Late last year, eager homebuyers lined up overnight at a new-home community in the Dallas suburb of McKinney, TX to get first crack at a new phase release. Shades of pre-recession days when campouts for new homes were common? In the mid 2000s, we bought a new home in a popular California suburb that became so in-demand, the builder started splitting phases in half to accommodate larger price increases per phase. The homes that sold at the tail end of the community were $150,000 more than those purchased in the first phase.
Are we headed there? Maybe not. There have been a sprinkling of campouts over the last couple years as the real estate market continues to improves and inventory shrinks, like here and here. In the case of that McKinney community, Prestwyck, competition among all homes in the city and surrounding suburbs is steep.
Line up, and you only have to worry about the people in front of you, unlike the increasingly hostile environment of existing home purchases in popular areas - especially when all-cash buyers are shutting out those who have the nerve to need a 30-year mortgage. So how do you make sure you get the new home you want?
1. Be informed
If you have specific neighborhoods, communities, or builders you're interested in, start researching and following them on social media, and set up Google alerts. The first line of defense is to know what's going on so you can act fast to get the home you want.
2. Register your name on the interest list
Communities and builders reach out to those on their interest lists with news about model homes, property releases, new phases, and other updates. If you want to be among the first to know, make sure the community/builder knows about you. You also want to be aware that many new-home communities have a policy regarding real estate agent representation; you typically have to tour the community with your real estate agent on your first visit in order for your agent to receive a commission when you purchase. Which brings us to our next tip…
3. Work with a REALTOR®
REALTORS® have the inside track on new releases and in many cases will be able to alert you to important news before the public has been made aware.
4. Make a friend
It doesn't hurt to makes friends with the sales agents in the community. They're great resources for neighborhood details others might not be aware of.
5. Get preapproved
If you're not preapproved for a loan when you go to buy a new home, you could lose it to someone who is.
6. Check for financing options through the builder
Using a builder's in-house mortgage option won't move you up an interest list, but it can provide other benefits. Depending on the builder, there may be incentives like closing cost help or upgrades for financing your home with their mortgage partner.
7. Talk to your REALTOR® about options and upgrades
This is important when securing your financing. The model home, if there is one, will likely be significantly upgraded and full of options that raise the price well beyond the base price. Having an idea of the options and upgrades you want, and the cost involved, is an important step in the process because it helps ensure you are approved for the correct amount. Finding out after the fact that you can't qualify for the home you want because the decked-out kitchen you're coveting has pushed the sales price out of reach would be a drag.
8. Familiarize yourself with the community and the properties
Intense community interest - the kind that incites campouts - can breed a frenzied energy and cloud judgment. And, you never know which homesites the people in front of you in line will choose. It could be that the one you were dreaming of is gone by the time you get to the front. Knowing the community well and having notes outlining which sites meet your needs will help you make an informed choice when it's your turn.