Please read my blog that I linked to where I give reasons why a new home might be the best value- facts are our new homes are giving more quality. it's not always about price. It's also about the "right home" too and that goes with floor plan and quality. Sure you can get a deal on some resales, not all. You can't just say a resale home is better priced and ignore the quality features or the premium lot, etc. We're seeing people look at resales, even offer on them, and then come back and buy a new home even if it's a higher price.
I'm happy that you are seeing new construction home sales selling briskly. Actually material prices are higher than they were just a few years ago. Commodity prices on building materials generally trend higher with nominal inflation. It's a misconception among consumers that building material prices are lower because we are in a recession. Now on the labor side, you certainly can achieve some savings.
Still at the end of the day, the empirical evidence is that existing home sales continue to outpace new housing starts for the reasons I stated. Again, we are construction & development company as well as a brokerage so we are on both sides of the equation with no agenda. I'd love to see new custom home construction ramp up again and catch up with existing home sales but when that's hard to do when people sell their existing homes at prices lower than current replacement cost.
I am happy for you but the facts remain the same and we have a bunch of existing homes to sell in VA before new construction gets back to some state of normalcy. Good luck Mark.
That's not the case in our area. New homes results are up for a reason. We've had 24 new homesales transactions in our Harbour View community at The Riverfront since last May ($360,000 to over $2 million) and 30 new home sales transactions at our Founders Pointe community in the last 18 months. It's not always about price, as the new homes we're building offers more QUALITY and value than many of the resale homes. Our builders are including more in a new home than they were five years ago.
Homebuyers have been paying more attention in recent months in finding not only the "right price", but what's equally important is finding the "right home" and the right neighborhood. Buying a new home is a way to make sure you achieve your dream home and it's never been a better time to purchase a new home. Pricing of materials and labor are very attractive today than a few years ago and we're seeing it reflected in many pre-sold homes. People also want to take advantage of the lower interest rates.
People should compare their options with a new home before they purchase as they'll be pleasantly surprised in what they can accomplish.
Picking a custom home builder is a lot like picking a realtorÂ®; you should interview several builders before making a decision. Do not solely rely on a referral from an agent! Do the work yourself and interview several. Hereâ€™s a short check list of questions to ask:
1) Ask for current client referrals, 3 should be no problem & follow up with each regarding quality of the home and how well the builder did in regard to warranty work after the sale.
2) Ask if the builder is willing to do a cost plus contract this will save you money if the builder is ethical and doesnâ€™t try to steal.
3) If you are obtaining financing ask about construction perm loans, these are one time closing loans and usually save the customer about 2,000 and may also have a tax benefit for you. It also allows you to see all the bills and control all the money.
4) Talk with the builders bank make sure the builder has the resources to complete the project
5) Run a background check on the builder check for current & pending lawsuits
6) Ask for a copy of the builders credit report (personal or company) also ask for a copy of your realtorsÂ® credit report before you hire them. This may sound bold but you would be surprised how many are below 600, and then ask yourself do you really want to accept consul on one of the biggest decisions of your life from someone who canâ€™t manage their own financial future?
7) Check with the local home builders association for a list of builders in the area
8) Energy cost are going up and the trend will continue pick an Energy Star home builder and have the home certified as an energy star home this will save you money over the long term, add quality to your home and help the resale down the road. For an energy star home expect to add 2-3% to the price of the home.
9) Ask to see a written copy of the home builders warranty program.
10) CONTRACTS- usually not a big deal and all 3 types work well the question is getting the best deal for you. The 3 types are: RealtorÂ® provided (these protect the interest of the agents & brokers), builder provided (these protect the interest of the builder and usually provide more detail in regard to dispute resolution) home owner provided (these are drawn up by your attorney and favor you in the event a dispute arises) many times a builder will want to use their contracts, itâ€™s usually fine just make sure your real estate attorney reviews the document before you sign.
Thatâ€™s your top ten list! Good Luck!
It's never been a better time to purchase a new home also because the price adjustment has been made. Builders are also offering $10,000 in Closing Costs on five of the Eagle Harbor new homes (starting in the mid $300's). http://www.eagleharborva.com/our-homes/homes-for-sale/
Mark Edwards, East West Realty
A resale home may not have the quality appointments that you can get in a new design build situation. It all depends on your area and the builder that you select of course. (Our communities are Founders Pointe, The Riverfront at Harbour View, Graystone at Eagle Harbor, and Liberty Ridge in Williamsburg.)
With any business budget, plan for 10-15% contingency just in case things come up. So if your home costs $500k, make sure that you are able to afford an additional $50-75k just in case.
one more question that i have is on the financing of the home. the agent from the companies have told me that the construction company will take on the loan and that they will require a 10% down payment and that we will pay for the house at the end with a traditional mortgage. But what does it mean to have the interest of the loan "built into the price of the home"?
1. You have to first select the appropriate LOT to build the home. Make sure you seek someone that specializes in custom home lots. You want to always buy the lot and design the home with selling in mind at all times. From the size of the lot, location, view and available utilities. It can help to buy a lot in a good location that is already in a recorded subdivision, hence less of a worry about available utilities.
2. The DESIGN of the home should try to capture all the features you want, but also capture the benefits of the surrounding elements, view etc. As to Ellen's point, you don't want the interior design to be too individualized or it could hurt your sale down the road.
As far as pros and cons...I think it is a very individual thing for anyone that takes it on. It can be extremely rewarding in the sense you can do everything you want and choose each and every feature you want. Make sure you have a budget and pad the budget! You can, if done right and you know the right people, save a lot of money doing a custom home. It can also be time consuming when it comes to picking out fixtures to door knobs to door casing and moulding, when there are hundreds to choose from. (Go look at other custom homes on the market or open houses with an Agent friend) There is so much more that can be said, I hope this helps.