New construction is on the rise, we are seeing considerably more new homes being built in 2013 and this is a great sign right? Well YES until buyers starting ADDING on thousands in upgrades and options which no recent sales will support!
Some builders very wisely are putting in their sales contract that the APPRAISAL should only come in at BASE price of home. If you have upgrades and the appraisal does not support these, then they are paid out of pocket. Until the market can catch up to this situation, this should be REQUIRED by all builders of their buyers.
I have one I am working on that has $50,000 in upgrades. NO Way that one is coming into value. Nothing listed or sold will come close to this price.
So before you go nuts with upgrades, consider that we do not have the recent sales to support these upgrades and we cannot just add to the prior sale dollar for dollar the amount of the upgrades as this is not supported in the marketplace.
We also cannot make across the board Time adjustments to "catch up to the market" for these new homes. LENDERS will not allow this....The subject must be bracketed by the sales, in other words The subject's value cannot be higher than all the recent sale prices...Will not FLY!
SO BEFORE YOU START ADDING OPTIONS AND UPGRADES, BE WILLING TO PAY FOR THEM OUT OF POCKET UNTIL THE MARKET HAS INDEED CAUGHT UP WITH THE NEW CONSTRUCTION FURY!
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