All About Buying New Construction in Southwest Florida

JG3 Homes Brokered by eXp Realty specializes in helping home buyers negotiate deals with new construction builders in Babcock Ranch, Punta Gorda, Port Charlotte, Fort Myers Shores, Fort Myers, Cape Coral, Naples, Estero, Bonita Springs, Venice, Lakewood Ranch, Alva, Sarasota, and Bradenton.

Here in Southwest Florida, there are two types of new construction builders – tract builders and custom builders. Tract builders will buy large plots of land, add sometimes hundred of homes to a neighborhood, and usually include 2-5 model home sites. Some of the better known tract builders in Southwest Florida are Lennar, WCI, Pulte, Divosta, Del Webb, Meritage, Maronda, Neal, and D.R. Horton.

The custom builders normally build one home at a time and typically have longer build periods – up to 15 months. Some of the higher end custom home builders in S.W. Florida are A.R. Ruthenberg, Divco, Florida Lifestyle Homes, and Stock Development.

Below are a few videos on the subject of buying new construction. These videos were made to educate home buyers on the costs, process, and why the should absolutely work with a realtor when buying new construction. Regardless if you are buying a $200,000 home or a $2,000,000 home – the thought process is the same when evaluating if a builder and neighborhood will work best for your family and goals.

Buying New Construction – Understanding The Total Costs

Buying New Construction Homes - Total Cost Of Ownership

In this video I will provide details on all costs associated in buying a home directly from a tract or custom builder.

Below are tips and strategies I use with Buyers to help them make the most informed decisions throughout the entire process. By understanding the upfront costs as well as ongoing costs, we can determine if a new construction home is the right choice for you and your family!

Four Components that make up the Sale Price of the Property

  1. Base model price which is the set fee respective to the house MODEL.
  2. Elevation Fee – which relates to the front exterior of the house. Typically a house model will have multiple elevation choices, each with different costs. For example, elevation ‘A’ could include a front porch, where elevation ‘B’ could include a raised entry to the front door and a porch, And elevation ‘C’ could have neither.
  3. Lot Fee – Builders assign different premiums to lots, based on factors such as waterfront view, total square footage of the lot and corner lots.
  4. Upgrades – Options and upgrades vary pending the builder. For example, Lennar Homes come with very few upgrades UNLIKE Pulte. They have endless options. What I recommend for my clients is that they total the base model price, the elevation fee, the lot fee and all the upgrades they want to determine their actual property cost. Once we have that figure we can subtract items if necessary to stay on budget.
Example of Different Elevations Offered by a Builder (Lennar Homes)

What Makes Up Closing Costs?

These will differ based on the county, city, community, title company being used, and whether the buyer is paying cash or taking out a mortgage. Typical closing costs for new construction include:

  1. Taxes – Property taxes are paid in arrears so if you close on October 31, you will owe taxes for the last two months of the year (November, December).
  2. CDD or community development district taxes are paid yearly to the county and when you close you must pay these fees forward if applicable to your community.
  3. Government Recording and Transfer taxes
  4. Miscellaneous Fees which can include: One time HOA Fee Prepayment of HOA dues Irrigation Hook up One time builder fee Master Developer Fee Survey Fee
  5. Mortgage fees. Your loan officer will break down all fees associated with your contract BEFORE signing.
  6. Title and Settlement. These fees go directly to the Title company and typically comes at a flat rate, BUT the title company should outline all fees before closing.

What Is Not Included with a New Construction Purchase?

These are generalized rules, but can vary from builder to builder.

  • Light Fixtures / Ceiling Fans
  • Blinds or Drapes
  • Customized Closets
  • Storage Cabinets or Shelving in Garages
  • Protective Floor Coatings / Grout Sealant
  • Electronics / Furnitures

There are occasions where you can buy a mode home with all the furniture the builder set.

Moving Costs

Be sure to also factor in moving costs which will inevitably vary per person.

Ongoing Costs

How much will it cost to maintain your property?

  • Property Taxes / CDD (if applicable)
  • Municipal Waste Taxes
  • HOA Fees (if applicable)
  • Landscaping/Lawncare (if applicable)
  • Air Conditioning Service/Maintenance – normally done biannually. Most AC units in Southwest Florida are warrantied for 10 years

Why You Need a Realtor When Buying New Construction

Why You Need a Realtor When Buying New Construction

Some of the top myths that are misleading consumers when it comes to buying new construction homes.

Myth #1- “ When buying new construction, you don’t need a realtor because the builder reps already have agents.”

While this may be true, it is important to realize that there are two sides to any real estate transaction – the sell side – and the buy side.  Most builders have onsite real estate agents representing the selling side of the transaction. But what does this mean for you, the buyer?  Ah ha, you guessed it. Zero representation puts the buyer at a disadvantage.  The builder agents are staffed and hired to work specifically for the builder which is why it is crucial that ‘the buyer’ have a Realtor to represent the buy side of the transaction. It is impossible for the builder’s agent to be 100% objective when they are incentivized to sell the homes at the highest price possible.  When you align with a local agent that is conducting new construction transactions regularly, you’ll have someone representing your best interests.

Myth #2- “Negotiating deals is what I do for a living in my job sector, I can handle the home purchase.”

