where did those 400 come from?

There’s just a wide variety of different options that you can pick to make your home even better. So what are the things that go into the price and add up the home’s final cost?

The base price of the home is the floor plan. It’s the standard floor plan with no upgrades, options, or premiums. It’s basically the design of the home. This is the bottom level. And here’s the price for that. And that’s usually the price that’s advertised on the billboard. It’s the bottom-level, lowest-cost home.

So another cost that’s gonna increase how much you pay for the home is a lot premium. So you go to different neighborhoods and see this one on the lake. That’s gonna have a lot premium, something that backs up to the greenbelt in Austin.

We have a lot of trees and a lot of greenery. It’s preferable to have trees as your backyard neighbors instead of people. That’s gonna be a lot premium.

A lot of the new construction is going on in Texas hill country with a lot of views. So lots with views are a higher premium than lots without views.

So those are some of the things that are going to increase the cost of the house, not just the floor plan of it. So if you find a lot you like, ask about the lot premium for that specific location.

Another thing that makes costs go up is construction options. So these are different from cosmetic options, which are like colors and cabinets and stuff like that. We’ll talk about that in a minute, but construction options are where you see on a floor plan where this room is an office or can be upgraded to a second owner suite.

So you may not need a second owner suite right now, but five or six years later, your mom has to move in with you, or your father-in-law has to move in with you. Those transformations are so much cheaper to do while the home is under construction than for you to renovate the house or put an addition on when you realize that you need these things five or six years later.

Something to think about are what those options are; if you decide to take that upgrade, that will increase the house’s cost.

The other thing that can affect the cost is cosmetic options. This is the cabinet color, the countertops, the flooring, the paint, and all that stuff.

Usually, the most fun part of buying your house is when you customize it and make it your own; those things can also come with some colossal sticker shock.

And there are a lot of upgrades that you can do cheaper than the builder’s gonna charge you for. The things that I like to tell my clients to focus on are the kitchen and the flooring. Those things will be the most expensive and significant hassle if you change them. So better to just get what you want right now and roll it into your mortgage.

If it doesn’t make your monthly payments go too high, that’s the easiest way to ensure that those complicated and inconvenient things are just done, out of the way, and you love them.

So every home builder is different regarding what cosmetic options they offer. For instance, D.R. Horton offers no options. D.R. Horton is really cost-focused, and they plan their entire community down to the colors of the cabinets and the floors home by home. So everything is predetermined when you buy this one house in D.R. Horton on this one lot.

There’s nothing that you get to pick out on your own, which is a pro for some people and a con for others. If you really want your house to be as custom as possible within this planned community, that’s not technically a custom home, then there are better options than D.R. Horton.

But if you just want a perfect home and a lovely community, you couldn’t care less about countertops, cabinets, and colors, D.R. Horton’s is a perfect option. So definitely check them out.

And I’ve got clients who are building in a completely different area of town out in hill country, where they’re probably gonna be able to pick their countertops, cabinets, the flooring, all

of those things come at a cost. So you really have to figure out, is it worth it for me to just have someone else handle it, to just not have to deal with the inconvenience or the hassle – hiring contractors, selecting your options. You just pick something, and someone else does it for you. And is the monthly payment okay if you roll that into your mortgage?

So custom costs and cosmetic costs are definitely options that can be huge if you decide to just go buck wild and get everything, or you can limit it to the big things that will be more inconvenient and costly down the road.

Negotiating with builders is the third secret when buying a new construction home. So builders are not likely to negotiate on the cost of the home for many different reasons.

One of the biggest ones is, in Austin and in most other areas in the country, we have a vast, crazy seller’s market going on right now, which means that buyers are just like coming out of the woodwork because the mortgage rates are so low that sellers cannot keep up.

There’s like zero housing inventory. There are no houses to pick from. And that also goes for new builds; with all the construction that’s going on in Austin, none of the new construction companies can keep up with the demand. They are selling out of their homes at record rates.

So sellers need more incentive to negotiate with you on price. Unfortunately, that’s just the way it is. So what they are gonna be more flexible on is credits.

So instead of you asking for $10,000 off the house, instead, you can probably ask for $10,000 towards upgrades, like the crazy cosmetic options that we talked about or the construction options converting an office to a second owner’s suite.

You can apply those toward closing costs, which we will discuss in a second. Not every builder is gonna wanna negotiate with you or give you credit.

Every builder is different. And it goes back to what we discussed, the whole supply and demand thing, if they don’t have to. And there are literally five people in line behind you that will take the house with no negotiation. They’re probably gonna pick one of those five people.

So that’s something to think about when you ask for credits. Not everyone will agree to it, but it never hurts to ask. If you do wanna negotiate on price, an option that you may find more success in is with an inventory house when that’s either completely done or nearly done.

Again, we’re still in a crazy seller’s market, but you have more of a chance of getting a builder to negotiate on one of those homes than they do a home that is being built.

If a home is done and it doesn’t sell, the builder has to pay costs on it every day that it sits there and doesn’t sell and is still waiting for someone to buy it.

So it’s in their best interest to get the home sold as soon as possible. And if that means they have to lose five or $10,000 to do it, they might.

Now, again, if you’ve got 10 people in line behind you who wanna buy that house for the asking price, they’re probably not gonna negotiate with you on price, but you’re definitely gonna have a better opportunity to do that on a home that’s either finished or almost finished than one where you’re right at the beginning of the construction process.

The fourth realtor secret for buying a new construction home in Austin is closing costs. Every builder is different. But in most cases, new construction homes will have higher closing costs than you will for a usual resale home. The reason is that most of the closing costs the seller pays for in a resale home, the builder just passes onto the buyer.

