New Construction Homes
Buying new is a different transaction than buying resale. Different contract, different negotiation, different inspections, different tax surprise in year two. Here is how it actually works — and where buyers currently have leverage.
Buying new construction means purchasing from a builder rather than a homeowner, using the builder's own contract instead of the standard state form. The onsite sales representative works for the builder. Buyers who want their own representation generally need to bring their agent to the first visit, because most builders' registration policies tie representation to that initial sign-in. Steve Roake is licensed in Illinois and Indiana and has been a broker since 2003.
The One Rule That Costs Buyers the Most
Bring your agent to the first visit
Nearly every builder has a registration policy. When you walk into a model home and sign in without an agent, that registration typically stands, and bringing an agent in later is frequently refused. Not sometimes — routinely.
This costs you nothing to get right and cannot usually be undone. If you are even casually curious about a community, a two-minute call before you visit preserves the option. If you have already toured somewhere unrepresented, say so early rather than late, because occasionally it can still be worked out.
The reason this matters comes down to who the people in the sales office work for.
The onsite sales representative
Employed or contracted by the builder. Paid by the builder. Their duty runs to the builder. They are often knowledgeable, pleasant, and genuinely helpful about the product.
What they are not is your advocate on price, contract terms, incentive structure, or what to do when the build runs four months late.
Your own agent
Reviews the builder's contract against the standard contract, prices the incentive package against the open market, coordinates independent inspections, and holds the builder to the schedule.
In most new construction transactions the builder pays the buyer's agent compensation from the sale, which is negotiated in advance and disclosed in your buyer representation agreement.
Since August 2024, a written buyer representation agreement is required before touring homes with an agent. That agreement states what your agent is paid and who pays it. Ask how builder compensation is handled in your specific situation, and get the answer in writing before you tour.
Where the Leverage Sits Right Now
Builders are carrying more finished, unsold inventory than they have in years, and they are competing hard for buyers. That is an unusually good position to be negotiating from.
Recent national figures: roughly 37% of builders cut prices in July 2026, and about 63% are offering some form of incentive. New-home supply has run near nine to ten months, well above the six months considered balanced. Builders have also shifted toward smaller, lower-priced plans, which has brought new-home pricing closer in line with resale than it has been in some time.
Why builders discount with incentives instead of price
This is the part worth understanding, because it shapes what you should ask for.
A builder who drops the list price damages the comparable sales for every neighbor who already closed, and for every remaining home in the community. Incentives — rate buydowns, closing cost credits, design center allowances — move a house without touching the recorded contract price. So the builder's flexibility is real, and it is usually pointed at the incentive column rather than the price column.
Ask accordingly. Pushing for $15,000 off list may get you nowhere while $15,000 in flexible incentive gets approved the same afternoon.
Where the flexibility is greatest
- Finished, standing inventory. A completed home costs the builder money every day it sits. That is the most motivated seller on the lot.
- End of quarter and end of year. Closing targets are real and they move decisions.
- The last few homes in a community. A builder winding down wants to close the sales office.
- Communities where the builder has visible competition a short drive away.
Market figures reflect national data current as of August 2026 and are not specific to any community. Conditions vary considerably by builder, subdivision, and price point. Nothing here is a prediction.
Reading an Incentive Package Honestly
Incentives are worth real money and they are not all worth the same money. Two packages advertised at $20,000 can differ substantially in what they actually do for you.
| Incentive | What it does | Worth knowing |
|---|---|---|
| Permanent rate buydown | Lowers your rate for the life of the loan. | Generally the most durable value if you plan to hold the home. It keeps working whether or not rates fall. |
| Temporary buydown (2-1, 3-2-1) | Reduces the rate for the first two or three years, then it returns to the note rate. | Helpful for a near-term budget. Confirm you qualify at the full note rate, since that is the payment you inherit. |
| Closing cost credit | Reduces cash needed at the table. | Most useful when cash to close is the constraint. Does nothing for your monthly payment. |
| Design center allowance | Credit toward finishes and options. | Only worth its face value if you were going to spend it anyway. Check whether it applies to structural options or finishes only. |
| Price reduction | Lowers the contract price. | Least commonly offered, for the comp reasons above. Lowers your tax basis and loan amount, so it has quiet long-term value. |
About the builder's preferred lender
Most incentives are conditioned on financing through the builder's affiliated lender. That is legal and common. Two things follow from it.
