Building new v. buying existing home (Dallas, Austin: HOA fees, appliances, how much)
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Just to add one more variable into the mix we're already dealing with in deciding on a new home in Austin, what do people feel are the advantages/disadvantages between building a custom house in a new development versus purchasing an existing house in an established neighborhood?
My wife's been looking at some of the Newmark Homes up near Cedar Park or Brushy Creek. We're coming to Austin next weekend to do some house hunting in the River Place, Steiner Ranch, Eanes & Lake Travis areas. I certainly understand my wife's allure to being able to custom-design her "dream home", but I'm trying to assess the pros & cons of going this route.
Couple of my thoughts to start:
1) Downside to building:
a) no "neighborhood" already developed, and would likely have to wait a year or more to see what the personality of the neighborhood becomes.
b) ammenities such as parks, golf clubs, pools etc... may not exist for some time.
c) CRITTERS (everyone says that you encounter more scorpions, snakes, spiders etc... in a new location, as opposed to established neighborhoods)
Question: How much, in general, can the "options/upgrades" run in a new home building? If we want our "dream house", I'm guessing we'd be looking at going significantly above the "base price" of each of the design plans. So, say the base price is $300,000 and we want to upgrade significantly, are we looking at another $100,000? Another $150,000? More?
Finally: Any thoughts on Newmark Homes? Good reputation?
Finally: Any thoughts on Newmark Homes? Good reputation?
My parents owned a Newmark home for several years (as a waypoint between Georgetown and Fredericksburg) and my wife has owned her Newmark for 8 years now (bought it one year old). Both had or have had good experiences, for the most part. The construction was quality and what you would expect for the price, and we have used the home warranty once (toilet that was not properly seated at the time of construction) and it was taken care of professionally.
That said, I believe there are several posts on here about their parent company declaring bankruptcy, although I understand that the division around here is actually doing fine. I have no idea what that means, though, so it might be worth checking out.
Building a new house does let you customize what you want. It also adds some stress while the building is going on, and there is always a little uncertainty as to completion date and financing rates. On a 'concrete' level, the new home itself is almost always more of what you want.
On the other hand, where the home is located, and some intangibles, might make an existing home preferrable. If you are in a MUD, and the area is sparsly built up, you may also shoulder a large tax burden for quite a while.
We've had both new and old in Austin. Our first home was a Newmark in Steiner Ranch. Construction is very good. Newmark is reputable. We now own a 30 year old home in an older neighborhood in North Austin.
New homes/neighborhoods offer:
- the house the way you want it with all the bells and whistles
- new clean neighborhoods with most people excited to be there and wanting to meet the neighbors, etc. (which if you're a little anti-social, you may be annoyed by these happy neighbors who want to have BBQs and playdates) - lots of new, young families
- nothing that you have to fix for a long while
- lots of amenities like pools, golf courses, etc.
- sometimes newer schools
- more family friendly - like sidewalks and lots of kids and playgrounds and parks
New home/neighborhood downsides:
- smaller lots so less privacy - you'll see a lot of about 15-20 feet to your back fence
- no trees (for ease of building, builders usually bulldoze everything and then plant a few puny trees that don't look like trees for about 10-15 years
- usually worse commutes as they are further out
- a more generic look and feel (we call them cake decorating neighborhoods...looks like someone put a bunch of houses in an icing cone and then deposited them one by one...of course some people like that and that's ok)
- high HOA fees (usually)
- HOA rules (some people like them, some people don't)
- probably won't appreciate in value as much as older homes that are closer into town
- when you buy a new house, you have to budget for things like window coverings and landscaping - maybe a sprinkler system - could add 10-30K to your new home in after-purchase additions depending on what you want/need
- yes, critters, but you get a pest company to come plug up the holes and do a little spraying and you shouldn't have a problem. We had 2 scorpions in the house at Steiner - they are little though - not like scary poisonous giant South American things, but they are out in the western part of Austin.
- and as trainwreck said, there is a certain stress level to building - picking all the interior colors and features out of thousands of choices and wondering when it's going to be done and hoping that the interest rates don't go up (though in today's economy, you'll probably be fine unless we experience some miraculous turn-around).
We like our privacy, so we ultimately feel more comfortable in an established neighborhood full of trees. We felt it was a better investment and I enjoy doing renovation, so this was a good fit for us. We've had to do quite a bit to our home but when we have done things, we've been able to do the top of the line if we wanted - something that usually builders don't do - like for instance with windows. Builders will put in fabulous looking appliances, because buyers can see that and then will skimp on things like windows b/c most buyers don't know any better...but then that's going to be true for most all newer (10-15 year and younger) homes.
Regarding your numbered concerns:
1) Most of the new neighborhoods have the same personality
2) You'll probably find that about half the promised amenities are built immediately to lure in buyers, so you probably won't be stuck with a neighborhood with no amenities at all.
