Signed a contract on a new construction, having second thoughts (fit in, sales)

[TurtleCreek80]

Originally Posted by jcl_cls02

Not sure what your selections look like, but if they are not way off, I bet the builder can sell your home as a spec now. The sooner you let them know, I bet they can sell you another home.

This is good advice.

[LoveAussie]

You may just have some buyer's remorse, which is common to most people I know, and you may actually love the house and floor plan after you move-in.

Consult with several friends and ask for their opinions on the two floor plans and situations, if most of them said stick with your current floor plan, you'll feel much better.

[ZestyCharles]

I talked to my builder and they are not willing to let me transfer anything I've put down into a new house. It's just not something they will do. I went with a production builder, so it's no surprise. I will lose everything I've put into the house already, over $10k. I will walk away from the $20k in increased value. I will also have to pay $50k more for the floorplan I want than what my contract price currently is, plus put down another $15k this time on the new floorplan in deposits (more expensive because costs of everything have skyrocketed in the last 6 months, plus the deposits for my upgrades will be higher since there's significantly more square footage). So I'm looking at a difference of about $75k if I back out of the contract and re-sign a contract on the floorplan I want. I just don't have that kind of money to play with, and the entire contract price of the home isn't even above $300k.

Perhaps I do just have buyer's remorse, and it's a psychological thing. I do want that other floorplan, but I'm not going to go broke and sacrifice my financial goals to do it. My current floorplan will certainly work, and it's not bad.

Does anyone disagree that my best option at this point is to just take a deep breathe, accept what I have, and proceed with my contract and close on the house? I get I'm going to have to eat some transaction costs of buying/selling if I just sell my house after close and resign a contract on the floorplan I want, but at this point since the builder won't transfer any of my money, that's going to be significantly less than the $30k I lose in increase valuation plus deposits.

I also may end up loving my current floorplan and stay for years and years. Who knows.

[lovethisarea]

Originally Posted by ZestyCharles

I signed a contract on a new construction home in Celina (just north of the Tollway and 380) a few months ago. I am expected to close in August, so I still have time to ditch the contract and get out of the deal if I really wanted to.

The problem I'm having is this. I was overly conservative with how much home I could afford, and went with a floorplan that was about $30k cheaper than the floorplan that I really wanted. I was pre-approved for over $400k and went with a house just under $300k. I've been doing some thinking about it, and the extra $200 per month I'd have to pay for that $30k difference is really not a big deal - I'd much rather have the significantly larger square footage.

The next problem is this. Since I signed the contract, the price on my house has gone up by almost $18,000 (what the builder is charging for the floorplan), and other houses with my floorplan in my new neighborhood are going for $15k-$25k more than the price I'm going to pay since I locked in my price six months ago when I signed the contract. So I guess that means I potentially have somewhere around $20k in equity on my new house, and I haven't even moved in yet.

The final problem is that I've already dropped nearly $10k on deposits to the builder, and I highly doubt I'll get much of that back if I back out of the contract.

I'm kicking myself because I'm moving into a home that I don't really want - I was trying to buy the cheapest thing possible that worked for my needs when I signed the contract, rather than get what I really wanted. And now I'm having major second thoughts.

Is my best option to just live in the house for 1-2 years and then sell it and move into the house I really want? If real estate prices keep going up like crazy then I don't know if that's going to help me or hurt me at this point; while my property values will go up and I'll get more equity, it also means the house with the floorplan I really want is also going to go up (and it will probably appreciate in value slightly faster since it's a $30k more expensive house). I've really enjoyed going the new construction route, because I get to choose everything that works for me, so I'd love to do a new construction again, but this time with the floorplan I want. But in 1-2 years, I don't know if the floorplan I want is even going to be available in my neighborhood anymore.

How dumb would it be to just sign a new contract on the floorplan I really want after I close in two months, and then just end up living in my new house for the 8 months it takes between signing the contract and closing on the new construction house, sell it, and move into the house with the floorplan I really want? I get I'm going to get hit with some closing costs, but honestly you only live once, and I'd rather pay a little extra to be happy.

