You have decided it is time to move out and live your dreams and what better to bring one of your goals into existence than a newly built home. Buying a newly built home can be an ego booster and-or adds to a sense of accomplishment. Some people like to be the starter of new house history and the fact of being the first to live in a new house.
Buying a home is a big thing, and buying a newly built home is even a more significant thing. With an existing home, you pretty much see what you are getting into, but with a to-be-built home, you have to rely on your imagination, creativity, a skilled real estate buyer’s agent and a reputable builder. In making your dream of a newly built home come into existence, you have to plan and make sure you have considered all things and prepared to deal with it all. Time is money in real estate, and if you do not do things promptly after you signed on the dotted line, you can lose money. In helping you to consider all things and to control your budget, it is always best to have a skilled real estate buyer’s agent by your side.
To see how it all fit together, you have to understand the builder’s standpoint. Before a builder buys vast land to develop into Public Urban Development (PUD) a feasibility study is completed to determine if the location can attract a demographic based on people of a certain income bracket that supports their venture. The builder then builds a model house to set the standard of the homes to be built in their development that demands the price they have established for their PUD. Once that is done, they have to keep the sales price within a certain margin so the builder can maintain their set appraisal price for the houses. Usually, on new build, appraisers use the Cost Approach Standard to determine the value to start then after the community gets going, they base the appraisal of the last property sold within a specific time. Thus, the builder cannot afford to reduce the sale price based on hard bargaining because if they sell one unit way below the last sold, it hurts the value of the other houses in their development. Though the builder has their base price with all the average amenities, they still need to sell above with some options that also help in reinforcing the sale price of their PUD.
A builder is trained to upsell you on options, and this is the point where control has to be exercised based on your budget. Most people moving into a newly built home do not want to move in most of their old furniture, so usually, after the house is ready, they go shopping for new furniture to compliment the new home. In so doing, the monthly budget that initially qualified them to handle paying for the home surpasses their qualification based on the additional future monthly bills.
It is best practice to add a personal option expense amount and determine a monthly budget to pay it back then let your loan pre-qualification consider that amount as part of the record. With that, you can see the loan amount you qualify to spend on the house and options. It is one thing to want to live in a particular community, and it is another to stay living there after the ink dries on your contract. In the luxury homes, community purchasers do like the prestige of living in a community with others within the same demographic that can afford the prices of that PUD community. It is best to get pre-qualified for a loan before you go house shopping. When you know the amounts you qualify; then you can search for a home with laser focus to find the right choice.
A skilled agent knows the many issues that can come up and advise you on the problems. The agent usually considers the builder’s budget line then pivots from there with looking out for the best interest of their client.