Offshoot from another thread where a purchaser's new construction home did not appraise for the full purchase price, presumably in part because they put in a lot of upgrades.
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Someone made a comment that the buyer was lucky to get any upgrades included in the purchase price. That is very different from my experience when I bought new construction about a year and a half ago and I was curious what the norm was. Maybe it varies by location like so much in real estate does?
In my case, there was some percentage that if I went over, I would have had to pay anything above that in cash so it would have been factored out of the appraisal, but I didn't go over that percentage. All of my upgrades (including higher level cabinets, wood floors, custom tile work, upgraded carpet where I did get carpet, etc) all went into the purchase price. About 7% above the base price in what were considered "construction upgrades" - adding a basement, taking down a couple of walls, adding an extra bedroom. Tract builder so none of this was custom, they were options to the predesigned plan. Then another 12ish percent in design center options.
My house ended up appraising at about 8% above my purchase price, including all of the upgrades. That was actually not as crazy as it sounds as prices in the area were rising extremely quickly. But I also got a bit lucky in that the appraiser used some recent sales of homes from different builders whose homes admittedly sold for a bit more than my builder's did. But these were resales of slightly older homes and I think some of that distinction does fade away over time, and people no longer pay that much attention to the builder and it's more the size and condition and whatever upgrades an individual house has in comparison to other houses.
And it also helped that my neighbor upgraded pretty much *everything*, paid about 10% more than I did even after putting in what I considered a lot of upgrades myself, and closed before I did, so that was used as a comp as well as the model house which had sold by the time I closed and of course that was chock full of upgrades.
Just curious whether it's common for all of this to be part of the appraised value, or if it's more common for a new construction buyer to have to pay up front for all of this so it's not put into the mortgage or appraisal value.
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