New Construction (Durham: flat fee, sale, mortgage)

[ecugss]

Does anyone (realtors?) know how new construction works down in the Wake County area?

What I mean is, what are the steps that take place once you figure out what neighborhood/development you want to be in and have found the floorplan you like? What are typical down payment amounts? Is it a % or a flat fee? Do you pay on it while the home is being built? How long does it take for the homes to be built (typically as I am sure it varies by builder/floorplan)? How does it work with banks, do you get a pre-approval and take that to the builder?

We are currently in NoVa and feel that it may take a few months to sell our current place and were considering getting into new construction in Wake County so hopefully while a new home is being built, we can sell our current home. We'd hate to loose out in current prices in Wake area waiting for our current place to sell. Does anyone know if this is even possible, to have 1 mortgage and be building another home??

Thanks in advance!

[fester600]

I don't know too much, but I do believe that some builders will build a house using a contingency. The last community my wife and I looked at in Durham, they said that they had only a certain allotment of houses (3 in this community) that they would build with a contingency on them...
There are Realtors that check this forum, so they will probably have better information.

[JohnE1000]

Originally Posted by ecugss

Does anyone (realtors?) know how new construction works down in the Wake County area?

What I mean is, what are the steps that take place once you figure out what neighborhood/development you want to be in and have found the floorplan you like? What are typical down payment amounts? Is it a % or a flat fee? Do you pay on it while the home is being built? How long does it take for the homes to be built (typically as I am sure it varies by builder/floorplan)? How does it work with banks, do you get a pre-approval and take that to the builder?

We are currently in NoVa and feel that it may take a few months to sell our current place and were considering getting into new construction in Wake County so hopefully while a new home is being built, we can sell our current home. We'd hate to loose out in current prices in Wake area waiting for our current place to sell. Does anyone know if this is even possible, to have 1 mortgage and be building another home??

Thanks in advance!

The process of building a new home varies from one builder to another.

First, the builder will ask you for a small down payment to reserve the lot for you. This amount can be between 1K to 5K. The reserve period can be between one week to one month. During the reserve period, the builder will ask you to get pre-approved for the loan amount. If you don't get pre-approved, the builder will return the small down payment to you, or you have to put about 5% to 10% down payment to start the construction.

If you are approved for the loan amount, the builder will aske you to put more money down to start the construction. This amount can vary between 5K to 4% of the sale price.

The construction period varies from one builder to another. Custom builders tend to take longer than tract builder to build a home. Usually, custom builder will take between 7 to 9 months, and tract builder usually take about 6 months. However, you should be prepared for the construction to take longer as nothing in construction business ever finish on time.

Regarding you loan: After you got pre-approved, there is nothing else you can do prior to a couple of months before closing. In most cases, lenders can lock you rate for up to 60 days. So, about 60 days prior to closing you will need to contact your lender, apply for the loan, and lock your rate.