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Building a Pre-Sale Home in the Raleigh Area: Preconstruction Options

The process of building a new home in Raleigh has changed in recent years. Banking regulations, new loan standards and other economic factors have altered how home builders are doing business. Not long ago, Raleigh was filled with spec homes - new construction properties built without a specific purchaser in mind. The trend at that time was for builders to speculate about what a buyer of a new home might want, build it, and then wait for the right buyer to come along.

But, as Bob Dylan said, the times are a-changin'. It's no longer easy for a builder to get financing for construction without first selling the home to a buyer. This is known as a presale, and it has become the new norm for buying a new home in the Raleigh market.

There are two primary routes to purchasing a new construction home through a presale: through a major production company (Like Centex, Forever Home, etc€¦) or through a local custom builder.

The process of purchasing a production home is extremely linear, meaning it saves time, money, and frustration. The nature of the business also means that clients can get more house for their dollar, since they are dealing with a national company with established vendor relationships. The process begins with choosing a floor plan. After that, the buyer enters a contract with the company. After the contract process is complete, the buyer chooses the specifics of the home design from a check-list of options, and then the price is re-calculated based on those choices. Production homes offer an opportunity to live in new construction for buyers with little experience or interest in designing specific aspects of their homes. An example of an older production built neighborhood in North Raleigh would be Durant Trace. Bedford at Falls River is a great example of a Raleigh neighborhood with that mixes production built homes with custom homes.

Though production homes are generally less expensive, this does not necessarily mean that the homes are low quality. With production homes, greater flexibility comes with a larger price. While production companies do have big-business concerns, they still recognize that paying customers demand satisfying results. Additionally, buyers can find a production company that has an option for semi-custom designs. In this case, the production will provide the basic skeleton of the home and allow you greater leeway in deciding how to customize it.

The other option is a custom home. The process is more involved, and lets the buyer choose details and fixtures from any place they choose. This process is more fluid - once buyers enter a contract with the builder, changes can be made or rethought at many points throughout the process. Custom builders offer access to local Raleigh vendors allowing more options for customization, and guidance on achieving your design goals while staying in budget.

Here are some things to consider when choosing between a custom or production home:


  • More control over the contract terms

  • More expensive, with more personalized service from a local businessperson

  • Custom builders answer to you, their client, rather than shareholders and CEOs

  • Compatibility with your builder is key! Make sure you get along well, because you'll be together for a long time


  • Less bargaining power in the contract

  • More affordable, but customers have to deal with a large, national company

  • Generally a quicker process for buyers that are not as concerned with the small details of their home design

  • Production companies can finance the construction for you, saving the headache of adding another party to the transaction

There is another variable to keep in mind before making your decision and it goes back to the old real estate mantra of €location, location, location.€ If you are searching for a new construction home to build in a planned community, you should investigate whether the community has any restrictions on the type of construction allowed. Some communities only allow production houses from a few, specific builders. Other communities might not allow production homes at all.

No matter the route you choose in obtaining your new construction home, we can help. I started my career working for a regional builder and Scott is a licensed general contractor and former custom home builder. Our experience in the area and familiarity with major industry players allow us to manage the builder-client relationship in case of any bumps in the road. The building process can take 6 months give or take; if you don't get along with your builder then you will be miserable. We will handle bumps along the way for you and represent your interests to be sure you get what you want. We are not above playing good cop/bad cop either€¦

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