Upcoming Free (& non-promotional) Home Buyer Classes:
Saturday January 9th , from 9am-12pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)
Thursday night, January 14th , from 5pm-8pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)
Saturday, January 23rd, from 11am-2pm (ish)
Vancouver YMCA, conference room
11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave)
If these class dates and/or times don’t work for you, please let us know. We understand that you have lives, and families, and work. We will work something out that works better with your schedule. Just let us know….
….we also have home seller classes available too…link on left on website
Remember…with reservation…we will throw in lunch, or dinner! 😀
…and happy new year!
Wow, 2016…didn’t we just have a new years? In real estate, I am always thinking 6-8 weeks ahead, and I think that this tends to make the year(s) go by faster…or maybe it’s just me. 🙂
This week we are going to talk a bit about new homes since I had a couple of people ask me about this. I want to thank you though first since I truly had no idea what to blog about this week! I have had a couple of you email me some questions that I am happy to go over, and it gives me some fodder for the next couple of weeks too. Whew!!
First thing you need to understand is that there are 3 values to a home…the tax appraised value (typically the lowest value & based on information at least a year old), the building value (what it would cost to rebuild your home in case of destruction), and market value (what your home is worth on the open market if you were to sell it). When the market fell, market value slipped to at, or below tax value. As the market has recovered, tax value is going up, and so has market value…by a lot. When the market was HOT, builders were hot as well, and when the market crashed…so did a lot of builders because it was a lot cheaper to buy an older home rather than have one built. Now, of course, as the market as recovered, so have many of the builders, and the numbers are close enough between the two that many people are building again. The housing inventory has also helped the builders since the inventory of homes is so low, that for many people, buying (or having built) a new home seems like an excellent alternative rather than purchasing an older one.
New Home Considerations
Some of the cons of the new homes are yard size. Due to land use laws that were passed after the market crash, builder lot sizes are a lot smaller so while you will get a bigger house, but smaller yard. You will also get a smaller garage. New homes build garages for smaller cars….not mini-vans & trucks…and some full size cars may be pretty tight.
One of the other cons are interest rates…please remember that your lender can only lock in an interest rate for 30 days (45 with some extra charges). From concept to finish it can take 4-6 months to build a home…with a lot of that time waiting for permits, and the for the county inspectors to come out and sign off on the homes stages. Actual building time goes fairly quickly. So…you won’t be looking at the interest rates of today, and if there is a interest rate jump you could be out a house since your pre-approval is based on a monthly payment…not a purchase price. Higher interest rates = higher mortgage payment. What happens if you want a new home and don’t want a 4-6 month wait?
Some builders build ‘spec homes’, and these are already finished homes that they are selling. Since the home is finished you won’t be adding anything else unless it is appliances or AC units. You will have a standard close time of 30-50 days (depending on your loan type).
Some builders list these ‘spec’ homes in framing condition. The listed price is the price for the finished product, not for the homes current condition. 🙂 Any, and all, upgrades you decide to make for the home though WILL increase the final purchase price. The wait time for closing on this home may be about 6-8 weeks…depending upon the home and the finish time needed. I have a client (hi!) doing this right now. We found a home that they really like that is only in framing stage. The home has a ton of upgrades as standard (local builder), and we were able to write in AC, 2.5% in closing costs, gas plumbing to the back patio, and a couple of other things….and they are using their own lender too. The home will be finished about early-mid February, so their interest rate can be locked in a week or so. New home without all the wait… After the crash though, not too many builders do spec homes anymore though…and with the lack of home inventory, for builders that do start the permit process for a spec home end up selling it pretty quickly before it hits the market. The market is currently looking pretty rosy for builders, and I do know of some builders right now that aren’t really giving up anything (including closing costs) because there is a demand for their homes. It’s all kind of ‘hit and miss’.
On the RMLS (remember that is THE place to go to when looking for homes…the rest of those sites are all marketing), you can see the difference by looking at the year built and the following:
New = built spec home ready to go
Undercon = home is under construction, but not finished yet. Still time (maybe) to make some changes
Proposed = Not started, usually no permits yet. Will take the full 4-6 months, but more options for you to choose.
All of these homes will be listed with a purchase price of the finished product. Just remember that some builders will be more ‘flexible’ than others in terms of price, closing costs, and other changes.
With a new home you really have no idea how the house will ‘settle’. Most people (me included) buy a new house so they don’t have to do a bunch of work on it. Sometimes this works…and sometimes it doesn’t. One of my friends lives in a home as old as mine who has had zero problems with her home, and hasn’t really had to do anything other than the regular general maintenance, while I, on the other hand, have had SO MANY problems with our home and recently saved up three years to re-do the kitchen because my cabinets were, quite literally, falling apart. Our homes are only 14-15 years old! We have also had to re-do all the flooring, some of the plumbing, the furnace, and a couple of other things as well. The difference? The builder and the subcontractors they hired. It pays to use a reputable builder, and cheaper is not better…unless you don’t plan to be there long, or if you plan to turn it into a rental. There are definitely some builders with better reputations than others, and with more longevity to their homes. Don’t get caught up in ‘flash’….you need quality build over pretty flash.
