A complete new construction buyer's guide for Greater Los Angeles — builder contracts, upgrade costs, lot premiums, energy standards, inspections, warranties, and the milestones from construction completion to ownership.
New Construction Buyer's Guide
What to Know Before Purchasing a Newly Built Home in Greater Los Angeles
Chana Gedy Real Estate | The Gold Glove Concierge Real Estate Service®
From selecting the right development and understanding builder contracts to evaluating upgrades, construction quality, and long-term ownership costs, discover how to approach a new construction purchase with clarity and confidence.
Understanding the New Construction Market
A Brand-New Home. A Different Buying Experience.
Purchasing a newly constructed home offers an opportunity to enjoy modern architecture, contemporary floor plans, updated building systems, and potentially greater energy efficiency.
However, buying directly from a builder or developer is different from purchasing an existing home.
The Greater Los Angeles area new construction landscape includes everything from individual custom residences and small-lot developments to luxury condominiums, townhomes, and master-planned communities.
Each type of development presents different opportunities, contractual considerations, and ownership responsibilities.
Understanding these distinctions before committing to a purchase can help you make a more informed decision.
Three Types of New Construction Purchases
Three Types of New Construction Purchases
Move-In-Ready Homes
These are newly completed properties available for relatively immediate occupancy.
Buyers can generally evaluate the finished home, its actual layout, materials, and workmanship before purchasing.
Customization opportunities may be limited.
Homes Under Construction
These properties are being built but have not yet reached completion.
Depending on the construction stage, buyers may have opportunities to select finishes or certain upgrades.
The final delivery date may change because of permitting, inspections, labor availability, materials, or other construction-related circumstances.
Pre-Construction Purchases
Buyers commit to a property before construction is substantially underway.
This may provide more choices involving location, floor plan, and finishes, but requires careful evaluation of the developer's plans, contract terms, financial arrangements, and anticipated completion timeline.
New Construction vs. Resale Homes
New Construction vs. Resale Homes
| Consideration | New Construction | Existing Home |
|---|---|---|
| Property condition | Newly built, but workmanship still requires evaluation | Condition varies by age, maintenance, and improvements |
| Customization | May offer builder-selected upgrades and finishes | Often requires renovations after purchase |
| Contract structure | Frequently uses builder-prepared agreements | Often uses established resale contract forms |
| Closing timeline | May depend on construction completion | Generally based on an agreed escrow period |
| Warranty coverage | May include builder warranties and statutory protections | Depends on applicable warranties and negotiated terms |
| Neighborhood maturity | Surrounding development may still be underway | Established surroundings may be easier to evaluate |
Before You Visit a Builder's Sales Office
One of the most important decisions should happen before your first visit.
A builder's sales representative generally represents the builder's interests. The representative may provide useful information about available homes, pricing, and development features, but does not automatically represent you as the buyer.
Builder registration policies may also affect whether an independently represented buyer can have their broker recognized in the transaction.
Arrange Your Own Representation
Arrange your own representation before registering online, touring model homes, or visiting a new development. Review the applicable buyer representation agreement and compensation arrangements before proceeding.
Choosing the Right Home, Lot & Development
Look Beyond the Model Home
Model homes are designed to showcase a property's potential.
They may feature upgraded finishes, professionally designed interiors, premium landscaping, and optional amenities that are not included in the advertised base price.
Before choosing a home, understand exactly what you are purchasing.
Evaluating the Lot and Location
Two homes with identical floor plans can offer very different ownership experiences.
Consider the Following
Lot Orientation
Sun exposure can influence natural light, indoor temperatures, outdoor comfort, and energy use.
Privacy and Views
Evaluate neighboring windows, future construction, lot elevation, and whether advertised views could change.
Street Position
Corner lots, cul-de-sacs, interior streets, and properties near community entrances may offer different advantages and trade-offs.
Topography and Drainage
Sloped properties, retaining walls, drainage systems, and hillside conditions deserve careful evaluation, particularly in Greater Los Angeles.
Surrounding Development
A quiet model-home setting may look different once surrounding phases are completed and occupied.
Understanding Lot Premiums
Builders may charge additional amounts for properties with desirable characteristics, such as larger lots, preferred locations, or particular views.
A lot premium is not necessarily equivalent to the amount future buyers will pay for that feature.
Evaluate whether the premium is justified by the property's characteristics, comparable values, and your long-term ownership goals.
Researching the Development
Before Purchasing, Investigate
- The builder's experience, completed projects, and reputation.
- Whether the property is part of a subdivision or planned development.
- The status of required permits and governmental approvals.
- Proposed future construction phases.
- HOA governing documents, budgets, restrictions, and anticipated assessments.
- Special taxes or assessments, including Mello-Roos where applicable.
- Parking arrangements, guest parking, and community access.
- Planned amenities and whether their completion is contractually guaranteed.
- Applicable insurance requirements and availability.
