Building Your Dream Home in Delaware
From choosing the right builder to understanding timelines, financing options, and customization choices—your complete guide to the new construction process.
- New vs. resale comparison
- Questions to ask yourself
- Cost considerations
- Research builders
- Questions to ask
- Contracts & warranties
- Construction loans
- Loan types
- Pre-approval
- Average build times
- Delay factors
- What to expect
- Lot selection
- Options & upgrades
- Construction phases
Is New Construction Right for You?
Questions to ask yourself before getting started
New Construction vs. Resale Property
For most people, building a home is a once-in-a-lifetime opportunity that can be really exciting. It can also be intimidating, especially if you're not adequately prepared or have the right team behind you.
| Consideration | New Construction | Resale Property |
|---|---|---|
| Everything is new, no repairs needed | ✓ | |
| Ability to fully customize | ✓ | |
| Latest energy-efficient features | ✓ | |
| Builder warranty included | ✓ | |
| Established landscaping & trees | ✓ | |
| Move-in ready immediately | ✓ | |
| Established neighborhood | ✓ | |
| Often lower initial cost | ✓ |
Questions to Ask Yourself
Timeframe Flexibility
Are you able to wait 5-12 months for your new home to be completed? Do you have flexible living arrangements during construction?
Decision Fatigue
Building a home requires hundreds of decisions. Are you comfortable with frequent choices about materials, finishes, and layouts?
Budget Buffer
Do you have 10-15% additional budget for upgrades and unexpected costs that commonly arise during construction?
Construction Environment
Building where other new homes are being built means construction noise and traffic. A new home also means putting in new grass and landscaping after moving in.
If you plan to build a fully custom home, factor in additional time to meet with the architect or builder to draw up plans, secure necessary financing and permits, make all design decisions, and build in a cushion for inevitable unforeseen delays.
Cost Comparisons
When comparing prices, you might notice that a newly constructed home tends to be pricier than a similarly sized older one. However, a new construction home often requires significantly fewer repairs during your time living there. Not only is everything brand new, but you've also tailored the home to reflect your personal style.
Bathroom Remodel
Average cost in Delaware to remodel a bathroom
Kitchen Remodel
Average cost in Delaware to remodel a kitchen
Build an Addition
Average cost in Delaware to add onto a home
*Source: HomeAdvisor.com
Picking Your Builder
Research, compare, and choose wisely
Deciding on Your Builder
When visiting a development, it's important to ascertain whether a single builder is managing all the homes or if multiple builders are involved. If the lot isn't tied to a specific builder, researching local builders can help you find those with a solid reputation and a history of high-quality construction.
Assessing several builders before making your choice can shed light on their reliability, craftsmanship, and business practices. Considerations such as material quality, attention to detail, and compliance with agreed specifications can differ.
Before Signing a Contract
Check for any registered complaints, ask for references from past clients, and tour model homes or recently completed projects. Clear communication and organized project management are vital in the home-building journey.
Questions to Ask Your Builder
- Do you have to use their preferred lender?Many builders work with a preferred lender that offers closing cost discounts. Know if the lender is a referral or owned by the same company. If not required to use their lender, shop around for the best financing.
- Can you see a copy of the builder's sales contract?Builders use their own contracts with additional terms specific to the building process, such as payment schedules and available options. Your agent can help interpret the terms before you sign.
- What is the timeline for completion?Production homes can be completed in 3-4 months; custom homes usually take a minimum of 6 months. The builder should provide a timeline outlining each phase of construction.
- Can you choose features outside their packages?In production homes, options may be limited to predefined packages. Custom homes typically offer flexibility to select your preferred features, fixtures, and appliances.
- What is included in the landscaping package?Many people assume their finished home will look like the model, only to find the builder's landscaping package is bare minimum or non-existent. Plan to upgrade or add your own landscaping.
- Can the builder charge extra for cost increases?Look for an escalation clause that would allow the builder to pass cost increases onto you if materials or labor costs increase during construction.
- What warranties are provided?Normally a builder offers a warranty lasting 6 months to 2 years, possibly longer for some items. Know what's covered—major structural items and mechanical systems are usually included; appliances come with manufacturer's warranty.
- Can you do a final walkthrough before closing?Go through the home before closing to ensure every detail is taken care of. If the builder agrees to finish items after closing, make sure both parties have signed off on the list.
New Construction Financing
Understanding construction loans and mortgage options
How Do Construction Loans Work?
Construction loans usually have variable rates that move up and down with the prime rate. Construction loan rates are typically higher than traditional mortgage loan rates. With a traditional mortgage, your home acts as collateral—if you default, the lender can seize your home. With a construction loan, the lender doesn't have that option, so they tend to view these loans as bigger risks.
Because construction loans are on such a short timetable and they're dependent on the completion of the project, you need to provide the lender with a construction timeline, detailed plans, and a realistic budget.
