Home Selling in 92505>Question Details

Chrisl, Home Buyer in 92505

I am very interested in a new home but developer is asking $182 per square foot. How can I judge if this figure is reasonable.?

Asked by Chrisl, 92505 Mon May 28, 2012

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16
Find a strong buyer's agent in the area that can do a market analysis of the new home and compare it to others that have recently sold. Almost all builders will work with your buyer's agent. You receive the expertise of an agent that is not biased toward the new home and the builder pays the agent should you decide to buy their home. Often, agents may be able to negotiate on the home in terms of price or terms as well.

New homes can be an excellent option in some circumstances. There should be almost zero maintenance for the first few years and you can often choose the options to your own liking. You will pay a premium over a resale home in terms of $/sf.

Two major things to take into account are the tax rate of the new home (including Mello Roos) and the cost you will need to pay to landscape the sides and rear of the home to your liking, if any.
1 vote Thank Flag Link Mon May 28, 2012
All you have to do is ask an agent, like me, to do a comparative market analysis on the specific property you are interested in and you will have a good idea of what houses are going for in your neighborhood.
1 vote Thank Flag Link Mon May 28, 2012
If you are not working with an agent, I suggest you should contact Ray Wright to help you maneuver the real estate market in your area.

Have an amazing day!
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Wed May 30, 2012
Hi Folks, thanks for all of your answers which I greatly appreciate. Noticed in today's news that home prices have fallen to their lowest rate since 2002. That's scary. I think I might wait a bit. For those that don't know, and a personal opinion only, there are 3 different developers at Riverside Vista. The two offering larger homes (Sagebrush and Topaz Ridge) seem to be reasonably fair prices, if a little optimistic bearing the depressed property market in California in general, and Riverside in particular. The third developer (Suncrest) seems to be completely out of touch with reality. Unfortunately I'm in the market for their size of home (under 1750 sq.ft.). Wanted new but will probably settle for a nice "used" home which many of you recommend.
Again thanks to all of you for your input. It helped me make the right decision.
0 votes Thank Flag Link Wed May 30, 2012
usually the smaller the home the higher the cost per sq ft
Flag Fri Jun 1, 2012
I assume you mean the Riverwalk Vista development. That's the same development I referred to in my previous answer and it sounds like you came up with the same reason why my buyers declined that development as well.

Ray Wright
Keller Williams Realty
951-354-1303
RayWright@kw.com
0 votes Thank Flag Link Wed May 30, 2012
Hi Chris, I'm not sure if this is the answer you are looking for but here is my thought. I will qualify this by saying I spent 25 years working in the building industry as a New Home Sales Counselor. Sticks, bricks and dirt are expensive. It does cost more to build new than to buy resale. New homes, like new cars, always sell for more. Because they are new and every component is new. . Even a home that is 5 years old will not have the same quality HVAC system, for example. Another is earthquake preparedness and stresses. New homes are designed to be safer and have better quality products from the roofing materials to the concrete for the footings. They also have to pay current governmental fees which in Riverside are tens of thousands of dollars per house. Another factor for a new home is the warranty. Most homes have 10 year warranties on the structure of the home. Buy the new home if you like it.
0 votes Thank Flag Link Wed May 30, 2012
Price per square foot what does this include? Worst question in real estate because there is no standard for this imaginary number! Does it include the lot? Real estate fees? Developer fees? City permit fees? City and EPA impact fees? Bank fees? HOA fees? Builder profit? Let me break it down for my area of the country on a 1500 sq ft ranch: labor and materials mid range 80-100 per sq ft, city fees 5 per sq ft, impact fees 2 per sq ft, bank fees 2 per sq ft, developer fees 2 per sq ft, real estate fees 14 per sq ft, HOA fees 1 per sq ft, builder profit 20 per sq ft , lot 30 per sq ft. see where this goes! Then consider a walkout lot with a finished area does this affect cost per sq ft what about a finished basement non walk out does this count? If these count then the cost per sq ft drops a ton vs a ranch. Things to consider Good Luck!
0 votes Thank Flag Link Tue May 29, 2012
I can't think of any 1500sq.ft. home in the I.E. going for $275k. Smaller homes will generally be price inefficient, but this is taking things to another level. Also, if you have a family or are concerned about selling to a family in the future, Alvord school district is not particularly well-regarded. Not sure if you needed to be that close to the 91fwy...both Canyon Crest and Orangecrest will have
0 votes Thank Flag Link Mon May 28, 2012
Thanks folks for all of your input --- I really appreciate it. Reading my original question I realize I did not give some essential info. The home is in the Riverside Vista development on La Sierra, Riverside. It is a 1514 square feet, tiny yard (which for our use is an advantage), 3 beds, 2 + baths, nice plot location, lovely development. The home has absolutely no upgrades. The larger homes in the same development range from $119 to $130 per square foot. I've not found any new home development anywhere in the Riverside area that even comes close to this price. Hate to give up on it as I love the home, but I guess I'll have to find a good realtor and look elsewher.

