Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
basing the house on per sqft is kind of stupid. Doing so does not even take into consideration of the lot size!
This is not like buying a used car vs new car as cars depreciate. building a custom home could easily vary $20/sf not only that but take into consideration the headache of building a custom home dealing with the city, inspectors, subcontractors. Waiting a year before you can move in. If there was a brand new house for sale for the same price i could see your argument but really your analogy is more like:
I could buy this fully built practically brand new car with all the bells and whistles, but they want the same amount of money that i could go and buy all the parts and have someone build me the same exact car and if all goes well it will be brand new and about the same price.
You, yourself, said new homes sold in the past year at $170-175 sqft. This house is about a year old. Why would it not fit into the same quality construction price as the others? This isn't a new car where it loses value as soon as you drive it off the lot. This is real estate that appreciates in value as other homes of similar quality get sold for higher prices.
You don't buy a house dollar per sqft. That's the most uneducated way to purchase a house. That works in condo complexes where everything is the same shape and finish out and you're just adjusting for the view out the windows, higher up usually gets higher dollar for a better view. You buy a house based on how similar homes are selling comparing similar finish out, features, and location.
Right - this is exactly what I wanted to know.
Don't get me wrong - I am not trying to force these sellers to sell. They obviously want a premium for their home. We're over it and will most likely move on unless they budge. There are plenty of other nice homes in the neighborhood that aren't priced as if there's a gold-mine in the backyard =)
I guess I am just wanting to know for my benefit and for future reference so if we do run into the situation again I know what to expect.
I'm mostly just confused as to why they are only comping their house based on brand new construction, when there are plenty of equally nice existing comps to choose from - in the same neighborhood. I would understand if there are a lack of similar comps, and there were only brand new homes to comp from. But that's just not the case. My loan officer told me that some banks will sometimes not allow appraisers to use new home construction to appraise a home when the home in question is not new, and there are similar existing comps available. The price difference is sometimes too large. (Not sure if true, don't shoot the messenger).
I know that price/ft should be very loosely gauged, and I agree with that if there was a large range of home quality (higher income quality / lower income quality). You definitely cannot compare a 5000sq ft tract home with basic materials to a 5000sqft custom home with granite/marble everywhere, a sport pool, custom high end theater, gadgets and features galore, etc etc. But most of the differences in this neighborhood just come from style / buyer preference, floorplan, etc..., as they all have very similar quality of materials, features, and lot sizes are nearly all the same size (within .1 acre of each other).
basing the house on per sqft is kind of stupid. Doing so does not even take into consideration of the lot size!
This is not like buying a used car vs new car as cars depreciate. building a custom home could easily vary $20/sf not only that but take into consideration the headache of building a custom home dealing with the city, inspectors, subcontractors. Waiting a year before you can move in. If there was a brand new house for sale for the same price i could see your argument but really your analogy is more like:
I could buy this fully built practically brand new car with all the bells and whistles, but they want the same amount of money that i could go and buy all the parts and have someone build me the same exact car and if all goes well it will be brand new and about the same price.
Like I said, the lot sizes are a wash since they are all very similar in size, shape, etc. Obviously some houses face a different way, but I would chalk that up to buyer preference rather than a general rule. There aren't any major views or landmarks to make a lot better than another - they are all pretty darn close in that aspect, generally.
The analogy with the car was bad I guess. Cars are all mass-manufactuered with very subtle differences. Custom homes are custom built and very unique to each family / individual that is building it (for the most part). The main point was that these guys are pricing their home as if it was brand new, rather than a year or 2 old.
I just wanted to find out if it was normal to sell your 'non-new' house at the same price as if it were brand new.
Sounds like the price to build the homes is higher than the market value. So the builder makes money and the owner is stuck with a loss if they sell at market value. I personally wouldn't buy a new home where it was evident that the used houses were going for much less than purchase price. In my neighbourhood their is a custom builder and for the square footage the houses are way overpriced. Our agent advised us the resale market won't support those prices, when they later try to sell.
Sounds like the price to build the homes is higher than the market value. So the builder makes money and the owner is stuck with a loss if they sell at market value. I personally wouldn't buy a new home where it was evident that the used houses were going for much less than purchase price. In my neighbourhood their is a custom builder and for the square footage the houses are way overpriced. Our agent advised us the resale market won't support those prices, when they later try to sell.
In our area, new construction has been booming and really never stopped even during the downturn. It's true that new homes are typically more money than comparable resales but that is as it should be. They are newer with less wear and tear, better warranties, are built to the latest codes, are more energy efficient, and have fewer problems. The part you may not realize is that builders continue to raise their prices as the build out moves forward and each time the price goes up, the people who have already built in the same community see instant appreciation. Plus, as the price of new construction continues to climb, the resale prices in the area climb with them. At least that has been our experience but we are in a top ten best selling community in the nation.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
