Design Center Drag... (Wylie: sales, mortgage, how much)

[lovethisarea]

I have bought new home in past NC and that builder did not require visits to "design center". Basically the builder's agent will show some sample and note down selections before writing up contract all in the on-site temporary office. In NC also some builders had practice of sending buyers to DC before construction began but luckily we didn't have to go through that.

So here we sign contract to construct new home in Wylie and first step is to go to DC and select options. Seriously!!! They require buyers to go to a far flung place taking 6 hours off from their work to select options. As we are very functionality focused, we did not select many "design" upgrades. But the lady attending us at design center told us that usually people select about 10% of house price in upgrades. That to me seems very high but what do I know...

So question to locals and experts: How much folks really spend here on upgrades while constructing house from mid-level builders? I understand from top notch builder you don't have to upgrade much.

Also is it just me that finds whole trip to DC a drag?

[shrapr]

.....

[nissan]

We had 3 appointments at the DC, total of 10 hrs. We love this kinda stuff, but admit it was taxing after the 1st one. We spent ~12% of the base at the DC, but the home is over 4.5K sq ft, so it wasn't really overboard. We're still doing some things after close bc either the builder didn't have something we liked (granite) or the pricing was ridiculous ($3K for a backsplash which we'd done in our prior home w same materials, sq ft and labor at $1.2K).

This is w a upper mid tier builder here. We put in what we liked (hardwoods) and would be hard to do later for any real cost savings (e.g. jets in shower). IMO w money as cheap as it is, it's better to splurge a little and amortize over 30 yrs than regret it and end up doing it cash out of pocket 3 yrs down the road.

[lovethisarea]

Originally Posted by nissan

We had 3 appointments at the DC, total of 10 hrs. We love this kinda stuff, but admit it was taxing after the 1st one. We spent ~12% of the base at the DC, but the home is over 4.5K sq ft, so it wasn't really overboard. We're still doing some things after close bc either the builder didn't have something we liked (granite) or the pricing was ridiculous ($3K for a backsplash which we'd done in our prior home w same materials, sq ft and labor at $1.2K).

This is w a upper mid tier builder here. We put in what we liked (hardwoods) and would be hard to do later for any real cost savings (e.g. jets in shower). IMO w money as cheap as it is, it's better to splurge a little and amortize over 30 yrs than regret it and end up doing it cash out of pocket 3 yrs down the road.

I am with you on spending through mortgage than cash considering lower interest rate. But we don't give much consideration to the style and looks. But we are big on functionality as the house must need all our needs for living from space to comfort.

[Johnhw2]

Builders get a 50% increase to their profit on upgrades. The profit on the base home is around 20% of the base home cost. Upgrades are more like 80% profit margin., if you spend 10% on upgrades, that's 18% profit on home price with upgrades from the base profit margin and 8% on the upgrades for a total profit margin,of over 26% of sales price.

If you can cut the after market profit margin on upgrades to 50% and can fund them outside the mortgage there are big savings to be had.

[jdallas]

I have a friend who worked in a top-10 national builder design center. She made commission based on certain upgrades so they aren't exactly unbiased when recommending you upgrade materials. That said, I'd recommend you not buy into the 'what most people pay' game and just focus on what you want for your house and not what some future buyer may or may not want.
As far as the 6 hours of your time, you might want to plan on a lot more of that time checking on the construction progress especially if you have made changes to the plan to suit your own functionality desires. The crews blast through those plans and it's quite common for mistakes to happen.

[unknown00]

As an investor/builder, I actually like the process. The worst part is the "wait for city to approve building permit before build"

When I invest and go to the DC, I just get the cheapest/standard of everything, it's real quick.

When I'm buying for a close friend/family/self, we spent usually ~4ish hours at the DC and spend ~$20k. I've never had a close friend/family spend less than $10k and no one has spent more than $25k. A lot of the upgrades you can do for cheaper yourself

[4Movingeast]

Originally Posted by lovethisarea

I am with you on spending through mortgage than cash considering lower interest rate. But we don't give much consideration to the style and looks. But we are big on functionality as the house must need all our needs for living from space to comfort.

You may not care, but think about resale! I'm not saying you should splurge for latest and greatest but a cohesive color scheme and some proven upgrades (hardwoods, stone or other solid surface counters, high end cabinets/millwork) make your home so much more attractive. If you are building new in a desireable area with a good school district for Pete's sake- don't worry about the dime over the dollar and do it right.

[lovethisarea]

Originally Posted by Johnhw2

Builders get a 50% increase to their profit on upgrades. The profit on the base home is around 20% of the base home cost. Upgrades are more like 80% profit margin., if you spend 10% on upgrades, that's 18% profit on home price with upgrades from the base profit margin and 8% on the upgrades for a total profit margin,of over 26% of sales price.

If you can cut the after market profit margin on upgrades to 50% and can fund them outside the mortgage there are big savings to be had.

Wow!!! Great insights...

Many upgrades seem way too expensive...

[lovethisarea]

Originally Posted by jdallas

I have a friend who worked in a top-10 national builder design center. She made commission based on certain upgrades so they aren't exactly unbiased when recommending you upgrade materials. That said, I'd recommend you not buy into the 'what most people pay' game and just focus on what you want for your house and not what some future buyer may or may not want.
As far as the 6 hours of your time, you might want to plan on a lot more of that time checking on the construction progress especially if you have made changes to the plan to suit your own functionality desires. The crews blast through those plans and it's quite common for mistakes to happen.

Thank you. I will watch out during construction. Aren't they obliged to build per signed plans? If crews make mistake and deviate from plan, will builder take responsibility to fix it (without extensive legal battle)?