For qualifying subdivisions, California Department of Real Estate public reports can provide important information about the development, including certain ownership, financial, and subdivision-related matters.
California Energy Standards and Solar Systems
California's building energy standards have evolved significantly.
The 2025 Energy Code applies to qualifying permit applications submitted on or after January 1, 2026.
Depending on the project and applicable requirements, new homes may incorporate solar photovoltaic systems, heat-pump technology, electric-ready infrastructure, and battery-storage readiness.
Before Purchasing, Determine
- Whether solar panels are included in the purchase price.
- Whether the solar system is owned, financed, or subject to a lease or other agreement.
- Whether battery storage is installed or the home is only battery-ready.
- What equipment warranties and maintenance responsibilities apply.
- Whether the home has electric vehicle charging infrastructure.
- Which energy standards apply to the property's permits.
Verify the Permit Dates
A newer construction date does not necessarily mean the home was permitted under the newest building standards. Verify the applicable permit dates and requirements.
Builder Contracts, Upgrades & Incentives
Understanding What You're Agreeing To
Builder purchase agreements often differ from contracts used in traditional resale transactions.
They may contain detailed provisions addressing construction completion, deposits, changes in materials, delays, financing, inspections, and dispute resolution.
Before signing, carefully review the builder's obligations and your contractual rights.
Key Contract Provisions to Review
Key Contract Provisions to Review
Purchase Price and Included Features
Confirm the base price, lot premium, selected upgrades, appliances, landscaping, and other included items.
Deposit Requirements
Understand the initial deposit, additional construction or design deposits, payment deadlines, and the circumstances under which funds may be refundable or forfeited.
Estimated Completion Date
Determine whether the builder provides a guaranteed completion date, an estimated delivery window, or contractual extensions.
Construction Changes
Review whether the builder may substitute materials, modify finishes, or change certain plans and specifications.
Cancellation Rights
Understand the contractual circumstances allowing either party to cancel and the potential financial consequences.
Dispute Resolution
Review any mediation, arbitration, or other dispute-resolution provisions with qualified legal counsel when appropriate.
The True Cost of Builder Upgrades
A property's advertised starting price may not reflect its final purchase cost.
Common upgrades include flooring, cabinetry, countertops, lighting, electrical improvements, appliances, and outdoor enhancements.
Consider the following hypothetical example:
Hypothetical Purchase Cost Example
| Purchase component | Cost |
|---|---|
| Advertised base price | $1,200,000 |
| Lot premium | $35,000 |
| Kitchen and appliance upgrades | $28,000 |
| Flooring and bathroom upgrades | $22,000 |
| Electrical and lighting upgrades | $10,000 |
| Total purchase price | $1,295,000 |
$95,000
In this example, the final price is $95,000 above the advertised base price.
Upgrades can improve your enjoyment of the home, but their cost may not translate into equivalent resale value.
Builder Incentives: Evaluate the Entire Package
Builders May Offer Incentives Such As
Closing cost credits
Mortgage interest rate buydowns
Design center allowances
Appliance packages
Lot premium adjustments
Selected upgrades
These incentives can provide meaningful value, but the terms deserve careful comparison. Some offers may require using a preferred lender or title and escrow provider.
Preferred Lender vs. Independent Financing
A builder's preferred lender may offer competitive financing or access to certain incentives.
However, buyers should understand how those incentives affect the overall loan terms.
Compare
| Interest Rate | The rate charged on the mortgage. |
| Annual Percentage Rate (APR) | A broader measure of borrowing costs that includes certain financing charges. |
| Discount Points | Upfront charges paid to reduce the interest rate. |
| Lender Fees | Origination, underwriting, and other applicable charges. |
| Cash to Close | The total funds required to complete the transaction. |
| Long-Term Cost | How the loan affects your payments and overall financing expense. |
Calculate the Net Value
Compare written Loan Estimates and calculate the net value of any builder incentive. A substantial advertised credit is not necessarily the best financial arrangement if other financing terms are less favorable.
Construction Quality, Inspections & Warranties
Brand-New Doesn't Mean Problem-Free
New construction can offer modern systems and updated materials, but even newly completed homes may contain workmanship defects, installation issues, or incomplete items.
Municipal inspections serve important regulatory purposes, but they are not a substitute for independent property evaluations conducted on behalf of the buyer.
Independent Inspections Matter
Depending on the construction stage, contractual access, and property characteristics, buyers may consider several types of inspections.
Types of Independent Inspections
Pre-Drywall Inspection
When permitted by the builder, this inspection occurs before walls are closed.
It may provide an opportunity to examine accessible framing, plumbing, electrical, and other construction components.
Final Home Inspection
An independent inspector evaluates accessible components of the completed home, including major systems and visible conditions.
Specialized Inspections
Additional evaluations may be appropriate for foundations, drainage, roofing, retaining walls, or other property-specific concerns.