I've got enough money saved up that if I get burned on $10k it's not the end of the world. But I feel like if I back out of my contract now, I could get burned on $30k+ ($10k in deposits plus the $20k in equity I already have).

This is just my second house, so I'm not extremely experienced with home buying or owning.

Breath...

The best option: If the builder have an inventory home with the floor plan that you really like, they will gladly switch without you losing deposit. They are more motivated in clearing inventory. They can always add more upgrade to your current selection and sell it with higher markup later.
Second best: If you know someone who likes your floor plan, area etc. You can work with builder to cancel your contract refer a customer to them. If new customer is willing to pay new (higher) price, builder don't have anything to lose and you get your freedom to restart house-hunting.
Third best: You plead to builder to return your deposit and cancel contract. They are not in obligation to do so. But considering price increase in your neighborhood, they may do it anyway.
Fourth : Close on this house and re-assess the situation after 4-5 years when neighborhood is built out and you don't have to compete with builder.
Worst: Let go the deposit. Restart your house hunting in same or different neighborhood. You lose some money but gain freedom.

[jdallas]

Stay where you are. Odds are, those homes being built now will be hitting the market in about 3-5 years. By going with a production builder, you know there's going to be plenty of identical plans around the area so just tell your realtor which builder/model you want and they'll find it.

[ZestyCharles]

Originally Posted by jdallas

Stay where you are. Odds are, those homes being built now will be hitting the market in about 3-5 years. By going with a production builder, you know there's going to be plenty of identical plans around the area so just tell your realtor which builder/model you want and they'll find it.

The funny thing is that in my new neighborhood, the new construction houses are hitting the market sometimes less than a year after they are built. I guess people just don't stay in houses for very long anymore. There's even a couple houses sold by the owners in the past month that were just built less than 8 months ago.

I'm going to just stay put and proceed with the contract right now because it's the financially safe thing to do. If I move in and the home just really doesn't work for me, I'll talk to a realtor and explore what my options are and the costs of everything.

There's going to be a new phase opening up later this year which will have the floorplan I want, so I can always look into that.

[ImpartialBias]

Originally Posted by ZestyCharles

The funny thing is that in my new neighborhood, the new construction houses are hitting the market sometimes less than a year after they are built. I guess people just don't stay in houses for very long anymore. There's even a couple houses sold by the owners in the past month that were just built less than 8 months ago.

In a lot of cases, these aren't typical homeowners... they are investors. They put deposits down months or a year ago for a home that they knew would be going up in value as the builders starting charging more. Once the home is built, it gets sold and they pocket the difference. Then they move on and do it in the next phase being built.

[ZestyCharles]

Originally Posted by ImpartialBias

In a lot of cases, these aren't typical homeowners... they are investors. They put deposits down months or a year ago for a home that they knew would be going up in value as the builders starting charging more. Once the home is built, it gets sold and they pocket the difference. Then they move on and do it in the next phase being built.

They are not investors - the builder strictly prohibits investors from buying any of the new construction homes. When I signed the contract, I had to sign that I was going to use the house for a primary residence only. It's a planned neighborhood, so I guess they don't want a lot of investors coming in and buying up all the houses.

[Rakin]

Originally Posted by ZestyCharles

They are not investors - the builder strictly prohibits investors from buying any of the new construction homes. When I signed the contract, I had to sign that I was going to use the house for a primary residence only. It's a planned neighborhood, so I guess they don't want a lot of investors coming in and buying up all the houses.

Exactly. Many good builders have this restriction.

Keeps the neighborhood from being all rentals and hurting their sales.

[JTC Mom]

Originally Posted by ZestyCharles

They are not investors - the builder strictly prohibits investors from buying any of the new construction homes. When I signed the contract, I had to sign that I was going to use the house for a primary residence only. It's a planned neighborhood, so I guess they don't want a lot of investors coming in and buying up all the houses.

Just because you sign something saying you plan to use it as your residence they can't prevent you from selling it immediately after closing. Life happens, plans change, people sell houses they planned to live in. The builder cant prove otherwise...I'll bet there are some investors buying those homes