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Old 12-08-2018, 08:22 AM
 
Location: Denver CO
19,840 posts, read 10,768,572 times
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Quote:
Originally Posted by 2bindenver View Post
1. Know that Canceling your contract will likely mean forfeiting your earnest money.

2. Only get the options and upgrades that you cannot do later for your new house.

3. The builder operate on a cost plus profit basis so if you don’t need the option or the upgrade and you can do it more cost-efficient later then do it some of the things that are not able to do later effectively or things like electrical so if you want ceiling fan outlets or light fixtures in all the bedrooms do that now also get the best carpet pad that you can afford you can likely just upgrade your carpet later like 3 to 5 years seven years, and not need to upgrade the pad.
Agree with all of this. I had a spreadsheet for every option I was interested in, and then got comparison pricing to figure out if it was worth doing through the builder or on my own.

And for the record, in some cases, it was much cheaper to go through the builder - a couple of specific examples were upgrading to Decora light switches and lever door handles. In both cases, the builder charged a fairly small amount (around $100 or so) and that covered every light switch or door handle in the house. It would have cost me far more just to buy enough switches or door handles to replace everything, never mind the cost or effort of doing it after closing.

On the other hand, their prices for upgraded toilets was expensive so I had all 3 pulled out right after closing and replaced with Toto toilets and donated the other ones to Habitat for Humanity.

And in other cases, I paid a premium because it just wasn't worth putting in builder grade carpet only to have to have it torn up to get replaced with the hardwood floors I wanted.

I know not every builder is as free with the pricing info, but mine was good and I had a 30-something page price list with every option except flooring and tile work where you had to get specific quotes at the design center because there were just too many variables. It made it very easy to comparison shop, and I was able to switch things around to make sure that my final contract price on the house was where I wanted it to be.
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Old 12-08-2018, 08:27 AM
 
Location: Denver CO
19,840 posts, read 10,768,572 times
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Quote:
Originally Posted by turf3 View Post
. The builders rep admitted they'd seen upgrades ranging from $10K to $125K, but said $30-40K is typical.


I'm not talking about upgrades where you know the cost. I'm talking about them going to closing and finding out they were on the hook for a large amount more money than they thought.


If I find myself engaged in buying a pig in a poke and every vendor requires me to buy the selfsame pig in the selfsame poke, I'm going to opt out.
Quote:
Originally Posted by MikeJaquish View Post
I have closed quite a few new construction properties with buyers, from regional builders to local custom builders to national cookie-cutters.
Not once in 13+ years have I seen huge charges at closing that materialized out of nowhere.

It may be hard to get documentation of costs before contract, particularly if the builder has a complex design center system.
But, when using a design center, pricing is nailed down prior to commencement of construction.
So, I am very curious how your neighbors got themselves into that jam, and with what sort of builder and product.

Custom build, with an architect and an independent builder, and addons for change orders or cost-plus agreements, perhaps?
But, a Pulte-type cookie cutter? That is hard to imagine.
Quote:
Originally Posted by turf3 View Post
Well, they tried to get us to sign the contract before giving us a complete price. We refused. I guess the other people didn't. We got the total price, thought about it overnight, concluded it was a "go", and signed the contract.


I go back to the fundamentals of having money and spending money: always know what it is you're buying and how much it's going to cost before committing yourself to buy it.
I'm kind of confused here too. My experience was that I signed the basic contract and gave them a check for the earnest money, but they didn't even cash that check until after I had been to the design center and finalized my choices there - with the total amount above the original price completely in my control because I could have taken the builder grade option on every item and not paid anything above that original contract price. I have neighbors who did that, because they knew they could do all the upgrades themselves.

I'm not handy and didn't want to do a lot of work, so I knew that for any upgrades, I would be paying someone else to do the work so I took that into consideration. But I still had control over the decisions and once I had made my design center selections, my final closing price matched that number to the penny. I cannot fathom how there were any surprise charges at closing with a production builder. And turf3's second post explains exactly nothing about how that supposedly happened.
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Old 12-08-2018, 08:31 AM
 
Location: Denver CO
19,840 posts, read 10,768,572 times
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Quote:
Originally Posted by charlygal View Post
What did you do on-site everyday?
Quote:
Originally Posted by Midpack View Post
Checked their work whatever it was. Found several small issues, and three majors - all corrected, which tells me the builder agreed with my assessments.
Agree with midpack. I wasn't there every single day, but several times a week, and I came across many errors that I was able to have fixed during the build instead it becoming a larger issue to be resolved once everything was completed.

One of my favorite stories is that the builder had to replace the counter tops in the kitchen and both bathrooms - all for mistakes they made, like cutting oval shaped sinks in one bathroom even though I had upgraded to rectangular sinks. I teased them that they were lucky I hadn't gone with granite counters rather than laminate! lol!

