New Construction Homes vs Existing Homes

Many home buyers have questions about new construction homes versus existing homes. One such question was posted by David on Trulia’s Q&A section…

New and used prices on comparable homes, in my area, are the same (Northern VA). Are there advantages of buying an older home, besides immediate possession?

Here is my $0.02 on the subject (which is also the answer I posted on Trulia)…

The prices may be the same, but what you get for your money is not the same. You will pay a premium for having a new construction home over an existing home. Why? Because it’s new.

It’s similar to buying a car – you can pay about $45K for a brand new fully loaded Mercedes C350 or you can pay the same for an excellent condition, 4 year old, decent mileage S550. Some people will go for C350 while others will go the S550 – it’s personal preference.

Regardless of which you may think you would rather go for, you should check out all your options. Have your Buyer’s Agent get you all of the info on all new construction builders/communities in your price point in the areas you’re interested in. Have them take you to see the model homes (some builders have models located in communities other than the ones you’re interested in). Have your Buyer’s Agent give you a list of all the current builder incentives, lot releases, etc. And have your Buyer’s Agent give you the inside scoop on their and their clients’ experiences with each builder in the area whether it be a local or nation builder with local presence.

As far as advantages of one versus the other…new homes are just that, new. The new smell, the lack of wear and tear, you getting to choose where everything goes (i.e. outlets, ceiling fans, HDMI points), you getting somewhat of a choice of the look and color of cabinets, etc. You also get the builder’s warranty.

The disadvantages are that you have to deal with all of the construction around you until they finish the community, the switch of the HOA from the builder to the future HOA management, the settling of the house (i.e. nail pops, dry wall tape, etc) and what some say to be lesser construction and attention to detail than “how they used to build them”.

As for existing homes, the house has already settled and the previous owner(s) have more than likely addressed those issues. You may also find than an existing older home has been renovated with higher quality materials and looks better than a new home for the same price.

For example…your new home has builders’ “level 1″ granite, decent cherry cabinets, their standard hardwood floors and the typical builder secondary bathrooms choice of materials. But the resale home has really expensive and awesome looking granite, top of the line cherry cabinets and high-end, wide plank hardwood floors and the secondary bathrooms have been renovated with top of the line contemporary vanities including granite and cabinets, awesome and expensive tile work (floor and walls), top of the line fixtures/faucet, etc.

There’s more to it than just this, but this gives you an idea of some of the differences and just how much there really is to consider. If you would like to chat in more detail about the rest of the differences and what to consider, give me a call or email me anytime. I have worked with many new construction homes in Loudoun County and stay in constant contact with sales reps at all of the new (and future) new home communities and developments in the area.

P.S. This is David’s reply to my answer: “I really appreciate your comprehensive reply to the question I posted on trulia. I would like to talk with you more. I have been prequalified for a VA loan and am looking for a home in Western Loudoun County. Can we talk? 571-XXX-XXXX”

If those of you reading this would also like to speak in more detail about this, don’t hesitate to contact me.

-Danilo

Local New Home Sales Trump Rest of Nation

There’s the national new homes sales market. Then there’s the local new homes sales market. And they’re quite different from each other. The Washington, DC metro/Northern Virginia new homes sales market is ahead of the curve and doing much better than the rest of the nation.

There have been many articles and media coverage of how new home sales have slowed down. In some areas, new home sales have “plummeted” and “almost completely dried up”. Builder Magazine just ran an article, “New Home Sales Decline, Prompting Predictions of Worst Year on Record”, which paints a very gloomy picture of the new home market.

But that’s the national market. What about the local market here in the Washington, DC metro/Northern Virginia area?

Builders with developments/communities in this area saw the worst of the local new home sales market 3 to 5 years ago. Things started slowly turning around about 3 years ago. Then, as of about 18 months ago, someone lit a match under the new home sales market and the market took off.

For example, in speaking with several folks who are in the construction business, both builder employees and subcontractors, work finally began flowing about anywhere from 12 to 18 months ago. Rather than looking for side jobs to make ends meet, they’re working full time building homes across the DC metro/Northern VA area.

Another example is builder sales centers. Instead of a lot of green dots signalling open lots and sales reps throwing incentives at buyers as if they were confetti, there are red dots all over the site maps and incentives are few and far between.

And the attitude of builder sales reps is quite different… A look of despair was hard to hide a few years ago while smiles and positive attitudes are the norm nowadays.

The most impressive example is the actual number of new homes being sold and the success of communities and developments throughout the area. At the top of the list is Brambleton (Ashburn, Loudoun County, VA)…

In 2010, Brambleton set a record for the most new homes sold in its’ 10 year history. On top of that…Brambleton has sold more homes January through July 2011 than it did January through July 2010.

