In the first two editions of the Prince William County New Construction Buyer's Guide we covered:
Hiring a Buyer's Agent
What to look for as you Tour the Model Home
Today we are going to look at lot premiums, builder options and upgrades all of which add to the cost of the home you are considering buying. As you first drove through the neighborhood you took note of lots in the neighborhood that caught your attention. Was it the ones that backed to the pond, woods or perhaps the community playground? Now let's look at the builder's site plan. As you will notice a number of the lots have premiums associated with them. Premiums vary between builders and neighborhoods but in this example we see lot premiums that run between $5000 and $25,000. There are some lots with no premiums. Are those lots really less desirable? Are you going to see the pond all year round? When the trees around the pond grow to maturity will you be able to see it? What about safety? If you have young children will you need to fence your yard, which will block your view of the pond? How much will the lot premium cost you over the life of a 30 year mortgage? All of these are questions you need to ask yourself before you add the cost of a lot premium to your mortgage.
When you toured the model home you noticed all of the little signs that suggested that the upgraded appliances, tile, granite and many other items are not standard. Did you know that builders have at least a 25% markup on those items over what you would pay for them retail? When you select an upgrade to be installed from the builder you are paying for convenience, which isn't always a bad thing on big ticket items but on others the cost can escalate quickly.
Some of the biggest markups come on appliances, granite and hardwood floors. Take the option sheet and prices that the builder gives you and make a few calls or look at local stores. With free delivery, free installation and discounts you could save yourself thousands of dollars by passing on the builder upgrade and having them installed yourself. I know, I know you want a house that knocks your socks off the minute you get the keys. But remember how much will those options cost your over the life of a 30 year mortgage?
The final thing a builder wants you to consider is options. When we talk about options these are the bigger ticket items such as brick fronts, porches, decks, finished basements and extra bathrooms. These are items that are harder to handle after market and are more difficult to price due to the difference in what contractors charge. One builder I recently visited was offering a finished basement with recreation room, den and full bath for a total cost of $17,000 which wasn't unreasonable for the amount of finished space and the quality of the finished they were offering. This may be the time to elect to builder option and have the recreation room completed as part of the contract.
Now we have an idea of what you should consider before we sit down with the builder representative to discuss and offer. The next post in the series Prince William County New Construction Buyer's Guide we will cover builder contracts, financing and incentives.
If you are ready to get started on looking at new construction in Prince William County give Cindy Jones a call at 703-346-2213. Let my experience with builders and new home contracts give you an edge to get the deal you really want on your new home. Now more than ever an experienced buyer's agent on your side is critical to protect your best interests.
Comments(12)