Home Buying in Hanover>Question Details

Kari, Home Buyer in 21157

Is it better to buy in the earlier phases or the later phases of a housing development?

Asked by Kari, 21157 Fri Jul 10, 2009

There is a new housing development being built and so far there have been approximately 15 of about 100 houses that have been built on this land. I am concerned about resale value - is it better to buy in the earlier phases or the later phases?

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There are so many factors involved and the stage of the development is just one of them. It is such a good time to buy right now that choice, interest rates, and price may have more importance than the stage of the particular community. (if you are a first time buyer you should get cracking to take advantage of the 8K tax credit that is scheduled to end in November)


A few of the hings that work against a new community:
-lots of dust and some construction noise
-uncertainty about how the development will "develop" (will the same builder complete it, what quality would a new builder bring in and how would that effect your value)
-appraisals sometimes don't come in as high as expected if homes are more expensive than surrounding area



Some of the positives about buying in a new community:
-choice of home sites
-often introductory pricing
-you can get the know the neighbors a few at a time
-you might get more personal attention from the builder and marketing people

If you are looking at homes near Hanover and have not selected your agent yet, I would like to introduce you to a new community north of Hanover, but still within an easy drive. (nice homes starting around $200,000 by a really good builder)

Eileen@gatewayrealtyinc.com
1 vote Thank Flag Link Sat Jul 11, 2009
Sharon has it absolutely right when it comes to buyer agency. Don't think that you will get a better deal if you work directly with the builder. Working directly with the builder or even with their marketing people may mean that you are going to be on your own to police the process. This seems to be less the case with the best local builders, but is always true to some extent.

This is ESPECIALLY true if you are considering a home that will be built with one of the larger regional or national firms. I did a study some time ago and found that in one such community people who had bought direct had paid SIGNIFICANTLY more than folks who used their own agent.

Good luck with your home buying process!

Eileen@gatewayrealtyinc.com
0 votes Thank Flag Link Sat Jul 11, 2009
I have purchased two new homes in new housing developements. In the 1982 I purchase my first home in Montgomery county, PA. We were the 20th home built in a development of about 200 homes that took two years to complete. By the end of construction our same model was selling for 15,000 more than what we had contracted. I might add that interest rates were 19% and our builder had a buydown wiith a lender and we got our first mortagage for 13% and were delighted. In 1987 we purchased a new home in a development in Langhorne, PA. We were the 15 house built in a developement of over 200 homes and by the time we went to settlement 6 months later our model was $ 48,000 higher. We could not have bought in that area if we had waited as it would have been price prohibited. We would later sell this house three years later for double what we had paid. I will say that builders will typically hold back premium lots in the later stages ( as a means to achieve higher prices on the same models later in the project. So based on my experience , it sometimes pays to buy earlier than later.
I will point out that we are in different times, you must have confidence in the builder, does he have the financial stability to operate in this current housing downturn and finish the 100 home tract? Is this a large national, regional or local builder? It can make a difference. If I were to do it over in this market, I would probably wait until at least 50% of the project is completed. A good local Realtor should provide you with the guidance to ask the necessary questions. Good luck. This is a great time to buy a home.
0 votes Thank Flag Link Sat Jul 11, 2009
Kari,

It depends also on what your goals are. In other words, how long do yoiu think you are going to stay there? I would ask the builder how long they have been building at that site. If they are only selling 1 house every 3 months then I wouldn't hop in. However, if they are building 2 per month then that puts them there for about 3 more years. (In this market that is pretty good). Now if your long term goal is to stay there 7 years, then yes buy now. But if you are only thinking of staying 3 years, I would stay away.

Sean LaSalle
Weichert Realtors
Web Reference: http://www.seanlasalle.com
0 votes Thank Flag Link Sat Jul 11, 2009
Great question Kari,
I have to ditto what Eileen has said. She brought some some great points.
My advise on top of this is to find a great buyers agent and set some time to review the buying process and the pro and cons of each development. Then are careful consideration go ahead and take your agent and go visit the developments. Talk with the builder and or salesperson to see what they can offer. Tour some model homes.
It is a good idea to make notes and ask as many questions as you can. Also visit more then one development to compare notes and make sure you are getting the best bang for your buck.
I strongly suggest a buyers agent for several reasons. First they can negotiate with you for the very best deal. They will keep in touch with he builder and make sure things are on track. An agent will be mindful comment dates and keep on reminding the builder of such dates. If problems start occurring the agent is there to battle for you. And best of all the builder is under contract with you, the Realtor and himself. It is not just you against the builder if things sour. Just a few words of advice. also the buyers agent is paid by the seller not you. Free advice!!!! Best of luck..Sharon Harris 717 465 0661
0 votes Thank Flag Link Sat Jul 11, 2009
Kari,

Based upon my own personal experience, I often advise my buyers that it is best to buy into a new development once it is 50% sold for a plethora of reasons which I abstain from sharing in this forum.

If you would like to discuss further, please do not hesitate to contact me direct.

Love and Peace,
Francesca, Realtor, ePro
732.606.2931
Web Reference: http://www.PatrizioRE.com
0 votes Thank Flag Link Fri Jul 10, 2009
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