How Payments Work
Unlike personal loans that make a lump-sum payment, the lender pays out the money in stages as work on the new home progresses. These "draws" happen when major milestones are completed—for example, when the foundation is laid or framing begins. Borrowers are typically only obligated to repay interest on any funds drawn until construction is completed.
Types of Construction Loans
Construction-Only Loan
A short-term loan usually issued for one year, meant to cover only the actual construction period. These are considered higher-risk, so they're harder to qualify for with higher interest rates. You'll need a second loan (mortgage) once construction is complete.
Construction-to-Permanent Loan
One-time loans that provide funding for construction and then transition into a permanent mortgage. During construction, borrowers make interest-only payments. These can be more costly than traditional mortgages, so compare rates carefully.
End Loan
A conventional mortgage finalized after the home's construction is finished. This is the most common form of financing for new construction, available through most mortgage lenders. The application process is identical to any other home purchase.
Questions for Your Lender
- What interest rate can you offer?
- Does the rate come with points?
- Is it fixed or adjustable?
- When can you lock my rate?
- What fees can I expect from you?
- What type of loan is right for me?
- Do I qualify for any down payment assistance programs?
Builders and developers often collaborate with specific mortgage companies, providing discounts or incentives for choosing their "preferred" lender. Regardless of whether you opt for the builder's lender or another, securing pre-approval for financing is essential. If you're not financing, be sure to obtain proof of funds from your financial institution.
New Construction Timeline
What to expect and factors that influence the schedule
Average Time to Build
Depending on your home type and builder, the time it takes to construct your home can range from 3 months to over a year. Production homes (where builders use pre-designed plans and build multiple similar homes) typically take 5-6 months. Custom homes usually require 8-12 months or longer.
Factors That Can Cause Delays
Weather Conditions
Rain, snow, and extreme temperatures can halt outdoor construction work. Foundation and framing are particularly weather-dependent phases.
Permit Delays
Local building departments may have backlogs. Each phase requires inspection approval before moving forward.
Material Shortages
Supply chain issues can delay delivery of lumber, appliances, windows, and other essential materials.
Subcontractor Availability
Electricians, plumbers, and other specialists may have scheduling conflicts, especially during busy building seasons.
Don't schedule movers, list your current home, or make other time-sensitive decisions based on the builder's estimated completion date. Build in at least 2-4 weeks of buffer time for unexpected delays.
The Build Process
From lot selection to move-in day
Selecting Your Lot
Your lot choice is just as important as your home design. Consider factors like lot size, orientation (which direction the home will face), slope and drainage, proximity to community amenities, and future development plans for adjacent lots.
Premium lots (corner lots, cul-de-sacs, lots backing to open space) typically cost more but may offer better resale value. Ask about lot premiums and factor them into your budget.
Understanding the Contract
Before signing, make sure you understand these key contract elements:
- PricingUnderstand what's included and what may incur additional fees. Understanding the fine print helps avoid hidden costs.
- TimeframesSetting a schedule of important dates helps avoid delays. Keep deadlines marked on your calendar.
- Payment StructureKnow the earnest money deposit required, when deposits become non-refundable, and any additional deposits needed.
- Materials & ConstructionUnderstand what will be used to construct your home before materials are ordered. Changes are much harder once materials have been shipped.
The Build Process
Here's what happens during each phase of construction:
Pre-Construction Meeting
After the contract is signed but before construction begins, all major and minor design elements will be reviewed to ensure every detail aligns with your vision.
Foundation
The homesite is prepared, footer/foundation constructed, rough plumbing installed, and the slab is poured. Numerous inspections ensure code compliance.
Framing
Professional framers construct the home structure. Roof framing completed, interior walls framed and secured. All essential systems within the walls are installed.
Rough-In Mechanicals
All mechanicals—plumbing, heating, cooling, and electrical—will be roughed in. This includes supply and drain lines, wiring, and ductwork.
Insulation & Drywall
Before drywall is hung, you'll conduct a pre-drywall walkthrough to ensure all electrical items are present. Then insulation is installed and drywall is hung.
Finish Carpentry & Painting
Now the exciting part! All your selections come to life—trim, interior doors, cabinets, countertops, and vanities are installed. Walls and trim are painted in your chosen colors.
Final Finishes
Your vision is almost reality! Hard surface flooring and carpet installed, lighting and plumbing fixtures added. Final landscaping and quality control inspections completed.
Homeowner Walkthrough
As your home approaches completion, your Construction Manager guides you through and explains how to operate and maintain various components. Time to start packing—moving day is just around the corner!
Tips for a Smooth Process
Do's and Don'ts
DO stay in regular communication with your builder. Come prepared to meetings with questions.
DON'T delay meetings, walkthroughs, or options selection—it could delay the construction timeline.
DON'T make other big purchases (such as a new car) before you close on your home.
DON'T change your job before you close on your home.
Frequently Asked Questions
Common questions about new construction homes
Ready to Build Your Dream Home?
Let us guide you through the new construction process. Our team specializes in helping Delaware buyers navigate builder contracts, timelines, and customization choices.