Home Buying in Eden Prairie>Question Details

1sthomebuyer, Home Buyer in Eden Prairie, MN

Hennepin village(Ryalnd Homes), Eden Prairie- I see so many of the pre-owned homes coming up for sale.

Asked by 1sthomebuyer, Eden Prairie, MN Mon May 25, 2009

Buy now Or wait ? The pre-owned home prices are not much below the newly built home prices. Why would the people buy the pre-owned when they can buy a newly built home from the builder for a similar price?

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Answers

6
Excellent question! When a seller is still competing against the builder of his/her home, it can be very challenging. In a market such as this, the prices have declined since the seller may have purchased their home two or three years ago. The builder, who should have sold out by now, still has inventory. The builder has drastically lowered their prices since they began selling these homes and may have “deeper” pockets to do more discounting. This leaves the seller who bought a few years ago in a sticky situation. They now owe more than their home is worth. Add to this the improvements that the seller has made. Many times these are not thought of. The seller most likely has done all the window treatments and decorating. They may have added light fixtures, appliances, water softeners, landscaping, etc. Unfortunately, the buyer looks at the wonderful models and does not know what all the additions they see cost over what they will get if they buy new. The models typically have every upgrade. In order for the seller who bought a few years ago to compete against the neighboring new construction, they need to offer the buyer more. Some sellers are not in a position to be able to do this.
Debbie Nelson

Coldwell Banker Burnet
0 votes Thank Flag Link Tue Nov 17, 2009
I love my peers answers, they hate mine. I did a quick look at Hennepin Village, 1 foreclosure. First, builders make more money on TH's per acre because of the gross profit TH's generate. The builders have had to lower their margins and in some cases undercut previous sales prices. Upgrades are the main reason properties differ, along with location within the project. Some lots/views are simply better than others.
The actives I looked at, the owners were losing money, big money. Your realtor should tell you what they paid, easily determined.
Hennepin Village has several types of properties and models. Each one has to be compared with comparable sales. I am not saying do not buy, I am saying be careful. If you might have to move in a couple of years. you might lose some money. TH's are often overbuilt and the last to appreciate. Less risk in single family. When depreciation replaced appreciation, new rules, main one, you have to stay longer. The agent put the problem perfectly, TH's are a transition, not a good idea if you have to move in two years, you will lose money. On this Q& A forum, people have bought Lofts and condos since 2006, want to move, they can't
because they owe more than it's worth. Do a lot of lifestle planning before you make your buy. You will lose a lot more than the $8,000 tax credit with the wrong buy.
0 votes Thank Flag Link Thu Oct 1, 2009
Hello 1sthomebuyerbuyer,

This was a question I dealt with on a daily basis when I worked for Ryland Homes in Hennepin Village. If you are still in the marked please give me a call. Hennepin village actually had a relatively small percentage of people moving out before the community was complete. I found that even the townhouse owners wanted to stay because they liked the community so much. Typically the townhouse owners are a transition buyer and don’t stay all that long. You have to take into consideration that it is a large community and will therefore have more people moving in and out at any given

If you want additional information or have friends or family who are interested in this community, I would be glad to assist you.

Jason Lund
Realtor
Dwell Realty Partners
612.226.6278
jasonlund@dwellrealtypartners.com
0 votes Thank Flag Link Tue Sep 29, 2009
It all depends on how all available units compare. Throughout the years, I have had clients who just never buy anything pre-owned: homes, cars, or other things. For those people, the market couldn't be better now.
Others like to get a great value, so we compare homes carefully. When you have an experienced agent working for you, you will be able to consider and compare all aspects of the transaction: price, value, costs of acquiring financing, costs of the total transaction, what seller pays on your behalf vs. what you have to bring to the table, etc.
If you are looking for an experienced agent with strong negotiation skills, call me.

Marzena Melby
Counselor Realty, Inc.
612-267-6798
0 votes Thank Flag Link Mon May 25, 2009
Unless you buy a house that's completed (also called a Spec Home) you will find it very easy to add $1000's in upgrades. In addition, once you get into a house you still have painting and window treatments. In an apples to apples comparison new construction is the way to go but rarely do you find the situation so simple.

Builders are offering some good incentives today so it could very well be that new construction is cheaper than "used." Just because a reselling homeowner is asking that much doesn't mean they'll get it.
0 votes Thank Flag Link Mon May 25, 2009
Lots of factors can weigh in. The location within the complex may make some homes more attractive to buyers so a pre-owned with a better view/location would be more desireable than new. And there may be upgrades the owners put in that are higher end than builder quality like appliances, flooring, lighting and paint finishes. In some cases, the builder base price may not include any upgrades which may add to the price. However, if a builder has an inventory to sell and is need of cash flow, there might be good deals on new homes that would be hard to pass up.

If you have more questions of would like to go take a look at pre-owned and builder new homes, I'd be happy to assist. I live and practice real estate right here in Eden Prairie.

Sherry Winters
(612) 817-7907 Cell/Text
0 votes Thank Flag Link Mon May 25, 2009
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