If you are a buyer, there are obviously a lot of options right now: re-sales, foreclosures, short sales, and brand new to- be- built- homes. The last option is where you pick out exactly what you want in a home and a builder builds it for you. Not so long ago everyone wanted new construction or pre- construction. People literally camped out overnight and waited in line to buy these homes before someone else did!
But now with the gluttony of homes on the market, should you as a buyer consider looking at building your own house from scratch? The answer is a definite yes. Sure, the foreclosure and short sale markets are phenomenal for buyers, but don’t be so quick to overlook the new home market.
Most national builders are publically traded corporations and they must provide a profit to keep the shareholders happy. The best way to do that is to sell houses. Some developments in our local area have sold over 200 new construction homes this year!
How do they do that? They drop the price to levels at or below the rest of the market. Some are buying failed developments for pennies on the dollar and then revamping the development and selling new homes for a fraction of the price. It’s a win-win. The developer makes a profit and you the homeowner, get a brand new home built to your liking at a great price. Not to mention these once deserted communities come back to life!
How do you take advantage of this new home market? First off, don’t be afraid to negotiate with the builder. In the past the “price was the price.” That has changed now and you can get a better deal than you think. Make sure you find a good Realtor in the area who is familiar with the new developments. Make sure they can tell you about the different communities, amenities, financial stability of the development, and which developer is offering the best prices.
A lot of times I hear of buyers who walk into a sales center on their own and don’t use a Realtor – even though there’s no cost to the buyer to have the knowledge and negotiating skills of a Realtor; the developer pays the Realtor. You would think that most of the time buyers get a better deal without a Realtor, but the opposite is usually true. Developers prefer to work with Realtors and gladly reward them for bringing in a new buyer into their development, which helps to leverage an even better deal than the average buyer could get on their own.
Make new construction a priority to explore in this market. I think you’ll be very happy to be the first person to live in your house!