The Builder Walkthrough and Punch List
Before closing, builders commonly conduct a homeowner orientation or final walkthrough.
This is an opportunity to learn about the home's systems and identify visible items requiring attention.
A Punch List May Include
- Paint and drywall imperfections.
- Cabinet and door adjustments.
- Damaged or incomplete finishes.
- Electrical or lighting issues.
- Plumbing fixture concerns.
- Window and door operation.
- Appliance installation or operation.
- Landscaping and drainage concerns.
Document outstanding items and confirm the builder's process and timeline for addressing them.
Understanding New Home Warranties
Builder warranties vary in coverage, duration, exclusions, and claims procedures.
California also provides statutory protections and construction-defect procedures applicable to qualifying new residential construction.
Under California's Right to Repair Act, commonly associated with SB 800, certain construction-defect claims are subject to specific standards, notice requirements, and procedures that may give builders an opportunity to inspect and repair alleged defects before litigation.
These legal protections are not identical to a builder's voluntary warranty.
Before Closing, Obtain and Review
- The written builder warranty.
- Coverage periods for different components.
- Exclusions and maintenance obligations.
- Procedures for submitting warranty requests.
- Applicable deadlines and documentation requirements.
- Manufacturer warranties for appliances and equipment.
What Happens After Move-In?
Some construction-related issues may become apparent only after the home has been occupied.
Examples include door adjustments, settlement-related cosmetic changes, drainage concerns, or equipment performance issues.
Maintain records of communications, service requests, inspections, repairs, and warranty documents.
Report concerns promptly and follow applicable warranty and legal procedures.
Important: Do not assume every construction issue is covered by a warranty or that all components share the same coverage period.
From Construction Completion to Ownership
Preparing for the Final Stages
A new construction closing may depend on milestones that do not arise in the same way during a traditional resale transaction.
These can include final inspections, governmental approvals, lender requirements, title matters, and the builder's completion obligations.
Important Milestones Before Closing
Important Milestones Before Closing
- 1
Confirm the Home's Completion Status
Determine which improvements are complete and whether any contractual items remain outstanding.
- 2
Verify Required Governmental Approvals
Confirm the status of applicable final inspections and certificates of occupancy or equivalent authorizations, as required for the property.
- 3
Review Final Construction and Upgrade Documentation
Confirm that agreed-upon selections, upgrades, and included features are accurately reflected in the completed property.
- 4
Coordinate Final Financing
If construction has taken several months, updated financial documentation, appraisal requirements, or loan approval conditions may be necessary.
- 5
Review Ownership Costs
Confirm anticipated property taxes, special assessments, HOA obligations, insurance costs, utilities, and other recurring expenses.
- 6
Complete the Final Walkthrough
Document incomplete work or visible concerns and establish how outstanding items will be handled.
- 7
Organize Your Homeowner Documents
Retain the purchase agreement, amendments, plans and specifications provided, warranty information, equipment manuals, and closing records.
The CGRE Approach to New Construction
At Chana Gedy Real Estate, we understand that purchasing a newly constructed home requires more than selecting a floor plan and signing a builder agreement.
It involves evaluating the development, understanding contractual commitments, assessing pricing and upgrades, coordinating with construction and financing professionals, and preparing for the responsibilities of ownership.
Through The Gold Glove Concierge Real Estate Service®, Chana Gedy provides personalized buyer representation, strategic negotiation, local market knowledge, and hands-on coordination throughout the purchasing process.
Our established relationships with mortgage lenders, contractors, inspectors, and other industry professionals allow us to connect clients with qualified resources when additional expertise is needed.
Whether you're considering a luxury custom residence, a newly developed townhome, or a home within a planned community, our objective is to help you evaluate the opportunity thoughtfully and move forward with confidence.
Your Next Chapter Begins With the Right Strategy
Chana Gedy, Real Estate Broker
Schedule Your Personalized Buyer Consultation
Chana Gedy, Real Estate Broker
Chana Gedy Real Estate (CGRE)
The Gold Glove Concierge Real Estate Service®
DRE #: 02031085
Cell: 310-499-6249
Quality Over Quantity. Built on Integrity, Backed by Results.
Important Information
This guide is provided for general educational purposes and does not constitute legal, tax, construction, lending, or financial advice. Builder agreements, warranty provisions, financing incentives, governmental requirements, and construction practices vary by property and may change. Buyers should consult qualified professionals, review applicable contracts and disclosures, and independently verify information relevant to their transaction.
Your New Construction Purchase Deserves Expert Representation
At Chana Gedy Real Estate, we understand that buying a newly built home involves more than selecting a floor plan. Through The Gold Glove Concierge Real Estate Service®, Chana Gedy provides personalized buyer representation, Greater Los Angeles market expertise, strategic negotiation, and hands-on coordination throughout the new construction purchasing process.
Schedule Your Personalized Buyer ConsultationThe Gold Glove Concierge Real Estate Service®
