Housing Starts
Mel Evans/AP
Planning to move soon? If you're looking to purchase a brand-new home -- one that's just been constructed -- the price will be determined mostly based on its location, building materials, and size. But that doesn't mean you have to pay sticker price.

Here are some tactics would-be buyers can follow to save thousands of dollars on a brand-new home.

1. Be the First Buyer -- or the Last Buyer

Developing a new neighborhood often takes many years. The first buyers will have to deal with all the headaches that come with living in a subdivision under construction: constant truck traffic, nonexistent lawns, and few neighbors. As more houses are sold, the development attracts more attention, and it becomes easier for the developer to sell more homes.

For this reason, builders are willing to offer better deals to early buyers. If you can accept the headaches that nearby construction can bring, buying the first house in a new subdivision is a great way to save money.

Somewhat paradoxically, buyers can also get great deals on the last house. By that point, builders are eager to wrap up the project and move on, and will be more willing to cut a deal if you're buying the last home in a newly built subdivision.

2. Buy a Model

Sometimes, though not always, the last house for sale in a development is a model home. If you've been shopping for a new house, you've probably walked through dozens of model homes -- those houses builders construct on the edge of new subdivisions to show buyers what they'll be getting.

Technically, these are new houses in the sense that no one has ever lived in them. But hundreds of people have walked through them, and they probably served as offices for the builder's salesman.
It's also likely that they've been decorated -- buyers of models, for example, generally don't get to pick the colors of their carpet or their kitchen cabinets (two luxuries afforded to new-construction buyers who get in before a home is completed).

But if you're OK buying a home that might be best characterized as "gently used," models are typically cheaper than similar new homes, and they usually come with upgrades.

3. Buy in November or December

The holiday season is notoriously slow for home sales. Most would-be buyers are occupied with other activities, and in colder climates, the weather makes shopping for a new home generally less pleasant than at other times of year.

If you are willing to buy in November or December, you'll be the exception -- giving you the advantage. Builders may be more likely to offer incentives, or cut a better deal. If you can put off your purchase, next November might be your best time to buy.

4. Know What You Want Before You Get Started

One of the greatest advantages of buying a new home is getting to make decisions about details: carpet or wood flooring, fireplace or not, window treatments, light fixtures -- new buyers generally get to pick all these things and more.

But building a new home can take months, and with such a long wait, buyers will often change their minds about what they want. Unfortunately, having to make changes is costly -- redoing a floor or swapping out window treatments can tack thousands of dollars onto the final price of the home.

If you're dead set on a making a radical change to your new home, it's better to do it during construction than afterward, but know that making changes after the process has gotten under way will cost you.

Enjoy Your New Home

A home is one of the biggest purchases you'll ever make. In the end, the most important thing is getting a house that suits your needs -- one that fits your family, but also your budget. These tips might not be practical for everyone, but those who can put them to use will get themselves a better deal.

Sam Mattera is a contributing writer to The Motley Fool.

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4 Comments

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cslinz62

Family, friends & neighors built mine & I paid for it as it was being built. I live in the country so I didn't have to get permits & inspections done. That's the way to go.

January 20 2014 at 1:13 PM Report abuse +1 rate up rate down Reply
jdykbpl45

Pay cash!

January 19 2014 at 2:58 PM Report abuse rate up rate down Reply
a1usaindacrapper

DONT BUY ANYTHING UNTILL OBAMIT IS REMOVED FROM OUR WHITE HOUSE IN HANDCUFFS ,CAUSE YOU WILL JUST LOSE IT TO OBAMITS "RECORD" FORECLOSURES LIKE MILLIONS LOST THEIR HOMES ALREADY.~~OBAMIT STOLE ALL YOUR HOMES N YOUR NOT GETTING THEM BACK. !! ~~>VOTE STRAIGHT "AMERICAN TEA PARTY IN 2014 N GIVE "AMERICA" BACK TO "AMERICANS"

January 19 2014 at 7:10 AM Report abuse -4 rate up rate down Reply
1 reply to a1usaindacrapper's comment
herb

after reading your lies about our president, I will stay away from the tea party. by the way , the forclosures and bank failings started in the bush adv ministration. because of the deregulations done in congress headed by Mcain, another republican.
thank god we had Obama as president to save the USA during that horrible time.

