Home Buying in 08840>Question Details

Jun, Home Buyer in 08873

How to price a new home build on old fundation?

Asked by Jun, 08873 Mon Feb 4, 2008

I found a property in NJ Metuchen area which is new home build on an old foundation.
How to compare this kind of new home with brand new construction with new foundation?
How to price this kind of property?

Any advice about buying this kind of property will be appreciated.

Thanks.

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Hi Jun,

The use of an old foundation allows the builder to circumvent a problem with non-conforming lot characteristics that would otherwise require a variance. However there is usually not much savings in cost. In fact it can be more expensive to work around old concrete rather than just pouring or blocking a new foundation. From your standpoint, ignore it. Just compare this new home with other new homes without regard to this factor (as far as price). Keep in mind, though, that unless the builder expands the existing foundation to include new basement space, you might be faced with something less than a full basement. This would be a negative factor when making the comparison between this home and others available in your market. Good luck!

-Marc
Web Reference: http://www.marcpaolella.com
3 votes Thank Flag Link Mon Feb 4, 2008
I agree with both Marc & Don especially Marc. This type of property will have both positive and negative attributes to the other new homes in the area. The major positive attribute should be a significant savings on property taxes as compared to totally new construction if the builder didn't make any significant changeds to the original foot print..
As mentioned you MAY have odd room sizes or shapes and you will probably have a lower basement than brand new construction, but just note any possible negative attributes you percieve. If the house compares favorably with other new construction price it accordingly to the others because the tax savings should offset any negative attributes and also make the property more favorable to compared to them.
1 vote Thank Flag Link Mon Feb 4, 2008
I agree with Marc. Assuming the old foundation is structurally sound, that alone shouldn't have any effect on the price.

What I've noticed in homes I've seen where this has been done is that the houses' designs are often odd or peculiar. Not always, but often. In order to use the existing foundation--even if the overall size of the house has been expanded--there are often some strange trade-offs made. Room sizes may seem "off." Dimensions sometimes don't seem quite right. I'm think of several homes I've seen like that. One took a cheap 1950s rambler and tried to put a $1 million house in its place. The flow from the kitchen to dining room to living room was awkward. The basement was large, but with low head-room. And some of the bedrooms were tiny. In another case, again a 1950s rambler, they tried for a $1.3 million house. This was a better job, with better materials. But, again, basement was compressed. The flow from downstairs to upstairs didn't work. And the house's positioning on the lot worked as an older rambler, but not as a "new" colonial.

That's the sort of thing I'd look out for.

Hope that helps.
1 vote Thank Flag Link Mon Feb 4, 2008
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
As a former home builder, I would advise extreme caution. Hire a structural engineer to assess the foundation's structural integrity, and an architect to determine if the existing footing will be capable of the load bearing capacity of the new home. The foundation is the most important part of a home, Problems with that will be very costly.

Bob Bruno
Robert Bruno Realtor
(732)446-1776
bob@robertbrunorealtor.com
0 votes Thank Flag Link Sat Feb 6, 2010
From a practical point of view, only a town or area with real estate booming shall have such situation. That is to say many more buyers love the town and area but lack of land to build new homes, so the builder normally bought the old house and expand it. This is a good sign for you to buy in town with such activities, why? you are almost sure that your invest will not depreciate as it takes long time to do reconstruction that buiding a new houses. So, the market may have lots of people waiting to move in town with new home, whereas, builder can do one here, one there, NOT, say dozens new houses in town.

So, if you compare such house with new construction in OTHER town, say, lots of new homes not moving, you know your value preserved. However, if you simply compare the home with the new home in town, I believe it is hard to find (otherwise, builders would not venture the risk to renovate old homes), so price wise, you should also get advantage as some experts pointed out here.

Structure wise, it really depends on your own age. e.g. I have found I love some OLD style houses I saw, say, 26 Quail Run at Warren instead of newly built homes like 10 Spruce Ln http://cnj.craigslist.org/rfs/544027822.html which is newer style. Newer home seem to constructed by younger mind, but older people seemed to like, say, smaller room, not two story family home which may eat up lots of heat in winter, especially energy cost high ...etc.

Basement wise, I never use my basement for my current house, so my next house, with or without basement may not matter, and this house I saw did not have basement altogether http://cnj.craigslist.org/rfs/544027822.html and surprisingly sold fast. I used my basement as storage mostly. Some people like to make basement as another bedroom or family room ...etc, but it is NO good to be in basement, according to Chinese Feng Suei.

And, basement costs money, especially, heigh ceiling basement, some realtors tried to tell me they put two or three more courses of building blocks to make it high, but I know that all add up the price, and of course property tax that will cost me one time and in the long run for something I am not going to use often any way.

This weekend, I went to an open house at 14 Schneider Ln, Montville NJ of about $800k house, it is an old house, an added up and expanded bi-level, I was so impressed with this house. It follows many Chinese Feng Suei principals, no wonder I saw 7 to 8 cars outside the open house while we were there. As bilevel structure, it did not have basement, but the add on has, but small just good enough to store items and furnance, heaters ...etc. I found great.

One way, they coped with the "smaller size rooms" is make more open doors, and every bedroom seem to have door to a bath, so for a bedroom now has own bath, it seems the size is fine. Besides, I saw it has a great value if all my kids left, I can rent out some "suites" to others to make some extra income, yet not that lonely, just like my mom's house in CA. New houses seem not to have such option.

So, now you know why they claim 18 millions of American families may have problem with subprime, which I do not believe, just politician tries to make money for business, like Y2K, when American IT industry made a great fortune with such "scary yet fake story".

For example, one typical argument is that mortgage payment may go up $300 to $500 more, but I do know the home owner can always rent out a room to, say, student or single, for that money easily by going to Craigslist.org to put a free ads. For the Montville house I mentioned above, I counted with this5br 4hba house, I can easily rented out to 5 students or singles, and each paid me just $800, knowing apt in the area cost over $1,600, I could even live there free.

For the resale value, LOCATION is the most important, as most, if not all, real estate experts will say, LOCATION, LOCATION, LOCATION is the most important factor. From your question, I already can tell, Metuchen NJ is booming and will continue to be. And booming area, people moved in for the convenience of town such as walk to train station, school, library...etc. So, a huge basement is not as important as, say, in PA or rural area like Tewksbury NJ where you are at the middle of nowhere, you need to have your own library, game room, ...etc.

I know people living at Margate of Edison, across street to wonderful two story of Barnes and Noble, why would they need a huge library at home? They even seldome cook as there were many nice restaurants there and wonderful food court ...etc.

As to resale value, my mom eventually sold her "practical house" at very good price, tons of buyers lined up wanted to buy, it is old with many small rooms that can seperated in and out to front or backyard. Why? it can walk to Pasadena City College and near top university Cal Tech.

But when you have "good location" normally implies good school, good library, good services ...etc
0 votes Thank Flag Link Mon Feb 4, 2008
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