Again thanks folks. Regards, Chris L
0 votes Thank Flag Link Mon May 28, 2012
Pay an experienced RE pro to do a CMA for you. That should answer your question. Frankly as a builder and developer myself I don't see anything too unusual about that sq. ft. cost. I've charged a lot more.
0 votes Thank Flag Link Mon May 28, 2012
Connect with an area experienced Realtor who can provide you with information about other similar recent new constructions that have sold and in upgrades and size compare to these, and then you
have a better idea... That Realtor also then can be helpful in showing you other properties similar to
the one you are referring to, and you may even want to consider then not a brand new construction but
one that is may 5 or so years old, which may work well for you too.

A local Realtor has access to a lot of property information and can also show you properties that
in your price range may even work out better for you or at least will give you the feeling that the price
is ok..... Remember also that with developers sometimes if you still can make changes the price
may go up because you want hardwood flooring instead of carpeting etc.

It would be a good recommendation for YOU to work with a Buyers Agent who represents YOU in
the negotiations of the sale contract with the developers office.
EdithSellsHomes@gmail.com
YourRealtor4Life! Working always in the very BEST interest of her clients, Buyers, Sellers and investors alike. Covering for @Properties the city of Chicago, all N and NW suburbs of N. Illinois, and the fine homes of the North Shore and with my partner agents I cover all states of the US and properties worldwide.

Good Luck to you.....and have a wonderful Day
0 votes Thank Flag Link Mon May 28, 2012
It depends on the upgrades and options. Some start out very stripped down and others are fully loaded, like buying a car, do you want a cheap Chevy or an Escalade. Remember that you will need back yard landscaping etc. I f you want lots of upgrades you might look at newer resales. Definitely get an agent that is trained to negotiate the best possible deal for you. If the agent takes you to register with the builders, they will pay the agent commission. It is a buyers market in new homes so take full advantage.
0 votes Thank Flag Link Mon May 28, 2012
Price per square foot has relatively very little to do with the real value of a home. Insurance companies use this measurement for determining the replacement cost of the structure in the event of fire or other descructive event and appraisers may use it as PART of their alternative method for supporting a value opinion, but there are other factors that are vastly more important when determing value.
I'm sure you've heard it a million times - the most important component of real estate value is location. That's why developers charge different prices for homes in the same development with the same exact floor plan and same square footage.
When I lived in San Diego, my good friend bought a home in a new subdivision in the Del Mar Highlands section of San Diego. There were 10 or 12 homes being built in the exact model he wanted, with a few of the homes priced more than twice the price of the others. A visit to the site showed why - the highly priced homes had a perfect, unobstructable view of the ocean. From the back patio you could see the full sunset every evening at Torrey Pines State Beach. He paid twice the price and bought a home with the view. Five years later when he sold and moved out of state, the San Diego housing market was at its lowest value in years. But he sold the home for about $300,000 more than he paid for it.
Moral of the story: Consider the location as the primary component of value.
0 votes Thank Flag Link Mon May 28, 2012
Ouch! Are you working with a Realtor? Many times, buyers think a Realtor cannot assist them when purchasing a new home and opt to deal directly with the builder and the builder's lender. This is not always the best for the buyer. If you have a Realtor, he or she can run the numbers and let you know what the average cost per square footage is on comparable homes and make sure you get the best financing.

I have clients I'm working with that were looking to buy a newer home. We looked throughout lake Hills and Dos Lagos. They expressed an interest in looking at the new homes in the new Riverwalk development. There are several new homes being built, however as soon as I took them there to look, they changed their minds.

Typically, newly built homes are more expensive. Even with the upgrades and the incentives the builder was offering, the purchase just didn't make financial sense to my clients. They purchased a home in Dos Lagos that is only a few years old and already has numerous upgrades and finished landscaping. And for quite a bit lower than the brand new homes.

If you're not working with a Realtor, I suggest you get one right away. The FIRST and foremost step in purchasing a home is to get with a Realtor. Check with friends and family to see if they can refer someone to you or research sites, such as this one to find a good professional Realtor. Your SECOND step is to get pre-qualified for a loan. AFTER you find a Realtor, he or she will have you meet with the lender that he or she uses regularly. This is important. Please let me know if I can help or if you have any more questions.

Good luck!

Ray Wright
Keller Williams Realty
951-354-1303
RayWright@kw.com
0 votes Thank Flag Link Mon May 28, 2012
I agree with John...We just bought our home last year here in Woodcrest and it's a custom home over 4100sq ft and we paid about half of what he's offering...I'm also a realtor here in the area and believe me that is way to high for that area!

http://www.inlandempirecahomefinder.com/
0 votes Thank Flag Link Mon May 28, 2012
Simply compare that $/sq.ft. to recent closings in the area. Is this for a custom home? I can't imagine anything running that price in 92505.
0 votes Thank Flag Link Mon May 28, 2012
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