You cannot be required to use them. Federal law prohibits conditioning the sale itself on your choice of lender, though incentives may be tied to that choice.
Compare the whole package, not the headline. Get a Loan Estimate from the builder's lender and at least one outside lender, and compare rate, points, origination, and total cost over the years you expect to own. Sometimes the incentive genuinely wins. Sometimes a better rate elsewhere beats it. The only way to know is the side-by-side, and it takes about a day.
The Builder's Contract Is Not the Standard Contract
In a resale you sign a form negotiated over decades between REALTOR® associations and attorneys, balanced by design. In new construction you sign a document the builder's attorney drafted to protect the builder. That is not sinister — it is simply whose document it is, and it is why review matters more here rather than less.
Clauses worth having your attorney look at specifically:
- Completion date language. How firm is it, what happens when it slips, and is there any remedy for you.
- Material substitution rights. Most contracts let the builder substitute materials of comparable quality. Understand how broad that is.
- Escalation clauses. Some contracts allow price increases for material cost changes after signing.
- Deposit terms. How much is at risk, when it becomes non-refundable, and what happens if your financing falls through.
- Arbitration and dispute resolution. Many builder contracts require arbitration and waive jury trial.
- Warranty terms and any waiver of implied warranties. See below.
- Anti-assignment. Most builders prohibit reselling the contract before closing.
- Attorney review and inspection riders. Whether the customary period applies at all, and for how long.
Illinois
Illinois practice generally involves an attorney on both sides. Builder contracts sometimes shorten or omit the attorney review period customary in resale. Confirm what period you have — and use it.
Illinois recognizes an implied warranty of habitability on new homes. Builder contracts frequently include an express warranty paired with a waiver of that implied warranty. Whether such a waiver is enforceable turns on how it is written and presented, and it is worth having counsel read it before you sign rather than after something fails.
Indiana
Indiana practice differs from Illinois in how closings are handled and in what is customary around attorney involvement. Builder contract terms, warranty structure, and disclosure obligations should be reviewed by an Indiana attorney.
Steve and Kimberly work both sides of the line and can refer counsel in either state.
Yes, You Should Inspect a Brand New House
The most common mistake in new construction is assuming a new home does not need inspecting. Municipal inspections confirm code compliance. They are not the same as someone working for you, looking at quality of work, on your schedule.
There are three inspection points, and most buyers use one of them.
Pre-drywall — the one that matters most
After framing, plumbing, electrical, and HVAC rough-in, before insulation and drywall close the walls. This is the only time anyone will ever see the bones of your house.
Framing, fasteners, plumbing runs, wiring, duct routing, flashing, and waterproofing are all visible and all repairable at low cost. A week later they are behind drywall and cost ten times as much to reach. Schedule this the moment the builder confirms rough-in is complete, because the window is days, not weeks.
Final walkthrough and orientation
The builder's orientation walks you through systems and generates a punch list. Bring your own inspector to the same stage or shortly before. Two people looking find more than one, and yours is looking for defects rather than demonstrating the thermostat.
Get every punch item in writing with a completion date. Verbal commitments in an empty house have a way of evaporating after you move in.
The eleven-month inspection — the one nobody does
Most builder warranties cover workmanship and materials for one year. A full season of heating, cooling, and settling reveals problems the walkthrough could not.
Book an inspection at month eleven and submit the list before the warranty expires. This single appointment recovers more money than any other step on this page, and the reason it works is simply that most owners forget the date.
On builder warranties generally: many follow a 1-2-10 structure — one year on workmanship and materials, two years on major systems, ten years on structural. Coverage, exclusions, and the claim process vary by builder and by whether a third-party warranty company backs it. Read the actual warranty document rather than the brochure summary.
The Property Tax Surprise in Year Two
This catches more new construction buyers in Will, Kendall, and Grundy counties than anything else on this page, and it is entirely predictable.
