If you’re thinking about buying a brand new home in the San Antonio area, you do not want to miss this info!
Whether you’re a first time homebuyer in San Antonio, or a seasoned homeowner, you need to know that the process for buying a new construction home in the San Antonio area is completely different from buying a resale home.
There are lots of moving parts to buying a new home, and tons of scenarios and situations for you to look out for. Don’t worry though, I’m here to guide you through the entire process of buying a brand new home in the San Antonio area.
Is Now a Good Time to Buy a Brand New Home in San Antonio?
Yes! There are tons of builder incentives and sales price reductions in the current market. This means you can definitely save some money when buying a brand new home!
San Antonio New Construction Expert
My name is Tammy Dominguez and I help people find the best homes in the San Antonio area. I specialize in new construction homes in San Antonio. Whether you’re moving to San Antonio, or already living here, looking for a home that is already built, or wanting to build from dirt, I’m here to help!
I’ll walk you through the process and find the best deals on brand new homes in the San Antonio area.
Identify the Budget & Location
Some buyers think that the first step in buying a new construction home in San Antonio is choosing the builder. But, the first step is identifying the locations that will work best for you and figuring out your ideal budget.
Let’s look at the map of San Antonio, and where the concentration of new home communities are, that usually helps to narrow down options, along with figuring out the budget that you have for your new home.
If you’re already living in San Antonio, and familiar with the areas, you likely already have this decided. If you’re moving to San Antonio, I have a process to help you. We will narrow down those options based on your needs, wants & what specifically you are looking for in a community.
New Construction Homes Under $400k in San Antonio
Then we narrow it down even further, so let’s say new homes in San Antonio that are less than $400k. You have all of these communities that may have options for you. And many of these communities have multiple builder options in them. So that’s where we start looking into the specific builders that would work for you.
If you want to browse through this website that I’m looking at, I have it linked here for you. It’s new home inventory in the San Antonio area. You can add all kinds of filters and map searches to see options for yourself. It doesn’t include 100% of builders or available inventory, only if they are part of this specific builder network. But, it does let you see a majority of inventory, and then I’ll have more options for you once we connect and talk about what you’re needing.
Timeline & Selecting the Builder & Home
Step 2 of buying a new construction home in San Antonio, which is pinpointing your timeline & choosing a builder. These actually go hand in hand. If you have a situation where you need to close and move into your home at a specific time, we will need to search for the builders that actually have options that match your timeline.
Because we’ve already narrowed down by these criteria, we are likely down to a few builders that have inventory to match.
We will schedule meetings with these builders, get the current inventory, pricing, & incentives.
Then, walking through the specific homes and homesites they have available will be the main determining factors.
Pay Earnest Money
Most builders are going to require your earnest money to hold the home & lot before you sign the purchase agreement.
The amount of the earnest money is going to depend on the builder, the community, how far along the home is in the build process & what the market condition is at that time. If it is a busy and competitive time for housing, the amount required will be higher, as the builder will want the security of taking the home off of the market for you.
I’ve seen earnest money amounts vary from $500 to $5,000. It really is just going to vary on several different factors.
Earnest money does get credited to you at closing. It will be applied to your overall down payment, or applied towards your closing costs.
This earnest money serves as a Protection for the builder and for you. It allows for you to prove to the builder that you have intention to buy the home, and so they take it off the market. It also helps to hold both parties responsible to the terms of the purchase agreement.
The Purchase Agreement
Builder purchase agreements are typically sent electronically, which makes it very easy and convenient to sign. But, I can’t stress enough that you need to be aware of everything that you are signing.
Once you have signed, you are locked in to the terms in that agreement. It will always be in the best interest and protection of the builder.
It is not likely that you will ever be able to change these terms, even if you don’t like them, other than pricing or incentives. Other than that, it is not negotiable, so if you want to buy the home, you will have to sign those existing documents. But you do want to know and understand what it is that you’re agreeing to.
Questions to Ask Before Signing the Agreement
Here are a few of the specifics that you’ll want to know before signing:
What happens if I can’t close by the closing date? This is especially important if you have another home that you need to sell before closing on this new home. If for some reason something doesn’t go according to plan & that current home doesn’t close in time, it will impact the closing of your new home of course, so you’ll want to know the scenarios.
Loan approvals could cause closing delays also. The builder’s in house lender will usually work with you on this. If you’re using outside lending, you could be looking at daily fees for all of the days that closing is delayed. And the lender does not typically pay those fees.
What happens if I change my mind about the home? Maybe you found another option that worked out better, or your moving plans changed, the build process was taking too long. There are plenty of reasons that would make a buyer change their mind about a home.
Under what condition would the builder be able to terminate the contract?
This was actually something that came up frequently in 2021 & 2022. There were frequent delays in the build process because of labor and supply shortages. This caused buyers that were under contract for new construction homes to become very frustrated with the builders. If a builder felt that a buyer had become overly aggressive, or abusive, toward them, they would just terminate the contract and sell the home to another buyer. And their contract protected them. Why? Because a builder contract has terms to favor the builder.
Either way, the main point you’ll want to know is how to keep your earnest money protected if the closing on this home never happens.
Pre-approval for Your Brand New Home in San Antonio
Usually, when looking for resale homes, the lender pre-approval process happens before we start home shopping. It looks a little different for buying a new construction home.
