How to buy a new-build home in 9 steps

Buying a new construction home may sound like a dream to many home buyers, but it can look different than buying an existing home. Whether you are build from the ground up or purchasing a turnkey new construction project, there are additional steps, timelines and decisions to consider.

In this Redfin article, we discuss everything you need to know about buying a new construction home. Whether you are looking at an upcoming development in Sacramento, CAor looking at land beyond Milwaukee, WIHere you can read what you need to take into account before you get started.

Key Takeaways

• New construction homes are built from scratch as part of a planned community or on land that you purchase.
• They are generally more expensive than existing homes due to higher construction and development costs.
• For new construction, construction can take several months to a year, depending on the size, layout and location.

1. Determine a budget

The first step when buying a new-build home is determining a budget. While you have to decide between building a house from the ground up or buying a newly built house, knowing how much house you can afford can help you with your decision.

Building a house is often more expensive due to the price of materials and labor. For example, a NAHB study from 2025the average sales price for a new single-family home in 2024 was $665,298. For comparison: the US average sales price is $429,129, according to Redfin data as of February 2026. It’s a good idea to set a budget early so you know what’s truly affordable.

2. Choose between building a house or a ready-to-live home

Knowing your budget can help you decide whether you want to build a house or buy a house ready to move in property. Here’s what you need to know about each option:

Option 1: Build a house from the ground up

Your first option is to build a house from scratch. There are two ways you can do this: buy land and build a house, or buy a lot in a planned community. Buy land and building a house is usually more complicated. You’ll have to find land suitable for building on, commit to a builder, file permits, install sewer, water and electrical lines, and much more. This entire process can take 1 to 2 years.

For many buyers it is easier to buy a lot in a lot planned community where construction has not yet started. In this case, a builder is already in place, permits have been filed, and utilities have been installed, while you still have the option to choose a layout and finish. Homes in planned communities typically take several months to complete, but ask the builder about the expected timeline.

Option 2: Buy a ready-to-move-in home

Your second option is to purchase a move-in ready or spec home. These homes are usually under construction or have recently been completed. If the house is currently under construction, you can probably negotiate finishes such as paint color, carpeting, and appliance packages.

You still have some freedom to customize your home, but major structural changes are usually not an option. Your agent will have a good idea of ​​what to do negotiating in a ready-to-move-in home.

3. Consider which loan is suitable for you

Once you’ve decided between buying a move-in ready home or building a home, you’ll need to evaluate the available loan options.

Here are most of them common loan types What you should pay attention to when buying a new home:

• Construction loan only: If you decide to buy land to build a house on, a construction loan is an option. These are short-term, high-interest loans used to finance the construction process. These loans typically last only one year and cover the costs of land, building materials, permits and labor. After this ends, you will likely need to get a traditional mortgage.
• From construction to permanent loan: These loans cover the construction process, but convert to a traditional mortgage once the home is completed. You’ll need a down payment, but you’ll only pay closing costs once, which can be beneficial.
• Conventional mortgage: A conventional mortgage is one of the most common mortgages. If you are purchasing a new home or one that is in a planned community, this may be a good option.

Keep in mind that there are plenty of loan options available, including FHA, VA, and USDA loans. Talking to a lender can help you decide which type of loan fits your goals.

4. Find a real estate agent

Working with a real estate agent is a good plan regardless of the type of home you buy. If you are looking to purchase land, finding a real estate agent with land experience, such as rural, off-grid or recreational, is crucial as they can identify opportunities and potential risks. A real estate agent can also help you buy a home in a planned community, by doing things like submitting an offer, negotiating upgrades and ensuring the closing process goes smoothly.

5. Choose an area you want to live in

Determining where to build or buy a home affects everything from your daily commute and property taxes to access to amenities and utilities. Typically, new-build homes are built further away from the city center or in suburban areas. If you’re planning to buy land, chances are it’s in a more remote location.

Many new-build homes are sold as part of a subdivision project, with plots for sale. Depending on the area, these lots may be smaller than you expect, with close boundaries to your neighbors.

If you’re looking to buy land, you’ll need to consider everything from electricity, internet reliability, utilities, and access to amenities. Consider how long it takes to run daily errands, commute time, access to major highways and roads, proximity to friends and family, and more. Depending on your goals, the tradeoff may be worth it.

6. Compare home builders

Choosing the right homebuilder is just as important as finding the right real estate agent. The National Association of Home Builders (NAHB) directory is a good place to start your search. Start by reading online reviews, confirm that the builder is licensed, and check out their floor plans.

For homes in a planned community, there are usually a few floor plans or models to choose from. You will want to look at these to see if they suit your needs and wants in a new home. Depending on the builder, they may be open to customizing the layout to suit your needs.

There are plenty of important questions to ask potential builders, but some of them include:

• What are the standard finishes versus the upgraded features?
• What warranty policy do you offer?
• What is the expected timeline for the construction of the house?
• How long have you been an entrepreneur and are you licensed and insured?
• Do you have that? spec homes I can tour?

7. Negotiate changes and sign a contract with a builder

Once you choose a builder, you’ll receive a contract for review that details the expected completion date, your down payment, construction materials, finishes and more. If your home is part of a planned communitySome interior features, such as standard appliances, carpet, basic paint colors and upholstery, may already be included in the price.

Typically, you have the option to select additional accessories such as hardwood floors, upgraded appliances or crown molding for a higher price. Keep in mind that you can try to work these more expensive features into the existing purchase price.

Your real estate agent can help you read the contract, negotiate it, and make sure everything you agreed to is included. They also help you evaluate the builder’s warranties, what happens if building material prices rise, or how to negotiate changes during the construction process.

8. Perform a home inspection and final walk-through

After the house is built, you will still want a professional home inspection. Most new-build homes are included phase inspectionswhere a home inspector checks the home at certain stages of the construction process. Even if a home has undergone phase inspections, a final inspection can help identify any problems that were overlooked or developed later.

If there are any wiring, plumbing, or cosmetic issues, you can negotiate these repairs with your contractor before officially closing on the house. Home inspections typically cost a few hundred dollars, but this can save you from a major repair in the future.

You’ll also want to have a final walk-through to make sure everything you agreed to is completed and cleaned up in the house. Typically, you and the builder will create a “punch list,” which is a list of all the final repairs that need to be completed before closing day. This includes repairs after the home inspection and minor problems such as scratches on the floor or paint drips.

9. Lock up the house

Once you have completed the home inspection and applied for your mortgage, you will be in the closing process. Your agent and lender will guide you through the process, such as reviewing the closing statement, bringing the appropriate paperwork, and more. On closing day you will receive the keys and you can move in.

Frequently asked questions about buying a new-build home

How long does it take to build a new-build home?

On average, it takes about 4 to 8 months to build a home in a subdivision. Building a house on land can take 1 to 2 years. Please note that this varies depending on your location, access to building materials and the complexity of the project.

Can I negotiate a new build?

Yes, but not in the way you might expect. Most builders don’t negotiate the base price of a home, but you may be able to negotiate upgrades, a longer warranty, or other concessions.

What is new construction versus a spec home?

A new construction is a home you purchased before it was built, giving you the opportunity to choose a layout, paint colors, finishes and landscaping. A spec home is a new home that is not built for a specific buyer and therefore usually only has the basic features.

Do I still need a down payment for new construction?

Yes, unless you have one zero payment loan such as a VA or USDA loan. You’ll also likely need a down payment from the builder, a non-refundable payment of about 10% of the cost of the house. It acts as an earnest money deposit and covers the initial construction costs.