To make up for that, they offer you these incredible rebates to cover those costs. So it may look like they’re giving you like three or $4,000 back at closing, which is like, oh, sweet, we’re gonna be able to put that money in our pocket.

It’s just making up for the fact that you wouldn’t have had to pay for those costs if you were buying a resale home.

So plan on spending about the same amount in closing costs, whether you buy resale or new construction if you get those builder incentives for the closing costs.

Usually, the builder will give you a rebate for closing costs if you use their preferred lender. So what is the deal with the preferred lender? Should you use them?

Most of the buyers I work with for new construction use the builder’s preferred lender to get the rebate for closing costs. They usually have pretty competitive interest rates, but you still want to do your homework and make sure you’re searching around and talking to at least a couple of other lenders to ensure the interest rate is competitive.

Sometimes those lenders can give you their rebate for the closing costs, and you can get a lower interest rate.

You still have to do your research. Just because the builder offers you this rebate, only sometimes go with them. You may still get that deal from a few other lenders.

The fifth secret is inspections. Yes, you can, and you should inspect new construction homes.

There are actually two that I recommend for my buyers. The first one is done before the drywall goes up. You just want to get in there and make sure that the plumbing and wiring look good. You can’t see any of that stuff once the walls go up. No one’s gonna break them down for your inspector. Unfortunately, that just doesn’t happen. So that’s important to do before the drywall goes up.

The other inspection that you do is right before you close. It’s an inspection you would do for any resale. This includes checking and making sure that the water’s the right temperature.

There are no leaks where the gassing is bonded, and no significant safety hazards exist. That’s what we’re looking for when doing a home inspection.

So once you have your inspection report, you hand it over to the builder, and they add that to their punch list of things to knock out and correct before closing and before you move into your home. This is to ensure everything works as it’s supposed to when you do move in.

Many people don’t inspect new construction because the builder usually offers an excellent home warranty. And that’s great. That’s a fantastic perk they offer, but it’s much easier to prevent an issue than to spend time and money cleaning it up.

So you do it anytime you can nip something in the bud ahead of time. That’s why you get a realtor on board when you first start looking. That’s why you get a home inspection done.

These things help you avoid or prevent any major issues from happening, which will be much easier and less stressful for you than if something comes up, like you’ve got leaky pipes in the kitchen, and now you’ve got this flood in the kitchen.

The home warranty might cover that, but do you want to deal with that hassle? And wouldn’t it have been fantastic to catch that initially and not have to worry about it?

That’s why I always recommend home inspections, especially for new construction. People make mistakes, and things happen. That is the better choice if you can clean something up before moving in.

The sixth secret for buying a new construction home in Austin is understanding the timeline expectations.

So when a realtor says a house will be ready in four months, understand that that is their goal. That is not their promise.

A lot of things can happen that delay the construction of the house. For instance, weather –  if you’ve got a lot of wind and rain. Let’s say you are in Houston and in the middle of hurricane season; there’s a good chance your home will be delayed by all the wind and rain.

So weather can definitely cause a significant delay. Another issue that can throw a wrench in the estimated completion date is the materials being delivered.

2020 was a crazy year. Whether you were in the industry of printing t-shirts or building houses, the materials that you needed were on backorder.

That’s just a fact, and there’s nothing that the builders can do about it. If they don’t have the materials, they can’t build your house, which will cause a delay.

The other is getting the labor and the people there to do the job, get the inspections, and get the permits done. There’s just a lot that goes into building a house. It’s like it takes a village to build a house. It really does.

Use the estimated completion date as a ballpark figure. It definitely shouldn’t be set in stone, and you shouldn’t rely on that date concretely to plan many other things in your life.

No builder wants to take longer to close on a house than is absolutely necessary. As I said, they get paid once they close. So no one wants to close on that house more than the builder.

They’re just some things that happen to be out of their control. So if you’re selling your current house before you move into your new construction home in Austin or renting, there are a few things you can do now, knowing that your closing date is not a definite closing date. It’s a goal that, hopefully, we all make it to.

So if you’re selling, a few options are asking the buyer to extend the closing date, or you can lease back your home after you close it so you have somewhere to live until your home is done.

If you’re renting, talk to your landlord to see if it’s possible to go to a month-to-month rent. That way, you can have some flexibility in the closing date for your new home. It is gonna be a little bit more expensive to go month to month, but at least you have somewhere to live.

And if none of those options work out for you, your last resort is to pack your house up, put it in storage, and move into an Airbnb for a couple weeks. It could be better. It’s the worst option, but you must have a roof over your head.

It’s better than living in a hotel. It’s gonna be a lot cheaper than living in a hotel. It could be better, but it’s something to keep in mind if you have to.

If you just cannot have a delay (for whatever reason in your life, a delay will just ruin everything), you may want to look at homes already in inventory that are either finished or about to be finished. That way, you know that the closing date is much more concrete.

You can close on a home that’s already done in 30 days. For a home that’s about to be done, you can still probably close on that in 30 days.

What causes the delay in closing homes that are already done or about to be done? It’s just the bank doing their paperwork. So look at the current inventory houses if you cannot have any delays whatsoever.

So if you’re considering moving into a new construction home in Austin, there are many options for you. So many different areas of town, really cool neighborhoods. There’s just a lot of excellent stuff going on right now.

But if planned communities and shiny countertops and bright windows and neighborhood pools and all that is just not your jam, then you’ve gotta reach out to me; I’m gonna get you into the right neighborhood and house so you can start living the life you love and are passionate about.

The only way I can do that is you gotta give me a call, shoot me a text, send me an email, or slide into my DMs. Contact me, and I will get you in the right spots. You can start loving your life in Austin now, and I will see you later.