Your first tax bill is often assessed on land only, or on a partial year of the improvement, because the house did not exist for part of the assessment period. That bill looks wonderfully low. It is also temporary.
Once the home is fully assessed, the bill jumps — sometimes substantially. If taxes are escrowed, the lender then has to collect the shortfall and raise the ongoing monthly amount, so the payment increase lands harder than the tax increase alone.
Ask before you sign: what will the fully assessed tax bill be on this home, in this taxing district, once the improvement is on the books? Ask the county assessor rather than the sales office. Then budget from that number instead of from the first bill.
Special Service Areas and subdivision assessments
Many newer Illinois subdivisions carry a Special Service Area or similar mechanism, where infrastructure costs — roads, detention, utilities — are repaid through an additional charge on the tax bill for a set number of years. Some Indiana subdivisions use comparable arrangements.
This is disclosed and entirely legitimate. It is also easy to overlook, and it can add meaningfully to what you pay each year. Ask directly whether the community has one, what it costs annually, and how many years remain.
Also confirm the homeowners association structure — whether the builder still controls the board, when control transfers to owners, what the dues cover, and whether the reserve funding is realistic for a community that has not yet had to replace anything.
Upgrades, Lot Premiums, and Resale
Design center visits are enjoyable and expensive. Buyers commonly spend well into five figures beyond base price, and those dollars come back at very different rates.
Generally holds value better: structural changes that cannot be added later — an extra foot of ceiling height, a finished basement done during construction, a fourth bedroom, an expanded garage, rough-in plumbing for a future bath.
Generally returns less: finish-level selections. Premium fixtures, high-end flooring, and elaborate tile are personal, dated eventually, and can be changed by any future owner for a fraction of the builder's price.
Lot premiums deserve honest thought. A genuinely better lot — backing to open space, water, or trees, rather than to another home's rear elevation — tends to hold its premium. A premium for a marginally larger corner lot often does not.
The resale question nobody asks
If you buy in phase two of a five-phase community and need to sell in year three, you will be competing against the builder — who is selling brand new homes, with incentives, a sales office, and no urgency.
That is not a reason to avoid new construction. It is a reason to know your likely timeline before you choose between a community that is 20% built and one that is 90% built.
If there is any chance you move within five years, this belongs in the decision alongside the floor plan.
How the Representation Actually Works
New construction runs long. A build can take six months to a year, and most of that time nothing visible happens while a great deal is being decided.
- Before you tour — register you properly at every community so representation is preserved
- Community comparison — base price against total delivered cost, including lot premium, required options, taxes, and association dues
- Incentive analysis — the builder's lender package priced against outside Loan Estimates, side by side
- Contract review coordination — with your attorney, inside whatever review period the contract allows
- Inspection scheduling — pre-drywall booked the week rough-in finishes, plus final and the eleven-month reminder
- Schedule pressure — following the build, documenting delays, and keeping your closing coordinated with the sale of your current home
- Resale perspective — an honest read on which upgrades and which lot are worth the money
Steve builds valuations on a 1-mile radius, ±20% square footage, ±1 bedroom and bathroom, and similar age, garage, and basement, with each comparable adjusted individually rather than averaged. In a new subdivision that means separating what the builder is asking from what homes there have actually resold for.
Common Questions
Do I need my own agent to buy new construction?
You are not required to have one. The onsite representative works for the builder, so without your own agent nobody in the transaction represents you. Builder compensation for a buyer's agent is typically paid from the sale, and it is negotiated and disclosed in your buyer representation agreement.
What happens if I visit a model home without my agent?
Most builders have a registration policy tying representation to your first visit and sign-in. Bringing an agent in afterward is frequently refused. If you have already visited unrepresented, raise it immediately rather than later, since occasionally it can still be resolved.
Can I negotiate on a new construction home?
Yes, and in the current market there is meaningful room. Builders tend to resist list-price cuts because those affect comparable sales for the whole community, and they are far more flexible on incentives — rate buydowns, closing cost credits, and design allowances. Finished standing inventory carries the most flexibility.
