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Haggling For Incentives

The incentive amount that a builder has offered me when I walk through the door has never been the final offer. Whether it’s 25k, 30k, or even 40k, you can always get more. Which is evident by the fact that they are throwing around tens of thousands of dollars. 25k sounds like a lot to you as an individual, 25k in design center options is nothing to a builder. You should always ask for more. And you know what? The worst they can do is say no and give you the original offer anyway. But usually they will say yes to another 5 or 10k. I got 45k in upgrades and I still think I could have taken more.

Another thing about incentives is to find out where you can apply them. Can you apply them to structural upgrades? Or just design center upgrades? Can you apply them to the lot premium? Can you apply them to elevation upgrades? This is important. When you are buying/building a house, you probably want to know the all-in price right? Well if you sign the contract and later find out that you can’t apply your credit to anything but the design center, the lot premium and elevation alone can be tens of thousands, not to mention any structural changes that have caught your fancy.

If you are considering a certain house with a certain builder, ask if you can price out your options. They should let you do this, and if they don’t, then you know there is trouble. We priced our options at about 4 builders and it educated us so much on the whole process. The first builder gave separate incentives for structural and design and you could not use those towards lot premium or elevation. So that added another minimum of 7k onto the base price. This builder had an extremely interactive online pricing system where you could price out all of your options per the floorplan. For example, you could see how much it would cost to upgrade the flooring for the family room and master bedroom to wood. You could see how much it would cost to upgrade the granite to a Level 2 or 3. This gave us a really good idea of how the whole options process was going to work.

The second builder sent us a price sheet for all of these same options. However they did not allow you to use any of your incentive money on structural. The third builder had an online tool that had to be operated by an employee so we sat in her office and filled out the whole options list. This is where we discovered that with this particular builder, you had to pay extra to get full gutters (standard was only the front half of the house) and only two fans came included in the house.

The builder we eventually selected is a smaller family owned builder and therefore had no such fancy computer system. However they did provide the pricing sheets of some of their inventory homes so that we could compare those options to the ones we wanted. Also, full gutters were included in the house, along with five fans, a sprinkler system, and blinds for all of the windows. All of these things were expensive options for builder #3. As I said, we ended up with $45K in options and were able to apply this to lot premium, elevation, design center, and structural upgrades however we wanted. Options are a huge part of building a house so you want to make sure that you understand how it all works and that you get as much as you possibly can.

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A Lot to Consider

The lot is not the most important thing. There are many nice lots and if you are in a well planned community, you will probably be happy wherever you are. However, some lots are nicer than others, which is why there are lot premiums. A premium could be put on the lot because it’s in a cul-de-sac or because it’s bigger or because it’s on the lake or golf course. The range for these premiums is huge. For our particular development, lots ranged from 0 to $40k.

Lot Size

There are also standard lot sizes. When you are building, the section you build in will have a specific lot size which is the measurement of the front of the lot which can be something like 50’ 60’ 70’ 80’ and so on and so forth and everything in between. In a suburban master-planned community, they will usually only build a certain size house  on each sized lot. For example, you can’t build a small 1800 sq ft house on a 80’ lot just because you want to have a massive backyard. Therefore, your backyard size is going to matter based on the plan that you put on the lot and which lot size you build on. Another reason cul-de-sacs and larger lots are at a premium is that you will be able to build the same size house and end up with a bigger back yard.

Also consider traffic. Cul-de-sacs are considered the best because you won’t get much traffic. The only people driving on that road will be your neighbors and people who are lost. So you’ll have much less noise AND your lot will probably be larger because the lots fan out in the back.

Fences

Open view fences, wood fences, and brick walls. These are a few examples of what you might be stuck with when you buy a lot. If you are moving into a master-planned community like we did, you will have no say in this matter whatsoever except by which lot you pick. Some communities like to have corner lots open to public view. Some communities like to have all fences that are facing public areas like roads, parks, or lakes, open to public view. So if you have a dog that can get through wrought iron fences or can jump them, or you just prefer your privacy, you are going to want to ask your builder about this.

Easements

In master planned communities, your property is most likely applicable to some kind of easement which means there will be a portion of your yard that you cannot build any permanent structures on. This is mostly relevant if you ever consider building a pool.

