Buying or building a brand new home is an exciting experience. Whether you are buying a new home from a production builder, or building your own custom home, it can be difficult to go through the process alone. Why not work with someone who understands and can help you navigate the home building process? We strongly recommend working with a REALTOR® when choosing to buy or build a brand new home. We'll explain the different types of brand new homes, as well as why you should work with a REALTOR® through this important process. Also, check out current new home listings - a recently built home may already be waiting for you!

Production Homes vs. Custom Homes

What's the difference between a production home and a custom home? In short, a production home is one built from a variety of pre-designed floor plans with variable options. A custom home is one that is completely unique and designed specifically for a particular homeowner and home site. Let's look further into what distinguishes these types of homes.

Production Homes

Production homes are typically developed by large companies (national or local) that specialize in building a high volume of homes. Many of these builders develop entire master-planned communities or neighborhoods. In most cases, builders will provide several floor plans for one neighborhood, with a specific menu of upgrades and customizations buyers can choose from. Design choices made by the buyer usually include flooring, appliances, countertops, and features like outdoor patios and fireplaces. Buyers will also choose a lot within the community on which to build. Builders may also offer speculative homes - or "spec homes" in a community. The builder constructs these homes without a specific buyer and sells it at some point during the construction process, or after it is complete, which limits the choices a buyer can make.

Custom Homes

Custom homes are truly one-of-a-kind builds, where the buyer has complete control over the development and all design decisions. Choosing to build a custom home from the ground up means the options are virtually unlimited when it comes to design, features and materials. Custom homes range from simple to elaborate, depending on the desires and budget of the buyer. Building a custom home also requires the buyer to be much more involved in the building process, from selecting an architect and builder, to making floor plan, design,  and feature decisions. When building a custom home, it is important for the buyer to stay informed about the progress and all decisions made about the build to avoid mistakes.

Which One is Right for You?

There are pros and cons for both production homes and custom homes. When building a production home, the buyer is much less involved in the building process after choosing the features of their new home. However, the buyer is heavily involved throughout the entire process of building a custom home. With production homes, buyers are limited to the floor plans, upgrades, and features offered by the builder. With a custom home, buyers can choose any design features they desire. Costs are also a big difference between production homes and custom homes. Depending on the intricacy of your design plans, a custom home can be more expensive than purchasing a production home. All the costs of building a production home are typically included in the final sales price, with only a small down payment upfront which may include any upgrade costs. With custom homes, the buyer is responsible for every cost along the way, from the cost of architectural plans, to builder fees and raw materials costs. Custom home builders typically outline a draw schedule in their contract which defines what is due at specific intervals along the way, making it important for the buyer to ensure what is suppose to be complete per the contract actually is before writing a check to the builder. 

Why Work with an Agent?

Whether you're building a custom or production home, a REALTOR® is a valuable asset to have on your side. Here are just a few reasons you should work with an agent when building your home.

Experience- When building a custom home or purchasing a production home, buyers still have to go through the process of finding land or a home to purchase, going under contract, negotiating, and finally closing on a property. An agent brings their experience with the home buying process to the table and can guide you seamlessly through each step.

Market Knowledge- Your agent understands the Austin real estate market and will help educate you on home prices in the area and reasonable building costs. Understanding Austin home values by analyzing Austin MLS data with your REALTOR® during your decision-making process will help you make a wise financial investment.

No Cost to Buyer- Many buyers who choose to build homes decide to do so without an agent because they believe they are saving money by not paying the agent's commission. However, it is the seller's responsibility to pay for the agent's commission. In the case of purchasing the home from a builder, the builder will pay the commission. In fact, the agent's commission is already included in the price of your home. It doesn't cost you, the buyer, anything to work with an agent. An experienced agent's knowledge of costs and the process, not to mention the peace of mind they can provide you along the way, is invaluable.

Your Advocate-  When buying new construction, don't be fooled into thinking the builder's representative can serve as your real estate agent. At the end of the day, they are representing the builder's interest, not yours. Working with an agent means you have someone looking out for you - someone that will serve as your advocate throughout the entire home buying process. Whether your agent helps you deal with the emotional stress that often accompanies building, or stands up for your interests in contract negotiations, your REALTOR® works exclusively for you, and is your trusted partner in the building process.

Vendor Contacts- Many real estate agents have fostered professional relationships with lenders, builders, inspectors, and other important players in the home building process. Whether you need an independent framing inspector or an interior designer, your agent will most likely be able to recommend someone they have worked with before and trust to do the job well. Many service providers recommended by our agents can be found on our Preferred Vendors page.

What Can an Agent Help With?

What exactly does an agent do for you during the process of building your new home? Agents help take the stress out of building by guiding you through each step. Here are a few of the things your agent can help with during the process:

What Type of New Home is Right for You?- Building a new home is a big project, so it's important to make a smart decision about what type of home will suit your needs best. Your agent can help you define your budget and decide whether a resale, new production home or exclusive custom home is within your reach. Your agent can also show you comparable homes in the area to help you decide which type of home will work best in the area you're considering. In short, your REALTOR® can help you become an educated home buyer.

Lot Selection- Lot selection is important for custom homes and production homes. When building a home from the ground up, there are many factors to consider when choosing a property, including zoning restrictions, utilities, location, and home orientation on the site. Your agent can help you evaluate each property for it's suitability for building. When buying a production home, the builder will most likely have several prepared lots for you to choose from. An agent can help you select which one is right for your chosen floor plan and make you aware of potential costs such as lot clearing or foundation costs on a heavily treed or sloping lot.

Upgrade Selection- One of the most exciting parts of building a new home is choosing all the upgrades and customizations to make it your own. You may think that certain upgrades will add value to your home, when in reality they will actually reduce the value of your home in the future. Using their knowledge of the market, your agent can advise you on which upgrades will add value to your home.

Lending Options- A lender is one of the most important people involved in the purchase of your new home. We cannot stress enough how important it is to work with a lender you trust. We encourage all of our clients to carefully choose a local lender who can help them secure the right financing for their new home. Your agent will be able to recommend several lenders he or she has worked with before and trust to help their clients.

Negotiations- Negotiating is another important part of the building process. An experienced agent will be able to work with the builder to negotiate a contract that is agreeable to both parties. New home builders typically require buyers to use their contracts, and your REALTOR® can help you understand the contract and make sure every section is written in your best interest.

Inspections- We recommend all of our buyers have their new homes inspected. When building a new home, inspections will typically be conducted throughout the construction process for electrical, plumbing, and other systems. In addition, we encourage our clients to have a final inspection conducted before moving in to uncover any potential problems before closing. Your REALTOR® can recommend inspectors and review their findings with you. Learn more about new home inspections on our Austin Home Inspections page.

Closing- Your agent will take care of all the little details to get you ready to close on your new home. As a buyer, you will have quite a bit of paperwork to sign, and your REALTOR® can help you understand each document. Once the builder receives funds, you are officially the proud owner of a brand new production or custom home!