Want to buy new (un-built) home but fear it will be worth less by the time it's built in April, 2008?

Asked by concerned for buyers!!!, Fresno, CA Mon Oct 15, 2007

What should I do to protect myself from losing money?

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Chuck Connol…, , Bingham Farms, MI
Sat Aug 23, 2008
Many people have this fear. It is not something that they should worry about.
One day the road to our office was under construction, and I vented my frustration to my wise millionaire boss. I told him I was going to call road commission and give them a piece of my mind. He said this,
"Don't worry about things that you can't do anything about."
It fits a lot of situations. What if you were building your new home that "was " going to be worth more by the time it was done, & you developed cancer before it finished?
Would you not buy a new home since you might get cancer?
Life is short. .....Make the best deal you can,..... stick with it, ....live there and enjoy the process,.... have fun with your family and new neighbors..

Chuck Connolly
Real Estate Pro Clarkston Michigan
Web Reference:  http://www.srj.com
0 votes
Nathan, Home Buyer, Fresno, CA
Tue Apr 29, 2008
“Congress, the Bush administration and regulators have urged lenders to renegotiate terms for borrowers so they can stay in their homes, easing the glut of empty houses. Such efforts may mask the slump’s extent by delaying foreclosures, RealtyTrac CEO James Saccacio said in the statement.”

“‘This country needs a cleansing,’ said billionaire real estate investor Sam Zell. ‘We need to clean out all those people who never should have bought in the first place, and not give them sympathy.’”

“Government attempts to slow the flood of defaults ‘could be simply deferring another flood of foreclosures,’ Saccacio said in the statement. ‘That could extend the length of time it takes the market to recover from this downward cycle.’”

“The subprime borrowing spree featured lax lending standards that allowed people to buy homes with little or no down payment, and many of those borrowers today have no incentive to pay off mortgages that are worth more than the homes they bought, Zell said.”

“‘That whole process has to be liquidated,’ Zell said.”
0 votes
Jim Walker, Agent, Carmichael, CA
Sat Oct 20, 2007
Chad, If you don't go through with that new home purchase, and then decide to go back out and shop for a new house in a year a two, remember that if you bring your real estate agent with you on the first tour of the builders subdivision, your Realtor can represent you on a new home purchase from a builder in much the same way that they can represent you when you buy or sell a used home.
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ian cockburn, Agent, New Orleans, LA
Tue Oct 16, 2007
You need to clearly define what and where the house is....establish the actual built cost if built in a week, and what would / could it sell for...then start looking forward.

Look on my website under investor secrets, and also the project management portion...this will help you since the best way to protect yourself is to reduce and / or manage your risk. Do this by managing your scope of work, costs and the cost to borrow money to build.

Reduce your fears of loss by translating facts into numbers
Web Reference:  http://iansellsnola.com/
0 votes
Richard M. J…, , Sherman Oaks, CA
Tue Oct 16, 2007
Hi Chad, keep in mind everything is negotiable. This would depend on your local market. Also, you can ask the builder to reduce the value of the home to market value at the time of closing. Win/Win for all.
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John Sacktig, Agent, New Jersey, NJ
Mon Oct 15, 2007
Tough one Chad. There are no guarantees, we all know that. the best you can do is get your information.

What are houses in the area selling for, established homes, other new construction, and condo''s too. Is the area over developed? are there resales on the new construction already?

Are you getting a lot of upgrades? Get what you can from the builder and do not be stingy on your upgrades.. take the granite and tiles.. please.. get the better tiles in the bathrooms... this will all help later in life, trustme .. get these from the builder.. tell them you'll walk if they don't give you the granite in the bathrooms....make the best deal you can and then compare it to what is going on in the area. If you are happy, then go for it.. It is all you can do. Be realistic and buy where you are going to live without overpaying, if the area is good and you took the right packages with the house, time has always told us that real estate is the best investment. But as with any investment, do your research first.

John Sacktig
Broker / Sales Associate
Coldwell Banker Residential Brokerage
Web Reference:  http://www.johnsacktig.com
0 votes
Perry Hender…, Agent, Austin, TX
Mon Oct 15, 2007
You didn;t explain your fear well. Is the market dropping? Or are you building a house of your dreams... ? Many houses of dreams won't be worth what you pay for it. If you want to build for an investment, you have to build to the comps in the area.
0 votes
Infinity Rea…, , Saratoga, CA
Mon Oct 15, 2007
Your concern is legitimate with builders selling at prices today, then slashing prices by the time the property is built. If you plan on staying in this house for years to come it might not be much of a concern. Most losses if any should recover the longer you intend to occupy the proprty. Your best bet is to get a realtor to help you in the buying process even in new development. Most builders will work with your realtor and they can hammer out a deal.
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