So while the lot is not the most important thing, there is still a lot to consider. We ended up with a cul-de-sac lot where we only have a neighbor on one side and our lot premium was only $4k. And one of our walls is a brick wall maintained by the development! Score!

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Plenty of Fish in the Sea

You started out going to one model park and looking at five houses. Maybe you visited a few other communities, a few other houses. You looked at a few below your price range and too many above. Feel like you looked at enough to make a choice? WRONG. Look more. If I learned anything from my house hunting excursion, it was that there are MANY beautiful houses out there. This is not like human relationships, you will fall in love many times. Over and over again, you will think to yourself “THIS IS THE ONE”. I don’t want to be a cynic, but this isn’t like that. There are plenty of fish in the sea, and there is no one soulmate of a house. Builders are good at building houses. That’s why they are builders. That means you are going to fall in love with lots of floor plans. And just when you think you’ve found the one with the perfect kitchen island and the high ceilings that you love, you’re gonna find an even better one with an even bigger kitchen island and even higher ceilings.

So, what I’m saying, is that you can never do enough research. Obviously there is a point to call it quits. But more often than not, you could stand to do one more viewing, even if to eliminate an option from your mind. In the end, the perfect house is not just going to be a floor plan. The perfect house is going to be the perfect floor plan, the perfect incentive package, good building quality, good customer service, a good neighborhood, a great lot, and the right price. I would advise that you don’t settle on any of these things. If you ever consider settling think about how you will be paying for this for the next 30 years of your life.

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Model Home Mirages

Model homes are always fun. They are beautiful and exciting, but honestly, they tell you nothing about the builder and their quality. You cannot compare your finished product to their model home. If you do fall in love with a model home, ask how many upgrades were put into the house. This will also tell you something about the culture of the builder. If they are selling a $350K house with another $350K of upgrades in the model home, most likely they are crooks. Haha no, that’s extreme, but they are definitely pulling a bit of a bait and switch.

You can look at the fit and finishes of the model home, but pay more attention to the floor plan and if it suits all of your structural needs. If it does, check to see if the builder has anything in inventory. Even if it is not the floorplan you are in love with, check out an inventory home, because it will give you a glimpse into their finish quality. Do they have sloppy paint jobs? Do they hang the doors straight? Is the tiling messy and uneven? Is the sealant around the plumbing a mess? That is the first thing. Is the quality any good? Because of course the quality of the model home is going to be immaculate. But the quality of an inventory home will reveal the truth.

The next thing you can check out in an inventory home is how nicely did they do upgrades? Most inventory homes will have a medium amount of upgrades because they want to make it desirable but not to have to overprice and then drop the price and make all the upgrades free to the buyer. So, how well did they choose their upgrades? Did they put any wood flooring in? If so, what is the quality? What does the standard lighting package look like? What about standard plumbing fixtures? Are they good enough for you? Or are you going to want to upgrade them when you build your own?

Now that you have browsed some of the inventory, how do you feel about the house? Do you still feel like they are a quality builder who are going to give you the house of your dreams? Or do you feel like you are going to have to pay double the starting price in upgrades just to get it how you want?

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Build vs Build

If you are reading this to figure out whether you should build or buy your first new home, this is not going to be very helpful to you. My husband, Tommy, and I decided to build for many reasons and honestly didn’t even think about buying. I grew up in southwest Houston where building is commonplace, affordable, and relatively easy. My parents built their house from scratch and it has always been a dream of mine. So in the build vs buy stage of our journey, we had extremely selective hearing and we pretty much skipped that stage altogether and went with build.

I am not going to make an even argument here. I’m not going to list the pros and cons because what would be the point of that after I already made my choice. I’m just going to list all the good things about building your own house:

1.) It’s brand new. That’s right. No one has ever lived in it before. No smokers who insist that they have kept everything odorless. No cats who “never claw at the carpet”. No murderers whose wives “made them do it”.

2.) It’s your perfect home. You don’t have to settle for a granite countertop that is too dark. You get to pick the exact one you want. You get to pick the lighting, the floors, the fixtures, the paint, the brick, everything.

3.) It’s fun! The whole process is something that many people never get to do. You’ll get to pick out your plot of land and watch your house grow from just a slab of concrete into what you will call your home. Picking tiles is fun guys! Right? Yea!

I’m sure there are some equally good reasons to buy instead. So if that’s what you did then good for you!

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