A realtor that specializes in new construction knows the best time to make a deal with a builder. A lot of the national builders are publicly traded and need to meet certain “sales goals” and for that reason tend to be more aggressive with incentives at different times throughout the fiscal year.  A realtor that knows their local market can help you negotiate better terms, conditions as well as the do and don’t of upgrades (per builder) that save money for the buyer. In addition, buyers need an objective party to help them understand the contract. One mistake I have seen multiple times is being promised items, but not getting those promises in writing from the builder. If a condition is not put in writing, no one has a leg to stand on with the verbal promise. A good realtor will fully understand new construction contracts and make sure they contain all items being promised during the negotiations phase.

Myth #3- “I can get a discount on the home price by not having a Realtor®.”

Another myth I’d like to bust is that some buyers think that they can get a reduced price if they do not have a Realtor® representing them. This idea is completely false! 

Each builder has already set aside money for the buyer’s agent fee, it’s built into their price model. Additionally, selling the house to an individual at a discount would negatively affect the future home prices in the development which would not be in the builders best interest.

Myth #4- “Builder Mortgages are the best the market has to offer.”

If you plan to take a mortgage it is crucial to have a realtor analyze the package being offered by the builder’s lender with a third party. Now, it’s true the builder’s deals can be very difficult to beat. Nine times out of ten it usually makes sense. But for that one time it doesn’t make sense, having a realtor with strong lending partners could make a significant difference. Just recently I was able to use my network and develop a package for clients that is saving them $90,000 over the course of their 30 year term. Lean in on the Realtors® expertise to make sure you actually receive the best mortgage.

Myth #5 – “The price of the house is all inclusive and there are no additional fees to consider.”

Realtors are efficient at guiding buyers through the total costs of ownership, keeping  on budget and finding innovative ways to save money on upgrades pending individual needs and then negotiate the best purchase price and incentives to get the buyer the best deal.

For example, basic new construction prices include:

  1. Base Model Price
  2. Lot Fee
  3. Upgrades
  4. Taxes and CDD Fees
  5. Closing Costs
  6. One Time Builder fees

If you are buying or even considering new construction, please protect yourself and your financial investment by using a local realtor. We are equipped with knowledge and techniques designed to save time, money, while objectively  aligning with your goals.

New Construction Home Buying Process in Babcock Ranch

While I specifically made this video for families interested in buying new construction in Babcock Ranch, the process is the same regardless of the community you are interested in.

Babcock Ranch New Construction Home Buying Process
Here is the process JG3 Homes uses when working families interested in buying new construction:

Step One: Meet and Greet Prep Work

The first place to start is by meeting either in person or virtually. I’d like to get to know you and determine if working together makes sense. Ultimately, my goal is to help you make the most informed decision. To do that, I need to learn more about your goals, lifestyle choices, budget,and most importantly – timeline. During our meeting, we will also review the different builders here, discuss what makes each one unique, their differing price points, and total cost of ownership. If you have yet to be pre-approved for a mortgage we’ll call my lender together as it’s good to know how much of a home you can afford before we talk to the builders. By the end of this meeting, the goal is to have a schedule to visit the builders.

Now the Fun part begins – Touring

Step Two: Scheduling Appointments

I will schedule appointments ahead of time with each of the builders before touring and pre-arrange a builder representative to accompany us as we view model homes together.

I get paid by the builder, to represent YOUR best interest. In order to do that, I must be there from the start of your home tours with each individual builder.

Step Three: Decisions on: The Builder, Inventory home vs spec Build, Selection of home model, and lot location.

At this point in time, we will sit down with the respective builder representative and price out your home. I want to make sure you are fully aware of the ownership costs, especially the taxes, CDD, and down payment schedule. Builders here require a downpayment to secure the lot and typically requires 10% or more upfront. After we all understand everything involved, we move forward with a signed contract to initiate the process. 

After signing your contract, certain builders will have you visit a design center where you select all the options and upgrades that come with your house. The design meeting normally happens within a few weeks of signing a contract.

This is an exciting meeting, but be prepared as this can definitely take a few hours to sort out all the options and upgrades.

Step Four:

If you purchased an inventoried home, the builder will notify of expected closing date after initiating the contract.

But if you specified a home, this is where we practice our patience and wait … Typical builds are anywhere from 4 to 15 months, depending on the builder.

And while this time may drag out, closing will come sooner than you know it. About a week before closing you’ll have a pre-closing walkthrough. This is a super critical event to find any issues with the construction of the home. It’s advisable to bring a handyman/ home inspector ‘friend’ if you know one. Introduce your friend and be aware some builder’s do not approve of home inspectors during walkthroughs. Make sure to document everything. WRITE IT DOWN/ TAKE PICTURES. While the builder’s construction manager will take notes, make sure to take your own notes so you can follow up. Most of the identified work should be done within a week, so I recommend doing one final walk through before close as well. When you do close, make sure you receive your special warranty deed and survey – and find a secure place to keep these documents.

While going through this process may seem arduous and even monotonous at times your timelined home build will result with …

STEP Five: Your next chapter of life, here in Babcock Ranch or other community.. Congratulations, you are a new homeowner!

If you would like to get acquainted and discuss new construction, please give me a call or setup a 15 minute introductory call at this link: https://calendly.com/jg3homes/15min