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.
We built a new home in 1990, and we’re looking again but things have changed. It seems many/most non-custom new home builders have adopted a two step pricing system that makes it difficult if not impossible to know what the final bottom line price will be. You agree to buy a home and see the (attractive) base price, lot premium and any major structural changes (fireplace, covered porch, three car garage, bonus rooms, etc.) and sign a sales contract.
After you’ve signed the contract, then you go to a design center and find out the details of what is standard and what will be an upgrade. There are included feature sheets, but IME they are not complete at all, and of course there aren’t any prices. IME upgrades are typically $30-60K, and can reach six figures.
Silly me, I want to know exactly what I’m buying and exactly what it will cost before I sign anything.
I’ve gotten some price specifics which a couple of builders but there’s no way I can tell what other upgrade surprises I might encounter. And it makes negotiating any discount more difficult since you don’t know what costs are going to be.
How do I get a final firm price before signing? What are the best ways to handle this?
For those who say ‘just play hardball, and don’t buy,’ we are looking in cities with very hot RE sellers markets.
I realize discounts if any would come as upgrade deals, help with closing costs or maybe a break on lot premiums in a hot market.
But what I was asking was how to pin down what all the upgrades were going to cost. If you just play along with their MO, you won’t know what the upgrades will add up to, which IME would be $30-40K or more.
I realize discounts if any would come as upgrade deals, help with closing costs or maybe a break on lot premiums in a hot market.
But what I was asking was how to pin down what all the upgrades were going to cost. If you just play along with their MO, you won’t know what the upgrades will add up to, which IME would be $30-40K or more.
They will provide you with the structural options costs before you sign.
Get a design center preview.
Tour any finished product and look at the upgrades and effect on base price.
When you go to contract and go to the design center, take your time and make good decisions based on your budget.
And, be ready for a $175 faucet to become a $375 upgrade with no credit for the base faucet.
OP--this sounds exactly like the process we went through in 1990 with a large national builder. Until we signed a contract, etc. we didn't know what the additional costs would be for cosmetic upgrades.
You can know what the surprises will be. They've given you a feature sheet of what is included. They've also probably given you a list of possible upgrades. Understand that any upgrade will cost you $, probably too many $ in my experience. Builders tend to overcharge for those upgrades in tract houses.
Mike had a great suggestion--look at the price of the model and the upgrades included in the model. Compare to base price.
We have seen a nearly complete home (no price as it's already sold) and we got a complete itemized list of the same model being built for inventory (spec home) on another lot with all the structural options/prices, lot premium (another sort a flim-flam, as every lot has a premium - none are $0 premium), and 7 pages of upgrades chosen by their design center. What we don't know is what the other options are we could select, or what they might cost. We can choose level 1 cabinets, level 2 or level 3 and if we're really persistent we get those prices - but we don't get to really see or know what a level 1, 2 or 3 cabinet is! Just one example, there are seven pages of choices like that...
Maybe it's just me, but I wouldn't buy a car or anything else without having a firm final price before entering into a contract. Not sure how new home builders made this two step pricing an industry norm, but evidently they have as they're building houses (where we're looking) as fast as they can so buyers a lining up - or I'm the only dummy who hasn't figured out how to proceed. I've had to fight tooth and nail with two builders already to get any idea what our all up cost would be, and even then it doesn't seem there's any way we could know what it will all come to in the end...
BTW we have a realtor, and we've asked them what they can do to help, but they don't seem to be able to help with any of this.
And there is a somewhat general feature sheet, but there are all sorts of things not spelled out. For example, by chance we found out the standard bathroom sinks are cultured marble, and the standard bath & laundry flooring is vinyl - on a $400-500K home???
You could expand your horizons and look at existing housing stock and not new builds. If you can't find exactly what you want, you can certainly renovate.
OF course, the $0 premium lot was already sold. There was only one or two. Dog lots.
Keep it simple. The stress is too much for some people.
Buy a resale. Fix the price in the contract. What you see, and what you don't see, is what you get.
I got a full itemized price list from my builder. Yes, I had to do a bit of guesstimating on what the various levels were for the different levels, but I picked out something in the middle for each category as a baseline, figuring I was unlikely to want the very bottom, but I had control over whether I wanted to splurge for something at the top. I went through and marked off all the options I expected to pick out, saw that it would be within my budget and went ahead and signed.
Over the course of 4 visits to the design center (ok, yeah, I'm a bit of a control freak), I mixed and matched on my picks so I could stay within my budget. I ended up going 4K over my target but 6K under my max by mixing and matching in terms of going with a lower priced option on some things and a higher priced one on others. I ended up going up 2 additional levels on the cabinets to get what I really wanted, and so glad I did!
I also priced out every single thing in terms of what it would cost me to do myself (not actual DIY but having my handyman do it) and also went with the less expensive option on non-structural things. So for instance, they installed the furnace and ductwork and my handyman (who is also a certified HVAC installer) put in the central air unit.
But fwiw zero bargains, discounts, upgrades, etc. in my hot real estate market. They knew if I didn't sign the contract, someone would come along the next day who would.
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.
