Considering closing on a new construction home? Congratulations! But wait!
Before you do, knowing what to expect after the construction process will make the process flow more seamlessly and give you peace of mind.
Jazz Construction here: for decades, our home builders and construction team have been helping people build, finance, and navigate the ins and outs of the new construction home process.
If you’re looking for a few pointers about what to do before closing on a new construction home in New Jersey, you’ve come to the right place.
In this article, we’ll take you through 13 pieces of advice that have helped countless customers navigate the new construction home process.
The 13 things to know before closing on a new construction home
| 1. Determine the type of new construction home you want. 2. Consider your choices for locations and floor plans. 3. Research your financing options. 4. Open an account for escrow. 5. Get a title search and homeowner’s insurance. 6. Prepare closing costs and documents related to closing. 7. Conduct a home inspection on the home. 8. Also, conduct a separate pest inspection. 9. Consider renegotiating the offer for the home. 10. Finish and submit your mortgage application. 11. Conduct an appraisal of the home. 12. Complete a final walkthrough of the home. 13. Sign the final documents. |
1. Determine the type of new construction home you want
Closing on a home is the final step towards homeownership.
Since the new construction closing process can take a while, you’ll want to make sure that the new construction home is the one you want. You’ll need to choose between custom homes, semi-custom homes, spec homes, design-build homes, and design-bid-build homes.
If you’re looking to customize your new digs, you’ll also want to budget for potential upgrades you envision completing in your new home. But once you have your vision for your new home, you’ll need to decide where to build it, which brings us to location and floor plans.
2. Consider your choices (location and floor plans)
After you’ve figured out what you want from your new construction home, you’ll need to determine where you want your new home. Ask yourself questions, such as:
- Do you want to have neighbors nearby?
- Do you want to live in a cul-de-sac?
- Do you prefer living on a large plot of land without many neighbors?
You’ll want to reach out to your builder with questions about the boundaries of the land, where you can park, timelines for completion, and any potential building projects near your new house that could affect your new home build.
Once you know what type of home you’re looking to build, you’ll need to determine its cost. Knowing how much your home will cost will give you a better idea about how to approach potential mortgages and financing options on the market.
3. Research mortgages and financing options
As you determine the costs for homes, we always recommend shopping around. Many home builders provide in-house financing options or long-standing partnerships with reputable lenders.
What’s more, you can also reach out to your local bank or credit union, as they often offer mortgages and excellent deals since you have a banking relationship with them. Either way, you’ll want to shop around to determine the best deals.
Once you’re preapproved or prequalified by the lender of your choice, you’ll want to apply for a loan. Nevertheless, you should apply for multiple loans, as you may find better deals than the lender that first approved you for a loan.
After selecting multiple lenders, you can then compare the loans offered with the builder’s lender and determine which lenders offer the best deals.
Once you choose a lender, it’s time to open an escrow account with them.
4. Open an escrow account with your lender
In an escrow account, payments are collected and managed by a third party, such as a credit union, bank, or escrow agent.
Money and documents are moved from the account to the seller and buyer once all procedures related to the new construction home are complete. The next step is to conduct a title search and title insurance search.
5. Get a title search and insurance
A title search? Yup, a title search.
A property title search researches public records to confirm a property’s rightful, legal owner.
“You mean someone else could claim that they’re the legal owner of the property?” That’s right.
Conducting a title search and purchasing title insurance is crucial to ensure no one else can make a claim or lien on the property. Essentially, you’re ensuring there aren’t any outstanding issues with the house that would preclude you from purchasing the home.
By conducting a title search — and by purchasing title insurance or hazard insurance from a title company — you’re protecting yourself and your lender from potential claims that stipulate that you owe money on your new home.
6. Prepare closing costs and documents
Before the actual closing of your dream home, you’ll want to obtain a cashier’s check or certified money order for the final closing costs. Final closing costs tend to equal between 2-6% of the purchase price of the home.
Closing costs can include any of the following:
- Service charges: such as appraisals, credit report requests, requests for tax status, title search and title insurance, and survey fees
- Origination fees: This is an upfront fee charged by lenders to process new home loan applications.
- Transfer taxes and recording fees: Transfer taxes are taxes that are passed on to the buyer or seller of a property when passing the title of a property from one owner to another. A recording fee is similar to a transfer fee in that a government entity charges buyers or sellers to record a home purchase.
