Ask Val: What It’s Really Like To Buy A New Construction Home

This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: What are the differences between buying a new house versus an existing home? Should you still have a realtor if you’ve already picked out the new construction? Do you need to be pre-approved for a loan if you are using the home builder’s partnered lender? Are there still closing costs?

Answer: The decision to buy a newly built or resale home is ultimately best made by each home buyer. There are a number of key differences you should be aware of when buying new construction that may help you decide what’s best. Here’s what to expect:

Builder Contracts

Most builders use their own contracts, not the normal Northern VA Association of Realtors (NVAR) contracts. As such, the language tends to favor the developer and it’s very important to read their contract a few times, understand what you’re agreeing to and don’t be afraid to ask questions or contest specific language you’re not comfortable with.

Higher Earnest Money Deposit (EMD)

2-3% EMD is appropriate, but most developers usually require additional security of 5-10% EMD which makes sense when they’re doing a custom build because they want you to be more invested in the finishes you’re choosing.


In a normal re-sale negotiation, each counter is delivered in writing with the signature(s) of the seller. Most developers will only make verbal/email counters, but the buyer is expected to put their (counter) offers in writing with signature(s). Once all terms are agreed to, the developer will finally sign.

Custom Design

Being able to select your own finishes and design a custom home is one of the most appealing reasons to buy new construction (note: not all projects allow for customization), but it’s a blessing and curse.

For some, going to a showroom to select appliances, flooring, cabinets and countertops is thrilling. However, builders are on a tight schedule and require selections to be made on time, so indecisive buyers can get overwhelmed by these choices and end up disliking the process. This is particularly true if there isn’t a model unit or it’s not modeled after your tastes.

Determining Value

In many cases, developers deliver a community that’s the first of its kind in the neighborhood. Without true comps, it’s much more difficult to gauge value and the chances of the developer significantly over or under pricing a project increases.

Given that uncertainty, some of the best deals can be had in new construction, especially at the beginning of the sales period. When there are fewer comps, you should negotiate more aggressively.

Brand New

Of course, buying new construction means you’re buying brand-new everything, with fully intact warranties. In addition to the manufacturer warranties on the systems (water heater, stove, etc.), most developers also guarantee their work for years to come. You also have the benefit of the latest codes to maximize your home’s energy efficiency.

Do You Need A Realtor?

Absolutely (shocker!). The builder’s rep is working for the builder, not for you. Your Realtor can walk you through this process and make sure you are protected, as well as negotiating the best deal and contract terms. Just like a regular resale transaction.

Some buyers mistakenly assume that not being represented by an agent will lead to a price reduction or other discounts from the builder. Builders do not want to reduce their prices because it sets the comparison price for future home sales in that neighborhood.

Most builders will require that the real estate agent accompany the buyer on their first visit to the builder’s model home. Make sure you don’t just stop by the sales office without your agent, you could lose the opportunity to have your own representation.


I highly recommend getting pre-approved for a loan even before looking at homes. That way you truly know how much you can afford.

Some builders offer incentives or credits if you use their preferred or in-house lender. The builder’s package is not always a better deal than a loan from another lender without the incentive. That means buyers must shop around and compare rates, loan originating costs and lender credits.

Closing Costs

Closing costs are always involved. Expect to pay somewhere between 2 and 3 percent of the purchase price of the home in closing costs. You can negotiate with the seller to pay all or part of the closing costs as part of your purchase deal (that could be one of the incentives offered by the builder).

If you are interested in new construction near Tysons’, there are some great condo and townhouse projects on the market like Metro Row in Fairfax/Vienna, and Verse in Tysons. Make sure to check them out!

If you’d like a question answered in my weekly column, please send an email to [email protected]. I hope to hear from you soon!

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, 703-390-9460.

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