new home buying strategies (Dallas, Nash: wood floors, for sale, rental)

[twalo]

This is a great site and I am new. I was looking for the best advice on purchasing new homes. I am sure that this question has been answered in part on numerous threads and here is what I have learned so far.
1. Do as much internet research as possible but do not think you will get all your answers on line.
2. If you can buy an inventory or spec house there is more room for a negotiated price.

I am from Chicago. The new home market down there is so much different that I still have many questions.
1. What is the average build time from permit to close?
2. How long do municipalities take to issue permits?
3. Is there a best season to purchase?
4. Are builder upgrades like high efficiency funaces, granite counters, upgraded appliances, door hardware trim and lighting, flooring upgrades, etc. worth it in general? In Chicago, these upgrades are a rip-off and are usually 2.5-4 times the cost or comparable work after closing.
5. I don't want to offend realtors but once I relocate I will not be in a hurry to relocate and will not be in a binding rental lease. I will have done enough research on the area to know what I want and where I want to live. again soory but perhaps someone can still sell me on the merits of using a buyers realtor agent when purchasing a new home under those conditions.

Thanks All

[nsumner]

Glad to see that you have done a lot of homework, I'll try to answer your questions which are all good and btw, no offense taken.

1. Build time depends on the builder, the best builders take 7-9 months, that includes the delays such as weather, shortage of material etc. Some will tell you that they will build in 4 months... that says it all.

2. All permits are procured by the builder and since they already have a relationship built with the municipality, it's pretty fast. That time is built into the timeframe I covered above.

3. At the end of a quarter (any) is usually best time to buy from a builder. They want to finish the quarter with a bang so they give more incentives to buyers such as price reduction.

4. There are some that are always cheaper with the builder, such as wood floors, and always upgrade the pad instead of the carpet. Granite counters are priced decently, most builders here install energy efficient furnaces and 13 seer minimum on the HVAC. Light fixtures and door hardware depends on the builder, if you are handy enough, I would say do it yourself, same with ceramic tile, if it's not standard, have them put in vinyl down (dont' glue it) and after you close you can replace it. There are many outlet stores and surplus warehouses with discontinued items.

I moved here from Chicago (Schaumburg) myself and I am familiar how much of a rip-off it is to upgrade anything with the builders.

5. When you deal with a builder, you are negotiating with the sales representative at the model, that representative is looking for the builder's best interest, why don't you want someone that would look after your best interest especially that it doesn't cost you anything. Builders pay realtors from marketing funds so if you have one or not, you pay the same for the house. A buyer's agent can advise you on how much to offer by doing comps of the area, tell you which items are negotiable with the builder, pros- and cons of different floorplans (you have to think resale too), the lot the property it's on, what is going to be built behind it? reputation of that builder? Walk-thrus, what to look for? inspection? appraisal? survey? title search. Builders have their own contracts and they are 100% protecting the builder not the buyer. They don't even have a closing date which means that you are at the mercy of that builder on when they will finish your house.

Whatever you decide to do, good luck to you and welcome to Texas.

Naima

[NS_Highlander]

Below are some tips many people often don't think of to help ensure the new home you get is of lasting quality.

1. If you are moving into a new construction neighborhood or a fairly new resale, check the reputation of the builder. Even if the house you buy now is in good shape, the rest of the neighborhood could be a slum in a few years. For example, I saw a house a few weeks ago that had windows that were taped and not flashed, as well as no moisture barrier between the siding and the OSB board. If the rest of the houses are built like that, I will put money on that neighborhood having rot in the walls in the future.

2. If you decide you want to move into a certain neighborhood also make sure the builder is transparent- even on spec home or resale. There are builders I have dealt with that does not allow walk-thoughs, phase inspections or for you to ever (and I mean ever) talk to the guy who is building your house. The first thing you should do is ask the sales agent what their polices are on the previous issues. If they have such evasive policy's, politely and promptly leave their office.
The question is what are they hiding? Companies like this cut very important corners and do not stand behind their work. Remember, if the customer service is lacking before they sell a home to you, what is it going to be like once you own it and the problems that come with it? Something to think about.

3. Get your home inspected by and ASHI certified inspector. ASHI has the highest standards, more so than NASHI. If you are building, have them phase inspect the progress. If the company won't allow it, LEAVE! Evasive builders never build houses built to last.

5. Get a good Realtor and make sure you are dealing with someone that will represent you when it hits the fan. Someone who will go the extra mile. If the Realtor has their stuff together, they will help you avoid some of the landlines out there. Never deal with an online Realtor that gives a rebate or a kickback. The service is just lacking.