January 19 2014 at 4:36 PM Report abuse +3 rate up rate down Reply
1 reply to herb's comment
joey

Do me a favor when " Your President " leaves Go with him !!!

January 20 2014 at 7:34 PM Report abuse rate up rate down
lorepod

As the construction superintendent for a new subdivision that was started in 1997 and finished in 2006, I would have to say the four recommendations were exactly how it worked. We ran out of ground in 2006 just as the big housing slump was beginning, so the timing was right. The builder did not get the last three houses sold and they are rentals.

I think you can get more for your money if you buy an existing lived in home but it is akin to buying a used car. You will replace major components sooner depending on the age of the house. And if you decide to build, the very wise man lets the little lady mostly have her way. There has been more than one divorce over building a home. Don't buy more house than you can comfortably afford. I saw more than one couple take on to much with easy money available only to loose it when the crunch hit. And don't touch your equity. Though it is nice to figure in your net worth, just act as if it does not exist.

After the housing marked died, I went out on my own into remodeling and repairs. If you have the skills, how hard do you want to work? And housing is like the stock market. It will fluctuate but over the long term, and I repeat long term, it is ok. If you like the area and plan to be there more than 5 to 7 years, I would buy. But yes, I know plans can change. Also if you decide to build, there are two rules that will never fail you. Whatever you think it will cost, you are wrong. It will cost more. And however long you think it will take, you are wrong. It will take longer.

January 18 2014 at 5:15 PM Report abuse +2 rate up rate down Reply
1 reply to lorepod's comment
rckedna6

You are so right on!

January 19 2014 at 5:43 PM Report abuse rate up rate down Reply
betty_brock

I would take this advice but my home has been paid for since I was 35.

January 18 2014 at 3:30 PM Report abuse -2 rate up rate down Reply
1 reply to betty_brock's comment
betty_brock

No, it isn't a trailer. It's a real brick and mortar house.

January 18 2014 at 3:32 PM Report abuse -3 rate up rate down Reply
norman

Gently used, like my girlfriend in college!

January 18 2014 at 12:26 AM Report abuse +1 rate up rate down Reply
alfredschrader

There is also an article on here on how your internet costs are going to increase. If anything it should come down as the device technology improves. I was there when the Internet was invented using a telephone handset cradle. I was there. I was also there when the first cell phone was invented - my friend placed the antenna on a water tower and hardwired a telephone touchtone keypad to a walkie talkie. I was there. I saw and heard the very first one.
If the net access costs increase, I'll invent a new Internet to circumvent this.

January 17 2014 at 5:30 PM Report abuse -1 rate up rate down Reply
Robert Connor

Some good tips to consider when buying any home!

January 17 2014 at 3:56 PM Report abuse rate up rate down Reply
RMS

You better save big on that new home, because new homes come with added expenses like landscaping, fencing, window treatments, etc., things you sometimes get included when you purchase an existing home. The worst age for buying a home is one that is ten to fifteen years old, as things like appliances, hot water heater, furnaces, and roofs are starting to come to the end of their useful life.

January 17 2014 at 2:57 PM Report abuse rate up rate down Reply
karensgrant

While you make some good points, there are so many factors that make up the builder's pricing and offer acceptance decisions it isn't good to generalize. As a real estate broker and new construction specialist for over 30 years I would like to add a couple of things that the buyer really should know. Most builders do NOT discount when they open a new subdivision. They do not want to set precedent of low offers being accepted. They may have a grand opening bonus of additonal options or closing costs but it quickly goes away. Regarding model homes, the models usually go for more than offered price. We keep lists of people that want the model home when it becomes available. Bidding wars are common for these homes. Obvioulsy location, local market conditions and builder quality are the main factors that drive the markets. Consumers assume that builders make a large profit on homes. Just not true! If they make 5 to 10% it is a good day. You can only discount so much before you will be out of business.

January 17 2014 at 2:39 PM Report abuse rate up rate down Reply