Buying a New Construction Home in Maryland

New Construction HomeIf you’re thinking of building a new home in Maryland, it's important to understand the options that are available and what to look out for. One could easily break the Frederick and Montgomery County markets into three distinct groups of new homebuyers. It's important to understand where you might fit in and what positive and negative attributes each avenue will bring. As a licensed realtor that is also a registered home builder and the owner of a construction logistics company, I have a unique insight into the build process and I’ve completely nearly 2000 transactions. Chances are, I’ve already worked closely with many of the builders you may be considering and some have outsourced their budget and design operations to my logistics company already. 

Production Homes

The vast majority of people purchasing a new home in this geographic region buy a production home. This would be a new home built in a larger development by a midsize to large homebuilder. This would be a company that builds close to 100 homes a year and in some cases as many as 5000 a year. Many people would say that they're boring and the quality is poor but that's not always the case. I like to compare this to the auto industry. There are very few small custom automakers out there, but they do exist. Of the big box makers, you have very high-quality and very low quality and to somebody who doesn't know what they're looking for, they may not be able to tell the difference.

Most people don't know this, but it doesn't cost you anything extra to bring a professional to a production community to represent you. I have represented hundreds of homebuyers on their purchase at new home communities at no cost to the consumer. These builders and developers build commissions into their upfront marketing budgets so if you bring a representative it doesn't cost you a penny more to buy that home. 

I can tell you that going into a transaction to construct a new home without a representative can cost you quite a lot and in most cases, you wouldn't even know it. 

The new home sales representative and superintendent are there to work in the best interest and the financial interest of the homebuilder. It's important to have a representative on your side as the buyer and to be there not only to negotiate a fair transaction from the start but monitor the progress as your construction progresses. 

There should be a minimum of four progress and walk-through meetings throughout the process of construction and a minimum of one walk-through after construction is complete. At some point, the homebuyer will be in a room with the sales representative and superintendent, both who have spent years or possibly decades in the new home business and ask them to redo something. That can be very intimidating for a consumer who isn't quite confident in their knowledge of new homes in construction. 

In many cases punch out work can be difficult to get completed at your one-year walk-through. It's important to have somebody in your corner looking out for these types of interests. The builders need to present a good reputation in the real estate industry. You may buy one home from them in a lifetime, but a busy real estate office may sell 10 a year for them. It's important that they have a good reputation and maintain these connections and that results in good customer service for you. 

Some people are reluctant to bring a realtor to a builder. I've never understood this because if your realtor is qualified in that particular field it can't possibly cost you anything to bring them, but it could cost you a lot too. What do you have to lose?

Semi Custom Homes

A semi custom home is a good fit for somebody that's looking to get out of the cookie-cutter subdivisions.  In most cases, there are plans that an existing builder has built elsewhere rather than a full custom home that an individual may go to an architect or design build firm to draw from a plan book or scratch.

Typically it is more expensive due to higher site development costs on land or lower efficiencies on construction than a production builder may see where all of the homes are next to one another and identical homes are built over and over again.  

Some builders participate in cooperatives to help mitigate the additional cost and deliver some of the construction deficiencies that come along with the production home on a semi custom lot. In many cases, consumers can shop directly through a co-op to determine the plan and options they want to price out the cost and then interview builders to construct the home. This puts a semi custom homebuyer in a very comfortable position of understanding the cost and the price and allows the homebuyer the luxury of knowing the builder's profit. 

This semi-custom route also awards some of the conveniences of the production home experience. For example, when you walk into a production builder office or work with the builder that purchases from the co-op you can have answers to your pricing and specification questions immediately.  

You can even design your home from a predetermined list of plans and structural options and then edit your finishes through a portal without having to talk to a salesperson in many cases. If it's a true semi custom home where you're making and it's the answer to every question can be quite complicated and in some cases take weeks to produce. In other cases when the builder gives you an answer right away it's because they're guessing and that can come back to have negative consequences or surprises later on in the build process. 

Having an advocate that represents you to explain whether your request may or may not actually be complicated and why is it extremely helpful for anybody who's considering a semi custom home be a direct with the builder or with the builder using co-op support.  What most consumers don't understand is that the changes are not about the cost of the material but about the time it takes to coordinate.

Full Custom Home

In reality, very few people can afford to build a fully custom home. Many people start out looking for this and then after having spent a lot of time and money to get nowhere revert to a semi custom home.

For those that have the resources to proceed with a full custom home I often work as an hourly consultant since there is no commission to be offered in most cases. This does come at a cost to a buyer, however, not having an advocate can cost them significantly more. 

One of the common misconceptions is that a custom home is fundamentally a better quality. This is simply not the case. Due to the time it takes to coordinate all of the plans and specifications and products the builder has to charge the customer more and most people don't realize that the vendor and suppliers have to charge the builder more as well. In most cases, you'll have the same 2 x 4 and a fully custom home that you have in a production homebuilder but the price can be dramatically higher. This is due to the inefficiencies in the process. 

For that reason, if you're looking to build a full custom home you really should have a vision that cannot be found elsewhere and must be created and realize that that will come at a price. 

In the past, I've represented customers building net zero Energy Homes, modern homes the new builder in this market has in their plan inventory. In many cases, people will also build custom homes because they have unique requirements in the overall layout. This could be everything from multigenerational housing needs, additional guest suites, custom entertaining spaces or even hobbies requirements for motorsports or collectibles. They likely do not realize that what they are looking for in a home is not actually all that different from what others are looking for. 

Meeting these requirements can truly be overwhelming but in many cases, a builder can over-complicate the process knowing that their customer won't be able to contradict them. That's why having an advocate through the custom build process can be so beneficial.

Contact us with any questions about buying a new construction home in Maryland.