Home Buying in Keller>Question Details

kris, Home Buyer in Keller, TX

Premium for lots

Asked by kris, Keller, TX Tue May 27, 2008

Hello,
We are looking at various lots and the one thing that we noticed is that the builders include a premium for various lots (almost, every lot we have seen). If the size of the lot is more, a higher premium is attached. If it is on a corner or cul-de-sac lot, a higher premium is attached.

My question is:

Is it a common practice that builders charge a premium for every lot? Is there a uniform guideline that all builders follow for charging the premium? What are the maximum limits that they can charge for the premium? For a semi cul-de-sac corner lot, we are told the premium is $10,000. The difference in square feet from a regular lot and this lot is around 1000sq.ft. The regular lot has a premium, i think $6K.

Thanks

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BEST ANSWER
It is common for builders to charge lot premiums. I've seen anywhere from $5000 to over $100,000 depending on where the community is and the lot features. There are a couple of reasons behind lot premiums. One is size another is location. People will pay more for golf course view, lake view, on the waterfront, etc. Price can be negotiable. If I remember correctly I've even had the entire premium waived in some instances. Always use a realtor when working with a builder and always get an inspection. If you build from the ground up get a phase inspection. Do your best to take the realtor the first time you visit the builder. Every day we see questions posted about things that have gone wrong during the building process. For a list of see my website under new homes. One issue now is bankruptcy. Several builders have gone under 1/2 way through the process here in the DFW area.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Tue May 27, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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It is typical for builders to charge for premium lots. Larger lots, view, lake or ocean usually always carry a premium. Long term they usually will pay off as well. The value is in the land and not the house.
Web Reference: http://GetPrequalified.com
0 votes Thank Flag Link Tue Jun 10, 2008
It is pretty common for builders to put a premium on a lot. I have worked for a few new home builders and they all did it.
It is real estate so you can try to negotiate if you like.
Jeff
0 votes Thank Flag Link Tue Jun 10, 2008
Bruce pretty much covered your question. One thing you might consider is, builders offer Realtors incentives for selling lots, and homes which you most likely would not be aware of if dealing directly with them. We contracted a builder home for a client last week, and provided 2% of the sale price to our buyers closing costs, since they offered us a larger commission.
Web Reference: http://www.bigdrelo.com
0 votes Thank Flag Link Wed May 28, 2008
Do you have a realtor? RULE of thumb never purchase a home direct from a builder, listing agent, or seller UNLESS you have your own realtor that represents you. Based on location of the lot the answer is YES.... number of reasons that play into that factor

I am familiar with a GREAT home in Keller fairly new construction $94K below market value move in condition, with pool close to Southlake approx. .5 miles. is the high $400K

Builders and their agents are nice people however you are in a disadvantage without an agent that can work with pricing and negotiations.... We answer so many emails and calls a day when things have gone wrong when a buyer did not have an agent who worked on their behalf.

Contact my office if we can assist. 972-699-9111

http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue May 27, 2008
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