I know, the title of today’s blog; “these 5 things to know about buying new construction in Tooele County” are pretty similar to yesterdays post. But that’s where the similarity ends.
This post written by Jennifer Lyons Freelance writer , Seattle that appeared on the Zillow website is enough different that it needs to be read.
The post addresses five issues you might deal with if you are thinking of buying a new home or condominium in the county.
Jennifer talks about:
- Finding New Houses To Buy Not Listed On The MLS:
- Buying Pre Builts (spec homes)
- First Buyer In Has An Advantage:
- Builder Has No Attachment, What Does That Mean:
- Upgrades Are Best Discounts:
Here is her article with my remarks….. ENJOY
Imagine being the very first person to live in your new home.
Any buyer shopping for a home today, in any market and at any price point, is likely to come across new construction homes for sale. The sellers are both large national builders and smaller local developers. Some homes are for sale as a part of a subdivision, while others are one-of homes.
But is a new-construction home the right path for you? Here are five factors you should keep in mind.
What I Have Added:
In order to determine whether you might prefer a new home as opposed to a resale you should be able to compare the differences. At least on paper.
Here are lists of all homes listed by city in Tooele County. Scroll down and see what your $$$$ will buy before you commit to new construction.
- Listings in Tooele City
- Homes in Grantsville UT
- Stansbury Park Homes For Sale
- Erda Utah Listed Homes
- All Homes For Sale in Lake Point UT
New homes may not be listed in your local MLS
Unlike a regular seller who lists their home with a local real estate agent, homebuilders often have their own sales employees working for them on site. They do this to have more control and to cut costs.
What does this mean for buyers? Mostly, it may mean the homebuilder isn’t a member of the local MLS. As a result, the homes may not show up in your agent’s MLS search.
The builder may be more apt to advertise online, in the paper or with billboards. So if you’re interested in newly built homes, work with your agent to make sure you’ve identified all the possibilities.
My Comments: I need to say a few things here.
First,You need, representation. You need your own agent representing you. The agent that is watching the model and answering questions about the builder, available lots & floor plans and pricing, is employed by the builder. They make sure that their “boss” gets the best deal. You need someone committed to seeing you get the best deal. The way you do that is to hire an outside agent. Someone to watch your back..It’s FREE! Generally.
Most builders encourage you working with an agent and have figured the selling fee into the price, so that they are paying for you to have experienced council. You can read more about this on my Tooele blog buying new homes.
Home builders working with outside agents is cyclical. Usually the number of participating builders goes way up when buyers are plentiful and heads in the other direction when customers are scarce. Make sure that your agent knows if the seller of your new home cooperates or not.
In Tooele County most home builders cooperate with local agents and welcome professional representation.
New homes are often sold before they’re built
A builder will generally get financing lined up, and map out both a construction and a sales process. This means they’ll try to sell as many homes as possible, before they’re even built.
To accomplish this, they’ll build out model homes and allow buyers to go in and review floor plans, fixtures and finishes while the homes are under construction. Depending on the state, builders need to get through some of the approvals process before they can actually start signing contracts.
For the most part, you can get a sense of what your new home would look and feel like, and where it will be located in the community. Ready to move forward? You’ll likely have to put down a deposit, from a few thousand dollars to 10 percent of the purchase price.
Be aware that even if there are 100 homes in the community, they won’t all be available at once. Home builders tend to release the homes in phases. If the first five homes sell quickly at the asking price, and the market continues to do well, the builder can raise the prices on the second or third phase.
Also, the sales cycle for a new community can take years. The last phase could end up being priced 10 percent or more than the first, simply because the real estate market has appreciated.
This is What I I Know: It’s true that the most concessions can be gained early on in the life of a new subdivision. But…. make sure that those gains are sufficient to offset the inconvenience of heavy construction traffic and the dust or mud that you will be exposed to over the life of the development. When possible select a lot that is not likely along the path of service and construction vehicles.