The thing that makes that statistic even more impressive is that Brambleton is made up of not just one builder, but 7 builders. And they all build different products and appeal to different home buyer personalities, incomes and demographics.

Why is this information important to consumers? Here are a just a few of the reasons…

1. If you are only reading national headlines, you may get a rude awakening when you walk into a new home sales center and try to negotiate 10% off the base price, get another $50K in incentives and put down a deposit on that awesome lot that was available last week.
2. You may not have believed your Buyer’s Agent when they told you something similar last week or even 18 months ago, but here’s the thing…they were telling you the truth.
3. If you’re a seller, you need to realize that you don’t have just your neighbors’ homes to compete with. You also have nearby home builders to compete with. Buyers are not just looking at existing homes – they’re also looking very closely at what home builders have to offer. And what they have to offer is often very enticing.
4. Builders know that they have the market on their side so you have to be even more careful when working and negotiating with a builder. You should have a Buyer’s Agent well versed in new construction on your side. Remember, a real estate agent’s/broker’s commission is a already written into the sales price. And no, you don’t get that commission refunded to you if you don’t have an agent/broker. So why would you not hire an agent/broker, pay the commission anyway and pad the builder’s pockets with even more profits?

If you have specific questions about the local new homes sales market, new home communities, builders or the new home purchase process in general, email or call me any time.

 

Camberley Homes, Boulevard at Brambleton Homesites Released

There has been much anticipation about Camberley Homes’ Boulevard at Brambleton community and the release of their homesites for sale. Well, the anticipation is over… Camberley Homes is releasing 8 homesites tomorrow, April 8.

They will have 8 homesites available – 4 Wilshire models, 2 Ventura models and 2 Lakeshore models. Base prices range from $390,900 to $410,900.

If you are interested in knowing more about Camberley Homes’ Boulevard at Brambleton Community, check out the community or purchase one, click here to contact me. I have helped a fair share of buyers purchase a home in Brambleton and would be happy to represent and guide you through the new home purchase process as well.

Related Reading

Why You Need Representation When Buying a New Home

Loudoun County, Brambleton; Record Level New Home Sales

Despite new home sales being way down as a whole across the U.S., Loudoun County, particularly Brambleton is seeing record level new home sales. In fact, Brambleton is the 8th top-selling community in the U.S.

Yes, you read that correctly (and no, this is not an April Fool’s joke).

Brambleton sold 352 new homes in 2010, the most new homes sold in one year in its’ 10 year history. On top of that, Brambleton is on pace to break that record in 2011 – and that’s without the first-time home buyer tax credit being available.

What’s so special about Loudoun County and Brambleton in particular?

- This area has always been ahead of the curve and leads the country by about 6 to 9 months. We were the first to see prices going up during the boom, the first to see them starting to come down and the first to see signs of stabilization and possible recovery.

- A large local presence of national and semi-custom builders who survived the market downturn and had money to start building once the local market showed signs of life in the second half of 2009 and into 2010.

- A shift in builders’ product lines. Builders are building more affordable and attractive products. This is drawing buyers in that were once priced out of the market and/or weren’t fans of the “same ol’” style of homes or huge McMansions. Yes, you can still find new traditional Virginia colonials/town homes throughout the area. But you can see and feel an urban touch to some of the new product lines and community amenities especially in Brambleton – one example is the Boulevard at Brambleton, by Camberley Homes.

- The local economy is one of the strongest in the U.S. This includes employment rates, new jobs being created and incomes. This helps create a strong housing demand and one that is stronger than most other parts of the U.S.

- Brambleton is a really cool, well thought-out and well built community (and their staff is dedicated and hard working). It has won GALA’s Community of the Year and countless other awards over the years. If you haven’t been to Brambleton in person, you should check it out sometime. (Contact me for a free tour of the Brambleton including the eight different builders within the community)

The rest of Loudoun County is in similar shoes. Other communities and builders are also selling new homes at a pace not seen for years, if ever. In speaking with builders’ sales staff and selling new homes throughout Loudoun County last year, I noticed that the sales staff had a smile on their face and positive attitude about them not seen since the boom market back in 2003, 2004 and 2005.

If you’re considering a new home but think that it’s out of your price range, you may be pleasantly surprised. As I mentioned, builders have revamped their product lines and price points. Give me a call or shoot me an email and I’d be glad to tell you what’s available in your price range throughout Loudoun County and show you around.

