Buying a New Construction Home: Process, Incentives & Pros and Cons

New construction homes are becoming an increasingly popular option for buyers in Los Angeles and surrounding areas. From modern layouts and energy efficiency to builder incentives and fewer immediate repairs, it’s easy to see the appeal. That said, buying a newly built home is very different from purchasing a resale property — and understanding the process, incentives, and potential drawbacks is essential before moving forward.

This guide breaks down how the new construction purchase process works, what builder incentives really mean, and the advantages and disadvantages buyers should consider before committing.

What Is Considered a New Construction Home?

A new construction home typically refers to a property that has never been lived in before. This can include homes in large master-planned communities, small boutique developments, townhomes, or even single-family homes built on individual lots by a local builder.

Some homes are fully completed and move-in ready, while others are sold before or during construction, allowing buyers to choose finishes, upgrades, and sometimes even floor plans.

The New Construction Home Purchase Process

Buying new construction follows a different timeline than buying a resale home. Instead of negotiating directly with a homeowner, you are purchasing from a builder or developer, and the process is more structured.

It typically begins by selecting a community and floor plan. Buyers visit a model home or sales office, review pricing, and choose a lot. At this stage, the builder will present a base price, available upgrades, and estimated completion timeline.

Once you decide to move forward, you’ll sign a purchase agreement prepared by the builder, not the standard residential contract used for resale homes. An initial deposit is required, and this amount can vary depending on the builder and stage of construction.

After signing, buyers usually move into the design and upgrade phase, where selections such as flooring, countertops, cabinetry, and fixtures are chosen. These upgrades can significantly impact the final purchase price, so budgeting carefully is key.

Construction then begins (or continues), which can take anywhere from a few months to over a year depending on the project. During this time, buyers will work with their lender, complete inspections, and prepare for closing once the home is complete and the builder issues a certificate of occupancy.

What Are Builder Incentives?

Builder incentives are financial or upgrade perks offered by builders to attract buyers and keep sales moving, especially in competitive or shifting markets. These incentives are often more flexible than price reductions and can provide significant savings.

Common builder incentives include:

• Credits toward closing costs

• Mortgage rate buy-downs

• Free or discounted upgrades

• Design center credits

• HOA credits or temporary fee reductions

Many builders require buyers to use their preferred lender to receive these incentives. While this isn’t always a bad thing, it’s important to compare loan terms carefully to ensure the incentive truly benefits you long-term.

Builder incentives can make new construction surprisingly competitive with resale homes, particularly when interest rates are elevated.

Advantages of Buying New Construction

One of the biggest advantages of new construction is peace of mind. Everything in the home is brand new — from the roof and plumbing to appliances and HVAC systems — which means fewer immediate repairs and lower maintenance costs early on.

New homes are also built to modern standards, offering energy efficiency, open floor plans, and smart-home features that many older homes lack. Buyers also appreciate the ability to personalize finishes and layouts, creating a space that truly feels like their own.

Another major benefit is the builder warranty, which typically covers workmanship and major systems for a set period of time. This added protection can be especially appealing to first-time buyers.

Finally, builder incentives can significantly reduce upfront costs, making new construction more affordable than many buyers initially expect.

Disadvantages of Buying New Construction

While new construction offers many benefits, it’s not without drawbacks. One common challenge is price transparency. The advertised base price often doesn’t include upgrades, landscaping, or lot premiums, which can quickly add up.

Buyers should also be aware that builders write the contract, and these agreements often favor the builder more than the buyer. Timelines can shift, construction delays can occur, and flexibility is typically limited.

Location can be another consideration. Many new construction communities are built farther from city centers, meaning longer commutes or fewer established amenities compared to older neighborhoods.

Lastly, there is often less room for negotiation than with resale homes. While incentives may be available, builders are generally less flexible on price.

Should You Use a Realtor When Buying New Construction?

Yes — and this is a common misconception. The builder’s sales representative works for the builder, not the buyer. Having your own Realtor ensures you have someone reviewing contracts, negotiating incentives, tracking construction timelines, and protecting your interests throughout the process.

The best part? In most cases, the builder pays the Realtor’s commission, not the buyer — but your agent must be involved from the very beginning.

Final Thoughts

New construction homes can be an excellent option for buyers who value modern design, energy efficiency, and long-term predictability. However, the process is different from buying a resale home, and understanding builder incentives, contracts, and upgrade costs is critical to making a smart decision.

With the right guidance and a clear strategy, buying new construction can be a smooth and rewarding experience.

If you’re considering a new construction home and want help comparing communities, incentives, and total costs, I’m always happy to help you navigate the process with clarity and confidence.

Connect with us today to find out more about New Construction Inventory within the Los Angeles Area.

Email: info@jimmyvibert.com

Phone: 818-334-6987