The first buyers may get the best discounts
A home builder, especially early in the sales process, wants to get a few homes under contract quickly. If the builder can announce they have 10 homes under contract in a few months, the project can seem more desirable to future buyers.
Also, builders like to go back to their lenders with positive news about the project and their investment. To do this, they need early buyers to sign contracts.
For buyers, this means that early in the sales process there could be room to negotiate the price down. But with the reward, there is potential risk. By being an early buyer, you’re committed to the project. If for some reason sales don’t manifest, or you don’t want to move ahead before the home is built, you risk losing your down payment. For example, right after the previous housing downturn, some buyers were stuck under contract on new homes where sales had stalled.
My comments Here: Working with an experienced agent here is pretty important. A good local full time agent should know the developer and probably set in many planning commission meetings as plans and schedules were reviewed. They will advise on the feasibility & long term plans so that you may weight the probable time for sellout.
In a subdivision where a developer sells lots to a number of builders look into the reputation of the developer, the builder you are working with as well as their lender to find a performance history of all.
If you are buying in a single builder project, have your agent look into the track record of the builder.
Make sure all of the amenities are scheduled (with completion dates). Plus, if possible, visit previous development to determine how well the property values held up and any common areas were maintained.
If the property in Tooele is a condominium, then a complete review of the controlling documents are in order. A professional full time local agent should help with that.
Builders don’t have a personal attachment to the home
A typical seller has lived in their home for many years, and raised their family or built memories there. So when it’s time to sell, the seller may experience all kinds of issues, questions and uncertainties, which can come out in the negotiation and purchase process.
The seller may unconsciously price the home too high because they’re not ready to emotionally detach from it. They may want to know more about you, or what your plans are for the property. If given a choice between two buyers, the seller may pick one over the other for non-financial reasons.
With a home builder, it’s just a numbers game. They’re focused more on spreadsheets than sentiment. They want to make sure you’re qualified and can get a loan. They set the prices based on their inventory, though there may be a little room for negotiations.
My Tips on This: The cover letter accompanying the offer that I hear is so persuasive in influencing sellers in the re sale market is of no value here. Builders are NOT attached to their inventory. In fact, I have worked with many builders on many projects where the owner never set foot on the property and only knew what was seen on plat maps and house plans.
The fact that you would keep up the home after you purchased it is not a compelling reason to shave even a nickel from the asking price.
Discounts may be available in the form of upgrades
Is the project you’re interested in nearing the end of its sales cycle, with many homes already sold? If so, the builder may be a little more willing to negotiate with you — not so much on price, but on upgrades. If they reduce the price on your home and the sale closes, then that sale price becomes public record. But if they offered you an upgrade package (hardwood floors instead of carpet, or higher-end appliances), there isn’t any way to track that.
What could amount to thousands of dollars in upgrades could end up being a better deal than simply getting a price reduction.
My Comments: This is an important concept for you buyers that are looking for value.Think about it. Do you want to bet your appreciation dollar on a builder that will reduce the price of a new home EXACTLY LIKE the one you just bought? I think not. That contractor would be devaluing his/her total inventory. (as well as yours).
It would take a much longer time for your investment to approach your goals.
Be grateful for an owner that stands fast with price integrity.
For many, no matter; move up, first-time buyers, investors, or scaling back, new construction could be a great idea. I hope this info is helpful.
Throughout this post I mentioned working with a full time local real estate agent. Unless you have someone now, I’d like to apply for the job. That’s the point of me researching writing and sharing these bits of Tooele real estate information. I want you to know what I know and come to believe that I will be an invaluable resource when looking at buying a new construction home in Tooele County Utah.
If you would like to talk, give me a call. Berna Sloan 435-840-5029. I can help.
Believe me, there are more than 5 things to know about buying new construction in Tooele County.
- 5 Common Misconceptions About Real Estate
- Going Solo: Buying a Home on Your Own
- 5 Steps to Ease Home-Buying Anxiety