3) I addressed critters above.
Regarding upgrades - wow - that can be so variable, but assuming that you maybe do a couple of "expensive" upgrades and the rest sort of mid-grade upgrades, you could be looking at 50-100K. They will quote you the prices first and then you can add up everything and then come off from there. From our experience (though it was a while back), Newmark was pretty fair with the costs they attached to upgrades. We made a list, decided what was important and what we could afford to upgrade and then okayed that. Something to consider in having the builder do all the upgrades is that you can roll the cost into your mortgage.
I suggest though that you have a great realtor and definitely use the realtor even if you're buying a new home. It's good to have a professional run interference if you come across any problems.
Oh and if you DO buy a brand new home, get a private building inspector to inspect at various stages. It might cost you an extra 300-500 overall but it will be worth it.
Hi! I just joined when I saw this post. We had a Newmark house in Steiner Ranch until just a few months ago (actually, we're trying to sell it, but we've already moved to Lakeway).
Newmark has filed bankruptcy. I personally had some issues with Newmark. Many of the homes on my street were Newmark. One home had severe damage from a poor contractor shortly after moving in, and they had to move out for nearly a year while they fought to get it fixed (mold mold mold!).
Steiner is fine if that's what you're looking for, or something similar, but I'd avoid Newmark. I'm surprised to hear that they still around. I got the official letter a month or two ago.
Oh, and we had tons of scorpions when we moved in. We were at the end of the development there 8 years ago and backed up to the nature trail. We had every kind of critter you can imagine.
And HOA dues that high suck, especially if you never use the community things they pay for.
Newmark has filed bankruptcy. I personally had some issues with Newmark. Many of the homes on my street were Newmark. One home had severe damage from a poor contractor shortly after moving in, and they had to move out for nearly a year while they fought to get it fixed (mold mold mold!)
Had no idea that Newmark was having problems, but did find an article in Dallas Morning News about their selling assets to another builder. Do a google search. Also there are some other threads about Newmark - search the Austin forum for "newmark".
Honestly, I would not put 100,000 in a 300K home. First of all, you need to try and get incentives with the builder. We put in about 30K which the builder paid most of. If you put in 100K you will not see that money back for a long time. Don't over upgrade your home, my brother did this, his home is amazing but his neighbors homes look like crap but when they go to sell, the price will pretty much be the same as their neighbors. Don't plan on getting upgrade money back unless you stay in the home 15 plus years. Also, I live in a new home and have had no problem with bugs at all. I've heard that older homes have more problems with infestation. Newmark is a decent builder, the have some of the best exterior elevations and do a really nice job. Regardless of what builder you choose, you will still have lots of touch up to be done after closing. Pretty much all builders get lazy here and there and craftsmanship can be shotty at times.
Also, Newmark DID NOT file bankruptcy, amazing how people still get their facts wrong. Their parent company TOUSA filed bankruptcy. Newmark is very successful in the Austin area. They aren't going anywhere.
my whole thing with old neighborhoods is trees, trees, trees. But - we moved here from Phoenix, where trees are scarce, and I really missed the shade trees of my childhood back in Chicago. I still get tempted every now and again by the new homes in Steiner and getting exactly what I want, but then I drive down my street and see the old oaks (plus our great neighbors and friends) and it's just not worth giving up for a shiny new house. But everyone has their preferences!
There are several things that you might want to consider when you are weighing your options.
One thing I would like to point out is that your property taxes are much higher in Steiner Ranch than elsewhere. It is a great neighborhood with a fantastic elementary school, community involvement, common amenities, etc.....but, most people don't realize that the taxes are higher.
If you are considering a tract home I would compare all of their incentives before deciding......and, I can't imaging that upgrades could possibly be $100,000 on a $300,000 home.....and, if they are, I wouldn't go there. You certainly don't want to price yourself out of the neighborhood. You need to bear in mind your resale value, which most buyers do (unless you plan to live there for many years).
One advantage to buying a new home is the builder warranties that are required by state law......you aren't going to get that with an older resale.
You also need to think about your commute time to work......if you will be working in central Austin it could be a 30-45 minute commute from Cedar Park, Brushy Creek, or Lake Travis. Eanes and River Place are closer in.......
Most of the neighborhoods you have mentioned are already pretty established.......they may not have huge trees like old neighborhoods, but they certainly already have "personalities".
You're going to have critters everywhere in Austin. Yes, new construction seems to stir up the scorpions, spiders, etc. but you just need to have a good pest control service on a regular basis.......just keep an eye on the insect activity and you won't have any problems. I hate to be an alarmist, but I would make sure that you know what a brown recluse looks like......they look pretty harmless, but can do some pretty nasty stuff to your skin. Just google it and see what they look like......we have had several of them in all of our houses.
Lastly, I would suggest that you have a realtor help you with your purchase......there are many aspects of buying a home in which they can advise you.
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