Do I have to use the builder's lender?
No. Federal law prohibits conditioning the sale on your choice of lender, though incentives may be tied to using the builder's affiliated lender. Get a Loan Estimate from both and compare total cost, not the advertised rate alone.
Should I get an inspection on a brand new home?
Yes. Municipal inspections check code compliance, not workmanship quality, and they do not work for you. The pre-drywall inspection is the most valuable, because framing, plumbing, wiring, and waterproofing are visible only briefly. A final inspection and an eleven-month warranty inspection round out the set.
Why did my property taxes jump so much in the second year?
The first bill on new construction is often assessed on land only or a partial year of the improvement. Once the home is fully assessed, the bill rises to its real level. With escrowed taxes the lender collects the shortfall and raises the monthly amount, so the payment increase can be sharp. Ask the county assessor for the fully assessed estimate before you sign.
What is a Special Service Area?
A mechanism used in many newer Illinois subdivisions where infrastructure costs are repaid through an additional charge on the property tax bill for a set number of years. It is disclosed and legitimate, and it is easy to overlook. Ask what it costs annually and how many years remain.
Which upgrades are worth the money?
Structural items that cannot be added later tend to hold value — ceiling height, a basement finished during construction, an extra bedroom, expanded garage, rough-in plumbing. Finish-level selections generally return less, since they are personal and any future owner can change them for far less than the builder charges.
What areas do you serve?
Will, Kendall, Grundy, DuPage, and Cook counties in Illinois, and Lake, Porter, and La Porte counties in Indiana. Steve is licensed in both states; Kimberly Genovese is licensed in Indiana and handles the Northwest Indiana side.
Before You Tour, Let's Talk
Tell Steve which communities you are considering. He will register you properly so your representation is preserved, compare total delivered cost across them, and price the incentive packages against the open market.
Already toured somewhere? Say so — it is worth raising early.
Prefer to talk now? Call or text 630-912-9129.
Get Registered the Right Way
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About Constellation Home Sales
Steve Roake and Kimberly Genovese are the partners behind Constellation Home Sales | Freedom Group Global, operating under Keller Williams Preferred Realty in Orland Park.
Steve has been licensed since 2003 and carries licenses in both Illinois and Indiana. Kimberly has been licensed in Indiana since 2004. Together they cover new construction communities on both sides of the state line — across Will, Kendall, Grundy, DuPage, and Cook counties in Illinois and Lake, Porter, and La Porte counties in Indiana.
New construction rewards having someone on your side for the whole stretch. A build runs months, decisions arrive in a steady sequence, and the parts that cost the most — the contract, the pre-drywall window, the eleven-month warranty date — are the parts easiest to let slide while you are busy living your life.
Steve Roake
Licensed real estate broker · Illinois and Indiana
Licensed since 2003, with 615+ transactions closed and $113M+ in sales volume. Steve holds the ABR® (Accredited Buyer's Representative) and SFR® (Short Sales and Foreclosure Resource) designations.
Much of his work involves buyers coordinating a new build against the sale of a home they already own.
Kimberly Genovese
REALTOR® · Licensed in Indiana
Licensed since 2004 and a partner at Constellation Home Sales. Kimberly handles the Northwest Indiana side of the partnership, working Lake, Porter, and La Porte counties.
Northwest Indiana has its own MLS, its own closing practice, and its own tax structure. A partner working that market daily is why an Indiana build gets the same attention as an Illinois one.
Steve Roake and Kimberly Genovese are licensed real estate professionals, not attorneys, accountants, home inspectors, or mortgage lenders. Nothing on this page is legal, tax, or lending advice. Have a licensed real estate attorney review any builder contract, warranty, or waiver before signing; confirm property tax and special assessment figures with the county assessor; and obtain Loan Estimates from a licensed loan officer before comparing financing.
Market figures cited reflect national data current as of August 2026 and are not specific to any community, builder, or price point. Builder policies on registration, incentives, warranties, and compensation vary and change frequently. Confirm current terms directly with the builder. Nothing on this page is a prediction of future market conditions or home values, and no outcome is guaranteed.