You have no idea how the neighborhood is going to ‘shake out’. Maybe it starts out as all homeowners, and 5 years later you are surrounded by renters. The house next door to mine has been bought & sold 5 times in 13 years! We have had good neighbors…and not so great.
The nice thing about buying a new home? This is YOUR home…(in most cases) you made the choices, and helped with the planning. You have all the latest energy efficient insulation, products, appliances. You have the newest technologies. You have the 30 year roof (whew! Won’t have to replace that for awhile), the warranties for the appliances, the knowledge of not having had anyone in there before you…it is a fresh slate, and the peace of mind that comes with knowing that there is nothing ‘wrong’ or that ‘needs to be done’ with the home. These are HUGE considerations! We had our home built, and yes, I would do it again (just with a different builder). LOL 🙂 In fact, my family is currently in process to have a home built on land. There is a lot more to it when you are going that route vs a builder in a development.
Our area has been, and still is, one of the top markets in the nation. If you look around you will notice some national builders have decided to come play in our neck of the woods. National builders tend to be less ‘persuasive’ with what they will do for the buyer, and tend to be more ‘you HAVE to use OUR lender’. The builder themselves will allow less buyer input since they are national, and not local. I don’t agree with the builder lender, and this is why…that lender works FOR the builder, and NOT you! That lender is tied to the builder and wants to please them as that is where their bread is buttered. That lender isn’t really too concerned with having your referrals…would they like them? Of course! Will it make or break them if you do, or don’t? Not really…they have the builder. The builder is their client…NOT YOU! …and this is my issue with them.
Local builders are more in tuned with the community. They have more pride in turning out quality homes because YOUR referrals really do matter to them. Local builders will be more lenient with closing costs, and local lenders. Local builders will value your input and allow you make some changes to the home. The home is more personally….yours. Our local builders are also much more energy efficient than the national builders. 🙂
I am not saying that the national builders are bad, or bad quality….they are (for the most part) good homes. The only thing you need to remember with national builders is that they will lack that ‘personal’ touch that allows the local builders more flexibility in working with buyers.
There are good and bad builders of both local and national builders…and really a home is only as good as the subcontractors that are hired….not the builder themselves.
Finding a New Home…
Use your buyers agent! Remember that the builders lender works FOR the builder, and so does the builders real estate agent…they both work FOR the builder, and that is their number one client….NOT YOU! Please remember that, as the buyer, YOU are driving the bus…YOU are the boss, and the number one client. Lenders and real estate agents? We are like GPS…just helping you to get there! 🙂 Not all new homes are on the market…most of them are, but as agents, we hear about developments coming up a lot sooner than the general public.
The best time to buy a new home?
Sounds weird, but historically, the best time is either at the very beginning of a development when the builder wants to get people in (no one wants to be ‘first’), and at the end of the development when they just want to get it finished so they can fully move on to the next one. Sometimes the end of the year is also good if the builder is trying to meet some numbers, but this is very ‘iffy’ and shouldn’t be counted on.
Is it better to buy new vs buying already built?
This really is a personal decision. Some folks prefer a new home, but some folks prefer the character that comes with an older home. It is cheaper to buy a home already built than it is to have one built, but there is usually some items that you, the homeowner, will have to deal with on an existing home. There is also the yard issue as new homes tend to have smaller, or no yards. New homes also have smaller garages, larger bedrooms, but smaller family spaces, and HOA’s…as new developments have HOA’s, and most older neighborhoods don’t. Always weigh your pros and cons and choose what is best for you, and your family. Talk with your buyers agent…ask questions… that’s what I am here for.
Information is power, and I hope that I am able to help you. Good luck, and as always…May the odds be ever in your favor out there…. AND If you are looking for a real estate agent, I would love to be able to help you.
As always….this is just a quick overview…. please remember that your agent, and your lender work for YOU. You drive the bus…we are merely GPS to help you get to your goals. Like the classes, this weekly blog email is to help you with your home adventure. The goal is to be informative and non-promotional. 🙂 We are, however, hoping you will call and want us to help with your adventure.
If you have any questions about this, or something you have heard…or if you would like me to help you with your home adventure, please call, email, text, or facebook me anytime. I am, as always, happy to help!
Thank you again for your business and your referrals!! …and thank you for referring these classes to your friends, family, and co-workers.
. ..disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings…
Upcoming Topics: Septic vs Sewer & What is ‘escrow’?
Last Week: WHEN do you get the keys???
Have a great day, and I will talk to you soon,