I also think that while I wasn't exactly a squeaky wheel, the fact that they saw me in and out of the house on a regular basis meant that my house maybe got a little more attention since they knew I'd pick up on any mistakes. It would be nice to think they were careful about every detail in every house they build, but the reality is that isn't the case on a production build where it's more of an assembly line approach.
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Old 12-08-2018, 12:05 PM
 
Location: OC, CA
10,021 posts, read 13,566,504 times
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I bought from Pulte many years ago in Denver. It really depends on the quality of their sub contractors. Our house had a couple of major problems.

They installed a non GFI plug right next to kitchen sink

The double pane window in our kitchen was defective from the mfg you could even see the blue double sided tape on the inside pane of the window.

The HVAC contractor cut a large access hole to get to something in the HVAC in our basement and never repaired the hole There was a lot of hot air literally flowing into our basement and none in the guest room. They initially refused to fix it because it wasn't caught until after the 2 year warranty until I threatened to call local consumer advocate Tom Martino.

One of very large windows in the living room the seals failed and a huge crack in the window appeared and had to be replaced at $500

I would give Pulte a C.

Spend the $$$$ money and hire a home inspector even though it's a new build we found all of these problems and a couple of more on a new build.
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Old 12-08-2018, 01:46 PM
 
10,260 posts, read 7,860,008 times
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Quote:
Originally Posted by Midpack View Post
Checked their work whatever it was. Found several small issues, and three majors - all corrected, which tells me the builder agreed with my assessments.
I guess my point is that I am not a building expert. A round sink vs a rectangular sink is one thing. However, I (and most people) wouldn't know how to evaluate electrical work, HVAC, etc. Outside of hiring inspectors (which I plan on doing), how can the average person monitor good /bad work?

Seriously, I would be a little 5'2" woman walking around my building site trying to play it off like I knew what was happening.
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Old 12-08-2018, 02:20 PM
 
Location: Chicagoland
1,649 posts, read 1,524,391 times
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Quote:
Originally Posted by emm74 View Post
I'm kind of confused here too. My experience was that I signed the basic contract and gave them a check for the earnest money, but they didn't even cash that check until after I had been to the design center and finalized my choices there - with the total amount above the original price completely in my control because I could have taken the builder grade option on every item and not paid anything above that original contract price.
I can only speak from current experience on two production builders, but it varies with just the two.

The first builder takes 1% down on the base price of the home, lot premium and structural adds at signing, and then an additional 20-25% earnest money after the design center (within 30 days) on all the finish upgrades (floors, cabinets, counters, etc.). So for example $4,000 on a $400K base+structural+lot prem at contract signing, and $10,000 on $40K in upgrades after the design center - so $14,000 total invested. They will give you your deposit back if you balk at the design center, so you haven't lost anything - but they do not break ground until you've been through the design center and paid deposit and earnest money (these are the terms the builder uses, which may be different than their defined meanings).

OTOH the second builder keeps/pockets your deposit if you balk at the design center. And negotiating at the design center is highly unlikely in my limited experience. [If you want a discount on lot premium, closing costs and/or design center upgrades - you better have that in writing at contract before the deposit. And you won't get a discount on base price of the home, you can ask but it won't happen under normal circumstances.]

But if months later you decide you don't want the house when it's done for any reason (including it doesn't appraise), you lose your deposit and earnest money with either builder. One of them told me if you go crazy with upgrades, they will increase the earnest money (more than 25%), and I don't blame them. If a buyer walks away, he/she is losing a bunch of money - I'd hate to flush $14K, esp after waiting for months. But the builder has a right to protect themselves financially as they now have to inventory and sell "your" house with "your" upgrades to some other buyer who isn't getting to choose.

But I have yet to see or hear of a buyer who was legitimately surprised at the final closing cost.

Last edited by Midpack; 12-08-2018 at 02:35 PM..
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Old 12-08-2018, 02:22 PM
 
Location: Cary, NC
32,328 posts, read 56,544,084 times
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Quote:
Originally Posted by Midpack View Post
I can only speak from current experience on two builders.



I know of a builder that takes 1% down on the base price of the home and structural adds, and then an additional 20-25% earnest money on all the finish upgrades (floors, cabinets, counters, etc.). They will give you your deposit back if you balk at the design center, so you haven't lost anything - and they do not break ground until you've been through the design center.


OTOH I know of another builder who will keep your deposit if you balk at the design center.


But if you decide you don't want the house when it's done for any reason (including it doesn't appraise), you lose your deposit and earnest money with either builder. One of them told me if you go crazy with upgrades, they will increase the earnest money, and I don't blame them. If a buyer walks away, he/she is losing a bunch of money - and the builder has a right to protect themselves financially as they now have to sell the house some other buyer chose upgrades for.

1st builder doesn't start permitting process until you have finalized options?
2nd builder starts permitting as soon as you have completed structural chices that require permit, and will not allow structural change orders?
They have invested in the transaction and won't take a hit because a buyer changes their minds.

