THERE IS CONSIDERABLE COMPETITION FOR NEW HOME BUYERS IN LOVETTSVILLE, Virginia. Three major builders are vying for a VERY limited number of home buyers. Base price is critical, but what does it mean??
New Homes in Lovettsville is exciting because the "Lovettsville New Town Center" will offer parks, medical offices, restaurants and will be surrounded with lovely new homes perfectly suited to the area and real estate in Lovettsville, Virginia.
SO THE BASE PRICE IS ONLY $499,900??? Just what does that mean?? Well, for most builders it means that you will get a house with standard features that include such items as the roof and front door. After that, so many things that make the model home so attractive to home buyers are "upgrades". Without the upgrades, you do not get the GOURMET KITCHEN, the GARDEN BATH, the HARDWOOD FLOORING on so many rooms.
So much turns out to be upgrades that the model home really is like the menu at Club 21 in NY, merely a suggestion. Come to think of it, some of the prices of upgrades are reminecent of the prices at Club 21 in NY which, by the way, are NOT shown on the menu. If you have to ask the price of a menu offering, you can't afford to eat at "21".
I've always loved selling new homes. Back in the 1980s and 1990s, half of my sales were new construction. Times changed when the builders discovered the Internet. Oh well. But, from time to time, a home buyer will recognize the voice of experience and realize that, since it doesn't cost them a dime, perhaps they can use some support when considering new construction. I include new homes on my web sites, but folks believe that they know more than me and believe that they get a better deal from the builder without an agent. That is probably true with some builders, but not so much around here and buyers have got to realize that if a person has sold over 100 new homes, they must have learned a thing or two along the way. When I built a new home in Lovettsville, I thought it would be fun to sell a few local Lovettsville new homes.
So, I still want new home buyers, even though dealing with builders can be complicated. See below for complication in the extreme.
Now isn't everything clear as it can be? Mmm, our buyers have the choice of three different grades and three different finishes and three different widths. Fortunately, the builder has included hardwoods in the foyer, powder room, kitchen and breakfast nook as a STANDARD FEATURE. Love those Standard Features.
WANT TO SPEND SOME REAL MONEY? UPGRADE THOSE KITCHEN CABINETS. Upgrading kitchen cabinets in the house these buyers love is between about $5,000 and $10,000. This is not a large house. Builders make a LOT of money on cabinet upgrades. Here's a good one. Corian Counter Tops are standard. BUT, there are COLOR upgrades that are priced at $2,600-$3,700. You gotta love it.
In the past 5 years or so, it has become popular for builders to offer upgrads to the Master Bathroom for Tub Surrounds, Whirlpool Jets, and, of course, flooring upgrades and shower upgrades.
Tiles for upgrade Soaking Tub Surround. They are very nice.
It goes on and on. My buyers and I spent 4 hours yesterday going through the upgrade list and viewing the features in the model just so that the buyers can get a handle on how much they want to add to the base price for upgrades. It's easy to add 10% of the base price just selecting the Elevation that is shown on the model home, which, of course is what most buyers will select. Buyers will overwhelmingly buy what they can see. In this case, the builder's model is a very nice Victorian style "Neo-Classical" style with a wrap-around porch with an Elevation upgrade cost of $30,000. Ouch. But, it does provide style, additional floor space and windows.
SO, WHY DON'T THE BUYERS JUST BUY WHAT THEY WANT AND FORGET ABOUT IT? AFTER ALL, THEY CAN FINANCE THE COST OF THE UPGRADES FOR 30 YEARS. True, but that isn't the advice I give my buyers. One reason some homes sit and sit and sit on resale is because the original buyers over upgraded, increased the cost of the home to a point where it is OUT OF MARKET. OUT OF MARKET is code for "priced way higher than anything else in the area for similar homes and square feet". "BUT, LENN, look at the beautiful upgrades. The house down the block doesn't have these beautiful kitchen cabinets with raised panelling and Hickory Wood." "True, Mr. Seller, but the owners down the street didn't pay an additional $10,000 for their kitchen cabinets and that's one reason their house is now under contract."
My advise to buyers?? Have the builder upgrade structural items that you can't improve after settlement. You can replace the Corian counter tops with Granite after settlement a lot less expensively than the builder wants to upgrade. Anything that adds square feet such as Bay Windows has to be viewed from the cost per square foot for the upgrade. We looked at one of the Bay Window upgrades offered by the builder and it comes to about $425 per square foot on a house that is about $200 per square foot. THAT IS an expensive Bay Window. In fact, this particular builder is charging about 30-50% more for many upgrades than other builders of similar size, location and style homes. Not only that, upgrades are fungible. They are added and taken out of Standard Features depending on the builder's need to advertise a competitive base price, which, in the end is like the menu at "21", merely a suggestion.
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Lenn, this is great information and I agree with you 100%. The pictures were very helpful! I will share this with a couple of my buyers that have not yet gotten the point! Happy Spring.