- Escrow costs: Final items to pay in escrow include homeowners insurance, applicable property taxes, primary mortgage insurance, and homeowner association (HOA) fees if applicable.
Once you’ve completed these items, before closing on a house, you’ll want to conduct a home inspection for added peace of mind.
7. Conduct a new construction home inspection
You might be buying a new home and think, “It’ll be flawless.” Nevertheless, problems can still arise.
As such, you’ll want to conduct a home inspection to catch any potential defects and to ensure a smooth transfer of ownership.
A home inspection can reveal parts of the home that weren’t installed well or that need repairing.
8. Conduct a pest inspection on the new home
In addition to a home inspection, you should also conduct a pest inspection to ensure termites and other property-destroying pests aren’t inside the home.
What’s more, many mortgage companies mandate pest inspections before closing on new construction homes to help reduce liability.
9. Consider renegotiating the home offer
Based on the home and pest inspections, repairs could be needed. With that being said, if repairs are needed, before closing on your new home, consider renegotiating the asking price of the home.
An alternative solution is to keep the purchase price the same but ask the seller to pay for repairs. Both options will ensure that your new home is ready to go.
10. Complete your mortgage application
If you’re opting for a mortgage, you’ll need to submit paperwork and records of your finances. Ensuring you’re preapproved by a mortgage lender will help expedite the closing process.
What’s more, doing so also helps keep your interest rate locked at the same rate, so don’t become susceptible to changes in the market.
11. Get a house appraisal
Many mortgage lenders require a lender’s appraisal to assess the value of the home. What’s more, a lender appraisal can help you determine your interest rate, required down payment, and whether you’ll be approved for a mortgage.
This appraisal is conducted to ensure that the loan provided by a potential lender offering you a mortgage loan isn’t risky. Oftentimes, the appraiser will determine that your home is the same as the agreed-upon purchase price.
If you notice a discrepancy between the appraiser’s valuation and the asking price of the home, renegotiation of the home’s price is an option.
12. Conduct a final walk-through of the home
You’ve spoken with an appraiser, procured a mortgage, and even chosen the home of your dreams. You’re almost move-in ready.
As part of the timeline for closing a new home, we often recommend conducting a final walk-through to ensure everything is as you expected. In a final walk-through, buyers verify that everything is in the condition they expected it to be per the last time they visited the home.
Should anything be amiss, you can talk with your real estate agent or builder to ensure all final features and systems are working as intended.
13. Sign final documents
After the repairs and requested changes from the walk-through have been made, you’re ready to sign the final documents. While we know you might be eager, you want to read the fine print before documents are signed.
We know these documents are long, but taking the time to scrupulously read each document will ensure you receive exactly what you want out of your new home. In particular, take note of the interest rate and the final home price.
If you think anything needs a second pair of eyes, don’t hesitate to reach out to an attorney. They’re familiar with and skilled at navigating complex legal documentation and verbiage associated with signing final documents on a new home.
Nevertheless, if everything is up to snuff, you’re free to sign the documents.
Then, the moment you’ve been waiting for finally arrives. It’s time to grab your keys and luxuriate in your beautiful, brand-new home.
A Jazz moment: did you know?
Did you know that New Jersey has some of the highest closing costs in the nation? According to LodeStar (2025) data, New Jersey ranks 13th in the U.S. on average closing costs, with recording and taxes.
In fact, LodeStar states that the average closing cost in New Jersey is recorded as $5,410 based on the state’s average sales price for a home, $587,816. For more helpful home facts and jazzy designs, check us out on social media.
Before closing on a new construction home, choose a reliable home builder.
Navigating the closing process can be challenging. With 13 or more aspects involved, we understand why buying a home can feel overwhelming.
That’s why it’s crucial to choose a reliable home builder and in-house design-build firm for all your new construction home needs.
A design-build firm has design and building capacities under one roof, making the process seamless from concept to completion.
Nevertheless, we know that closing on a new home can be stressful. Can we help?
Our home construction and real estate specialists have seen and done it all. From helping homeowners close on their beautiful new home to building custom homes from scratch, our construction team has more than 20 years of experience navigating the complex waters of home construction and real estate.
We’d love to be of service to you.
For help with home closing or purchasing, selling, or building a new home, we invite you to chat with a member of our expert home construction team. We look forward to helping you on the exciting journey ahead.