Just guessing, but an educated guess.
Make it easy enough, and people would tie up lots while kicking tires. Builders want to know that the buyer is serious.
If things get soft, builders may ease up on that. So, it is also a local dynamic, depending on local market forces.
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Old 12-08-2018, 02:27 PM
 
Location: Denver CO
19,840 posts, read 10,768,572 times
Reputation: 29264
Quote:
Originally Posted by charlygal View Post
I guess my point is that I am not a building expert. A round sink vs a rectangular sink is one thing. However, I (and most people) wouldn't know how to evaluate electrical work, HVAC, etc. Outside of hiring inspectors (which I plan on doing), how can the average person monitor good /bad work?

Seriously, I would be a little 5'2" woman walking around my building site trying to play it off like I knew what was happening.
My professional building inspector was a 5' tall woman who knew exactly what she was doing, and she got a lot of respect from the builder's site superintendent because it was clear to him during their conversations that she knew exactly what she was talking about. So that point is completely irrelevant.

But no one said you are supposed to be an expert. I caught things like something being done backwards and the dishwasher being installed on the wrong side of the island from what the plans said, and a closet in the master bedroom not being framed out - when I signed my contract, there was a second closet in the bedroom in the plans, they changed the plans later and took it out but I wanted it and made sure I got it since it was what I had agreed to. Basically, you should be familiar with what everything is supposed to look like, including any upgrades and options you picked out, and you can keep an eye on things to make sure all of that is being done as agreed to. You are the expert on that, because you are the one who should be very familiar with what's in your contract.

I had an inspector come in pre-drywall so she could look at the foundation, framing, electrical work, ducting, plumbing etc. right before the walls went up. She picked up on the water mixer for the master shower being installed backwards (which wouldn't have passed code anyway but she caught it first) and some items on the exterior of the house. Then she came back again about a week before closing to do the final inspection and did a standard inspection, more or less like it would be on a resale home. But she wasn't going through my contract to make sure all of my upgrades were in there, I was.
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Old 12-08-2018, 02:31 PM
 
Location: Denver CO
19,840 posts, read 10,768,572 times
Reputation: 29264
Quote:
Originally Posted by Midpack View Post
I can only speak from current experience on two builders, but it varies with just the two.

The first builder takes 1% down on the base price of the home, lot premium and structural adds at signing, and then an additional 20-25% earnest money after the design center (within 30 days) on all the finish upgrades (floors, cabinets, counters, etc.). So for example $4,000 on a $400K base+structural at contract signing, and $10,000 on $40K in upgrades after the design center - so $14,000 total invested. They will give you your deposit back if you balk at the design center, so you haven't lost anything - but they do not break ground until you've been through the design center.

OTOH the second builder keeps/pockets your deposit if you balk at the design center. And negotiating at the design center is highly unlikely in my limited experience. [If you want a discount on lot premium, closing costs and/or design center upgrades - you better have that in writing at contract before the deposit. And you won't get a discount on base price of the home.]

But if you decide you don't want the house when it's done for any reason (including it doesn't appraise), you lose your deposit and earnest money with either builder. One of them told me if you go crazy with upgrades, they will increase the earnest money, and I don't blame them. If a buyer walks away, he/she is losing a bunch of money - and the builder has a right to protect themselves financially as they now have to sell the house some other buyer chose upgrades for.

But I have yet to see or hear of a buyer who was legitimately surprised at the final closing cost.
Yes, the standard contract doesn't have much wiggle room in the way of contingencies, such as not appraising. But that doesn't change the contract price. Nor do upgrades, because you have to sign a contract with those upgrades in there.

I'm not saying there's not a risk of losing money if you want to back out of the deal (as there should be IMO), just that I don't understand how someone has a signed contract with a production builder and gets surprised at closing by having to pay a large sum that they didn't expect to pay.
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Old 12-08-2018, 02:52 PM
 
Location: North Texas
397 posts, read 163,939 times
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Quote:
Originally Posted by charlygal View Post
I guess my point is that I am not a building expert. A round sink vs a rectangular sink is one thing. However, I (and most people) wouldn't know how to evaluate electrical work, HVAC, etc. Outside of hiring inspectors (which I plan on doing), how can the average person monitor good /bad work?

Seriously, I would be a little 5'2" woman walking around my building site trying to play it off like I knew what was happening.
We got what its called a phased inspection through a private home inspector. They do pre-pour foundation inspection, pre-dry wall inspection and final home inspection. They actually make video of the whole inspection with documentation. You can also be on site with them if you'd like. We did it because it was more for a peace of mind for us plus you have documentation and video for the whole process when you're selling the house. You can assure the buyer the foundation, hvac, eletrical, plumbing were triple checked.

Last edited by Capitalprophets; 12-08-2018 at 03:01 PM..
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