Buying a home
New Construction vs Resale Homes in the Sacramento Region
How buying from a builder differs from buying a resale home, from contracts and incentives to Mello-Roos and warranties.
Should you buy new construction or a resale home?
Both can be a good choice. It comes down to what you value and the full monthly cost.
- New construction gives you new systems, current building standards, a builder warranty and the chance to pick finishes. Many newer communities around Roseville, Rocklin, Lincoln, El Dorado Hills, Elk Grove and Sacramento also carry Mello-Roos taxes and HOA dues.
- Resale homes often have mature trees, bigger lots and established neighborhoods. You can usually negotiate more on price and terms. You'll inherit some age and wear, which your inspection should price out.
We compare them on one sheet: price, property tax, Mello-Roos, HOA, insurance and likely repairs, so you see the true monthly number for each.
How is a builder's contract different from a resale contract?
Resale homes in California are usually bought on a standard purchase agreement. Builders typically use their own contract, written by their attorneys for their protection.
Things to read for in a builder contract:
- When your deposit becomes non-refundable. The CFPB (page last modified December 12, 2024) advises asking the builder, before you commit, under what conditions the builder deposit can be returned.
- How the closing date can move if construction runs late.
- Whether you can bring your own inspector, and when.
- Whether upgrade payments are refundable.
- How disputes are handled, such as arbitration.
Builder contracts are often less negotiable than resale contracts. You still deserve to understand every page. This is general information, not legal advice, and a real estate attorney can review a builder contract for you.
Are builder lender incentives worth it?
Sometimes. The CFPB (page last modified December 12, 2024) notes that homebuilders often have an associated lender and that you have the right to shop around for a better deal.
An incentive may be tied to using the builder's lender. The question is what the whole loan costs, not just the incentive. Compare the rate, the lender fees and the cash to close on official Loan Estimates for the same loan amount. Our page on Loan Estimates and Closing Disclosures shows how to line them up.
Maggie is a mortgage broker. She can quote the same loan across a network of approved lenders so you can compare against the builder's offer. Get a quote from us and compare it, and if the builder's package wins, take it. See also purchase loans and rate locks and points, which matter on homes that take months to build.
How do you decide on upgrades?
Model homes show many options. Each one adds to your price and usually your loan.
A few ways to think about it:
- Spend first on things that are hard to change later: structural options, extra outlets, plumbing locations, ceiling height, lot choice.
- Paint, light fixtures and some flooring are often cheaper to change after closing.
- Ask which upgrades are paid in cash up front and whether that money is refundable.
- Think about resale. Ask how homes with and without a given upgrade have sold in that community.
What are Mello-Roos and HOA costs in new communities?
Many newer communities pay for roads, parks and schools through a Community Facilities District, called Mello-Roos. It shows up as a special tax on your property tax bill. Many also have an HOA with monthly dues and rules.
Both change your real monthly payment. Ask the builder for the Mello-Roos amount, how it can change and when it ends. Ask for HOA dues and the budget. Our guides explain both: Mello-Roos and HOA fees and rules. You can estimate base property tax with our property tax calculator.
What warranty comes with a new home in California?
California Civil Code section 900 (checked October 22, 2026) requires a builder to give you at least a one-year written limited warranty on fit and finish. That covers cabinets, mirrors, floor coverings, interior and exterior wall surfaces, countertops, paint finishes and trim.
California's building standards law also sets longer time periods for certain construction defect claims. Builders often add their own written warranty with set terms for systems and structure. Read the builder's warranty booklet before you sign, and ask:
- How do I report a warranty item, and how fast will someone respond?
- Is there a scheduled walk-through before the first year ends?
- What is excluded?
Keep a running list of items in your first year, and submit them in writing.
Do you need an inspection on a brand-new home?
Yes, we recommend it. City or county inspectors check that work meets code at certain stages. A private home inspector works for you and looks for missed or unfinished items.
Many buyers order two:
- A pre-drywall inspection, if the builder allows it, while framing, plumbing and wiring are still visible.
- A final inspection before your final walk-through, so issues go on the builder's list before closing.
Some buyers also order a check shortly before the first-year warranty ends. Ask the builder early what access they allow.
Why have your own agent when buying from a builder?
The builder's sales representative works for the builder. Your own agent works for you: comparing builders and communities, reading the contract, pressing on incentives, keeping inspections on track and thinking about resale.
Timing matters. Many builders require your agent to be with you or register you on your first visit. If you walk in alone first, some won't let an agent join later. Call before you tour.
How your agent is paid is set in writing between you and your agent, and commissions are always negotiable. Builders sometimes offer to pay part of it. Our guide to buyer agent commission explains how that works. For more, read Maggie's post What Builders Don't Want You to Know.
How do you get started comparing new and resale homes?
Before you tour a model home, call us. Maggie B. Hopkins and Rachel Dee Minyard can register you, compare the community against resale homes nearby and line up a loan quote to compare against the builder's lender.
Send us a note or call Maggie's cell at (916) 549-3131. The free buyer guide walks through the rest.
Frequently Asked Questions
Do I have to use the builder's lender?
No. The CFPB notes you have the right to shop around. An incentive may be tied to the builder's lender, so compare full Loan Estimates for the same loan before deciding.
Can I negotiate with a builder?
Often less than on a resale home, but sometimes on incentives, upgrades, closing costs or a finished spec home. It depends on the builder and the market.
What warranty does California require on a new home?
California Civil Code section 900 requires at least a one-year written warranty on fit and finish items like cabinets, flooring, countertops, paint and trim. Builders often add their own warranty terms.
Should I get an inspection on new construction?
Yes. A private inspector works for you. A pre-drywall check and a final check before your walk-through catch items while the builder can still fix them.
Do new homes have Mello-Roos?
Many newer communities in the region do. Ask the builder for the amount, how it can change and when it ends, and read our Mello-Roos guide.
Can I bring my agent after my first visit?
Some builders won't allow it. Many require your agent to register you on the first visit, so call your agent before you tour.
Is my builder deposit refundable?
It depends on the builder's contract. The CFPB suggests asking the builder, before you commit, under what conditions the deposit can be returned.
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