Inventory vs New Build (credit, how much, new home)

[calien]

So what are the typical price differences (by %) when deciding on the same exact house, with one being an inventory home vs having one built?

For example, an inventory home is available now and we like it, but there maybe factors keeping us from getting it now. If we decide to build the exact same house in say 6 months, how much more would it cost, hypothetically. Talking about a new home listed at roughly $275K now.

Thanks for your inputs.

[chris_ut]

All I know is that inventory list prices are seriously inflated. For example we were building a house new for 230k but had to walk away, they dropped about 10k in our optional upgrades when they built it and they listed it at 260k. The house we ended up buying which was an inventory they had listed for 280k and we got it for 250k which was still probably 10k over but so it goes.

[Supermac34]

You will most likely get a better price on an inventory home than building on a contract. A builder, especially if the house has been sitting and they want to open up cash flow, will often make a good deal on an inventory house. They are not going to do the same thing on a contract to build.

[piyf]

Save the thousands and get an inventory home. And only buy if it's thousands less than the others in the neighborhood.

[Dopo]

Inventory is really bad for banks or builders.
It's money sitting there not doing anything, when they could easily have those $200,000 making money in a bank, stocks, mutual funds, etc.

That's why they tend to be cheaper.

[cheryjohns]

Both are over-priced - but inventory is a better bargain.

They only have lot value tied up in the ones not built yet. Inventory is sitting around costing them. They will negotiate a LOT better on inventory.

[ethanw]

Inventory is the way to go but it depends a lot on how hungry the builder is, and how many lots and house does the builder have siting around. Is very important to have your home work done and use it to you own advantage. When I got my house I started to negotiate on an inventory and see how far/low the builder can go. When we agreed on a price I switched on them last minute (or walk) and choose to go with a new build. It was a very dirty tactic in my part but we signed the contract that very hour. The fact that I was pre-aproved by the bank did help a great deal. End up paying $104/SF on what usually sells for $145/SF in that neighborhood. My wife never goes negotiating with me. She thinks I am ruthless... The way I look at it, if you don't try you never know... Besides you don't loose anything if you don't have any emotional baggage

[a_guerrajr]

Inventory, usually builder put nice upgrades in them and sell almost for base price.
Only draw back is the lot is usually a typical one, and that could be a deal breaker for people.

[HoustonRonnie]

Originally Posted by Dopo

Inventory is really bad for banks or builders.
It's money sitting there not doing anything, when they could easily have those $200,000 making money in a bank, stocks, mutual funds, etc.

That's why they tend to be cheaper.

That's not exactly true. The banks make a nice spread on the homebuilder line which is a better return than on stocks, bonds, and other holdings. Given the risk profiles and returns, the bank would rather have the money out on a homebuilder line of credit.

So, from the bank's perspective, it certainly isn't "really bad" and can't be dubbed as money just sitting there "doing nothing".

Just sayin'...

Ronnie

[d2mini]

Yes, you are most likely going to find a move-in-ready home for cheaper than one yet to be built, but builders are offering all kinds of deals on new builds, like premium lots and thousands of dollars in upgrades, all for under list base price. It has not been a good year for new homes. I'd rather get exactly what i want than settle for something to save a few thousand dollars. Our tastes never seem to match all that neutral stuff that is chosen to be put into spec homes.