If the builder allows you to sign the purchase agreement before you apply with the lender, they will still expect you to apply pretty much immediately after signing. This is to make sure that you are financially qualified to follow through with the agreement and purchase the home.
You’ll find that most (if not all) of the incentives that go along with buying a brand new home in the San Antonio area, are only available if you use the builder’s preferred lender for your mortgage loan. So it wouldn’t really make sense for you to go out of your way to get approval from an outside lender, unless you are planning to use that lender for the purchase.
You are always able to shop for and choose your own lender. Using an outside lender will usually forfeit incentives though.
Sometimes, it happens where the outside lender is able to match, or at least get close to those incentives. So, of course it’s still a great idea to find this information out ahead of time.
Benefits of Using Builder-Preferred Lenders
There are some key benefits to using the in-house lender though:
- They are usually familiar with the builder’s construction process, and have regular updates & meetings with them to understand the timeline of your home.
- They have current pricing information for their inventory homes, and available incentives which helps the lender to provide more accurate estimations for monthly payments, cash to close needed, etc.
- They also usually have necessary HOA information regarding transfer fees, quarterly dues.
- And being more familiar with the communities, they can better estimate the property taxes on the homes, even if the tax assessor hasn’t updated to reflect the home on the lot yet.
The Lending Process
This is a big step in buying your brand new home in San Antonio. The lender will be working on several process while the home is being completed. They will get your loan ready for underwriting, order the appraisal, and lock in your interest rate. This part of the process is very similar to resale, with the exception of the timing. If your home is too early in the build process, there won’t be much for the lender to do until it is closer to completion.
We already talked about the main differences between the builder’s in house lender and an outside lender. This part of the process can be where you may see the benefit in using the in house lender. Because they are in constant communication with the builder and the builder’s preferred title company, communication is usually smoother. You won’t ever have to hear, “well the builder didn’t tell me there was a delay with the ready date,” or “your lender didn’t let us know that they didn’t have final loan approval yet.”
So, it really helps the communication process to be consistent between the lender, the builder, and the title company when they are already all working together on a daily basis.
Home Inspection
This process is going to look different for different phases of the build process. But let’s focus on what that would be if you’re considering a home that is nearing completion.
You will likely only have one opportunity to hire an inspector for a third party inspection on an inventory home. I highly recommend that all buyers have this done, no matter who the builder is, which community, or what the price point is. This is because no home, even a brand new one is ever perfect.
A licensed inspector will be able to check the major systems in the home to make sure they are functioning as intended. They will check the roof construction, attic insulation, electrical outlets, and so many other things. You, as a buyer, may not think to check all of these items yourself. Final inspections will happen close to the time of home completion or 10-14 days before closing.
Blue-Tape Walkthrough
There will also be a blue-tape walkthrough & builder orientation around this time. This is different than the third party inspection. It’s your chance to walk the home with the builder and your realtor (with a roll of blue tape) to look over the finish out quality and any workmanship issues that you find.
It is completely normal to find cosmetic issues & discrepancies. Some builders will have already walked the home with their teams and have addressed many of the issues. Unfortunately, there are those builders that wait for the buyer to point out the things that they are not happy with.
Usually, these issues are minor and fairly quick for them to address. Like paint touch ups, tightening a switch plate or grout clean up. But again, there are some situations where we have to really address major quality & workmanship concerns. I can think of a few of those builders specifically.
Closing
Usually on the morning of closing, or possibly the day before, you’ll have a Final walkthrough. This of course is where you walk the home one last time with your realtor and the builder. You’ll be able make sure all necessary corrections have been done.
You likely already have had your closing time scheduled. The next step is for you to go to the title company with your ID and your funds to close. This is the fun part! You’ll get to sign all of the necessary paperwork to secure the mortgage and have the deed transferred.
Once signing is complete, the official funding process happens. If you used the builder’s in-house lender, this usually happens pretty quickly. Then, after funding, you’ll get your keys to your brand new home!
Warranty on Your New Home
The warranty process for most builders is notoriously a pain to get handled. They all have different qualifications for what constitutes a warranty and how they get them resolved. You will of course notice things after you move in that you didn’t notice during any of your walkthroughs. That’s completely normal.
Pro Tip: Keep a list going of items that need to be resolved (if they aren’t hazardous or emergency type situations). Then, submit them in one batch.
Also, set a reminder in your phone’s calendar for 9-10 months after closing to schedule an inspection. The reason for this: the inspector will provide you with a list of corrections that you can provide to the builder as a warranty request. The timing will be right before your 1 year warranty expires. Even if you had a third party inspection done before closing, it is very possible that there have been a few changes that you would rather have the builder correct under warranty, than to have to correct yourself years down the road.
Find a Realtor that is a new construction specialist
The most important part of buying a brand new home in San Antonio is finding a new construction specialist! This one step will set you up for success for the entire process.
And ok, yes, of course I would love for you to choose me to work with. But whether it’s me or someone else that you already know & trust, it’s important for you to have your own representation for buying your new construction home.
The sales reps in the builder’s offices are nice, they’re friendly and professional and very knowledgeable. But they were hired by and work for the builder. Not you. You deserve to have someone that is all of those things that is working on your behalf.
Just know that I’m here to help you in any way that I can! If you have questions, need advice, or are ready to start looking for your brand new home in San Antonio, you can reach out to me however you would like.
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