[twalo]

nsummer,

Thanks for your insight. 7-9 months is shocking compared to chicago. most builders hers can and do finish in six months with the actual build time around 4.5 months. the delay is in the permit application time. this is surprising condiering texas homes have no basements and i guarantee your weather for constuction is certainly better than chicago.

If I plan to puchase a home in the range of 200K or so, i am guessing the agents commission at around 6k. I was looking at it as that is 6k that can go towards those builder upgrade that i asked about. if the builder is not paying an agents commission there should be more room for negotiating.

[socketz]

Originally Posted by twalo

If I plan to puchase a home in the range of 200K or so, i am guessing the agents commission at around 6k. I was looking at it as that is 6k that can go towards those builder upgrade that i asked about. if the builder is not paying an agents commission there should be more room for negotiating.

Most reputable builders keep these funds separate; In a market with gazillions of homes for sales, Realtors are their bread and butter. To buy a home from a new home builder where that builder has no agency (most of the new home builders sales people aren't even licensed agents so they have 0 fudiciary duty to you the buyer) with the buyer at all, is somewhat crazy.

Again, buying in Dallas is a very risky process if you ever plan to sell. Make sure you are represented by someone that knows both the area, comps, and the builder.

I assure you that an out-of-towner shopping for a new home here in North Texas will not be able to get the same deal that a seasoned Realtor can get for them....but of course the seller will lead you to believe this is the case.

[stouchstone]

I totally agree with the other realtors who have already answered some of these questions. I just wrote a contract with some folks who moved here from overseas. They were extremely knowledgable via internet research, however, they were extremely surprised at how inaccurate pricing and features were in reality when compared to the virtual world!!! I am a realtor and just like the others said you definitely have to do real research, which means calling the communities directly or getting in your car and visiting them to see what kind of inventory the builder has and how motivated they are. Websites and even MLS are extremely inaccurate! Also, a realtor can navigate you through so many things like when the builder says, "oh ya, we're energy star rated..." Well, that doesn't matter at all! Most of them are and the ones that aren't may have the features and not want to pay for each home to be certified. What matters is the actual energy efficiency materials they are building with. Not all low-e windows are created equally for example. What version of radiant barrier, if any, are they using? The list goes on. Not to mention, it's always great to have a second set of eyes reviewing every detail of how the home is, because you can't go back and renogiate for more stuff once the papers are signed. I also find that buyers have NO idea of how much they can negotiate into the price of the home. This is especially true with inventory homes, but I have certainly been successful with new builds, as well! And as to how we are paid, well it is typically 3% of the cost of the home, however, the builders are so enthusiastic to work with us, that they often pay higher than that. Most builders are not attaching that cost specifically to the cost of the home, but rather to a marketing budget that they have. I know for a fact, that my husband, who built our current home, before we were together, and did so without a realtor lost out on I would say easily $10,000 worth of discounts/amenities because he didn't use a realtor and he didn't know what to ask for! oh, and one last thing, it is definitely a great idea to buy a spec from a builder at the end of their fiscal year, however, you'll need to do some research, as their year end's are all different!

[harishv]

Twalo,

i am going to disagree with nsummer on time to build a home. I polled several builders when we were looking for a home and the three builders who said they could build a home the quickest as compared to the others were Highland, Drees and David weekley. On the other hand, Grand homes and one other supposedly inferior builder mentioned 8-9 months to me.
Last I checked, Highland, DW and Drees are about as reputable as it gets when it comes to cookie cutter homes. I suspect the time to build has more to do with the subdivision, how many homes are being built at the same time and how many building contractors the builder has and ofcourse the backlog at the city/county office in order to get the permits.

[twalo]

thanks again, i am still shocked at the buildtime.

[twalo]

Oh and one other question. There sure seems to be a lot of brick and stone on building facades down there. With all this talk about humidity and cooling costs, it doesn't make sense to cover your homes with brick. Brick holds vapor and moisture as well as stores the heat. This leads me to believe that all this stone and brick I see is the 1/4 inch or so fake or thin brick as opposed to the 2-3 inch full brick veneer. Am I right?

[MurphyPl1]

Nope, full brick and full stone on my house. You don't want anything other than brick on a home. Actually most of the suburbs have a restriction on how much non-masonry they will even allow.

Better weather resistance to extremes. It does insulate better so you don't have such extreme fluctuations, like you do with other types. We have quite a variety of weather. Recently we've had freezing weather but not a few days before it was mid-60's. It's not uncommon to have a 30-40F temp drop in one day. It also weathers better, and is lower maintenance.