Home Buying in 28173>Question Details

Ca, Home Buyer in New Jersey

We are buying a new construction home and are having many upgrades. Are we supposed to get a credit for the standard items that are being replaced?

Asked by Ca, New Jersey Thu Jan 7, 2010

Is it standard to trade off for instance hardwood floors in place of the credit or the actual standard items?

Help the community by answering this question:


I worked for a builder for many years, and like everyone else said it greatly depends on the builder. Some already have a credit for the standard features built into the upgraded price however some do not. You will typically be paying a premium for an upgrade when you compare them to retail pricing but remember with the builder it is installed and if you buy at a retailer like Lowes or Home Depot you will have to pay for install anyway no to mention removal of the replaced item. It’s worth paying the upgrade price on items that are difficult to replace but items that you can replace by yourself (like a light fixture) you may want to consider dong your self. If you are a penny pincher like me :) remember to have a budget and stick with it
Web Reference: http://www.AGReedRealty.com
0 votes Thank Flag Link Wed Nov 17, 2010
Thank you all so much. The answers were very helpful.
0 votes Thank Flag Link Mon Jan 11, 2010
Dear Ca,

You will need to learn specifically how your Builder works on this one! Your sale agreement will likely specify a period of time that is to be used to make your choices and see what he offers.

An established Builder will have his or her own method of doing the figuring. Commonly, a Builder will fill out a selection sheet, an'Exhibit', or a 'Counter Offer' once he sees what you're choices are. This will let you know what the additional cost increase will be for the upgrade, and the price given will cover the gap between what comes standard on the home and how much the difference will be to provide the upgrade. However, if you are removing something from the plan, for example if you don't want a gas fireplace and one was offered as a standard ammenity, the Builder will offer to trade for an equitable item, or offer to subtract the amount from the sales price. Keep in mind that Builders get dicounts from their suppliers because they buy in quantity, so the credit back to you won't be for the full retail price that you might be expecting. You may also expect to pay a fee for a change order if you change your mind once building is under way, since changing materials and plans with the sub-contractors does incure a cost in both time and money!

The first six months of 2009, 75% of my home sales were in new construction in my small region. Then our area kind of ran out of new construction. More is being built now, which is good news for our economy. But with my sales, I've had the opportunity to work with a number of Builders, and these are the most common arrangements that I see.

Happy House Building!

Sandi Siron, Principal Broker, ePRO
ERA Universal Realty, Hermiston OR
Office: 541 567-8303 Mobile: 451 571-1221
0 votes Thank Flag Link Sun Jan 10, 2010
Ca In my area the builders charge an upgrade cost for non standard (budget) selections. This is the differance that they charge between the standard and your selection. Take a look at your costs and see if they make sense. I had clients go from plain oak cabinets in the kitchen and 3 bathrooms to raised pannel maple. It cost them about 1200.00. You could not purchase the cabinets for the kitchen for that.
Maybe a better way to put it is that the credit is already figured in and you are only paying what the builder says is your cost to go with your choice. That is the way it normally works.
Web Reference: http://www.Find1Home.com
0 votes Thank Flag Link Sun Jan 10, 2010
Hi Ca
The answer to this question can vary depending on the builder.

I work with a builder who offers a credit towards the kitchen, bathrooms, etc...he will tell you what that credit will offer (ie cherry cabibets, granite, tiled backsplash, etc).....then you go to his vendors (or you can go to your own) and select what you want.

If you choose levels above those he allowed, then you pay the difference. This way, yes, you are getting a credit for what was offered, and only paying the surcharge for higher end choices. The homes I am describing are custom...not development homes. Other examples - he gives a certain allowance for lighting, including so many recessed lights per room - if you want more than the allowance provides - you pay the difference.

Another option - my friends just moved into a new luxury condo building..they took a monetary credit for the kitchen and bathrooms, and had their own designer use that (and a lot more) to complete the interior finishes.

So - one answer doesn't necessarily fit all............that being said - .generally, no, you won't get a credit - you'll simply pay more, or the difference of the costs involved, for the upgrades.

Good luck!
Enjoy your new home......
0 votes Thank Flag Link Sun Jan 10, 2010
For the builder that I represent, and most builders in the Charlotte area, you would not get a credit. The "upgrade price" is in addition to the standard price. For example if 36" cabinets are standard 42" cabinets may be offered for an additional charge.
0 votes Thank Flag Link Sun Jan 10, 2010
Generally in new construction, materials are not ordered until there is a contract, therefore, any upgrades that you make have an additional cost to cover the materials as well as installation of those materials. The standard price of the house is what it is and additional upgrades are an additional price. Many of those things are spelled out on the builder contract that you probably signed when you contracted to have your home built. Hopefully, you used the services of a good buyers agent to education you of the proper expectations when buying new construction. Remember, that very friendly & nice sales agent that works for the builder represents the builder, not you!!!! A buyers agent helps to let you know what to expect when going with new construction.

I wish you all the best with your new home!!!
0 votes Thank Flag Link Thu Jan 7, 2010
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