Related Reading

General information on Brambleton, LoudounScene.com

Camberley Homes, Boulevard at Brambleton Starts Selling This Weekend

Camberley Homes, Boulevard at Brambleton will officially open their sales office this Saturday, September 18, 2010. I stopped by last Saturday while giving home buyers a tour of Brambleton. We had a chance to spend some time with Mike, the sales manager and get more of the latest details.

To go into detail would be a looooooong blog post so I’ll give you the short “in a nutshell” version here – email or call me for the details.

Camberley Homes, Boulevard at Brambleton

- Base prices range from $370K to $403K depending on the model
- There are four different models to choose from
- Two car garages are standard
- Much different layout than typical town home buildings
- Camberley Homes is more willing to customize than most builders
- Delivery of the first building and town homes in Spring 2011 (April/May)
- Some 3 bedroom models can be made into 2 master bedroom models
- One model has a rooftop terrace (they may offer the terrace on other models in the future)

There’s a lot of information about Camberley Homes, Boulevard at Brambleton’s models and features online on their site and blog. But that’s only the tip of the iceberg.

If you would like more information or to set up a time to check out the sales center or get a tour of Brambleton, click here to contact me.

And if you haven’t read this blog post about buying a new construction home, click here to do so now.

First Ever Braxton Model by Stanley Martin Homes in Greene Mill Preserve

The first ever Braxton model by Stanley Martin Homes in their Greene Mill Preserve community is complete! Not only is this the first Braxton model by Stanley Martin Homes in their Greene Mill Preserve community in Leesburg…it is the first Braxton model they’ve built for any customer in the entire area. My clients will be settling on the property this Friday, September 18, 2010 and are excited to live in their new home that they’ve watched being built since February.

This particular Braxton model is Elevation E (reversed). This elevation comes with a wrap-around front porch, a specific style of windows and partial stone with a side-load garage.

This home is loaded with pretty much every structural option you can get including the bonus room with full bathroom above the garage and the 4th level loft with full bathroom. My clients decided to also finish off about 2/3 of the basement which includes a large rec room, bedroom and full bathroom. The unfinished space in the basement is being used as a large storage area, but you can easily finish off part of it into a media room, kids playroom or exercise room with plenty of space left for storage.

Remember how they say, “Looks can be deceiving”? This home has over 7000 finished square feet yet its footprint is not as large as most other homes with similar finished space. This is mainly due to the bonus room being above the garage and the 4th level loft which doesn’t add to the width or depth of the home. And personally…I’d rather have finished space than useless attic space.

Some of the best features of this home (IMHO) are…

- the kitchen area with large center island and room for several stools which opens up into the breakfast room, (future) deck, family room

- great use of square footage. Many larger homes have less usable space with lots of  “dead” space throughout the home

- option for bonus room and loft both with full bathrooms is excellent if you have teenagers who want their “own space” or family/friends that visit often and/or stay for a while

- the 2 car garage is actually a 2.5 car garage. You can easily have a workshop or store motorcycles, bicycles or lawn mowers in the side of the garage while having plenty of room to open your car door without hitting something. Plus, there’s an option for a 3 car garage.

- It’s not about the actual home itself, but it’s worth mentioning… The Greene Mill Preserve community is far away so you feel like you’re away from the hustle and bustle yet, it’s only about a mile from the Brambleton Town Center and a few miles away from major routes, downtown Leesburg, etc.

If you would like more information about the Braxton or any other model Stanley Martin Homes offers or the Greene Mill Preserve community in general, feel free to contact me.

NOTE: If you can not see the slide show in this post, click here to check out the photos on Flickr.

Brambleton New Home Model Home Map

Curious about new homes being built in Brambleton? Would you like to take a tour of the different builders’ models, but not sure where they are? Well, here’s a map of the various builder’s model homes and sales centers.

Note: Give me a call or email me before you check out the model homes so I can give you the inside scoop on each builder, models and their specific section within Brambleton.

Update on Camberley Homes, Boulevard at Brambleton

Here’s the latest on Camberley Home’s, Boulevard at Brambleton community in Brambleton, VA…

• They should start selling town homes this summer, probably in the beginning of July
• Base prices should start somewhere in the mid $300′s (prices and options are not set in stone)
• Construction should start sometime in November depending on how quickly Loudoun County approves permits, etc
• Delivery of the first town homes should be March/April 2011 if construction begins in November as planned (and the winter isn’t as brutal as it was last year)

If you would like more information about Camberley Homes and their Boulevard at Brambleton community, feel free to drop me a line – danilo.bogdanovic (at) gmail (dot) com – 703.582.6900 (cell).

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Camberley Homes is Bringing “Urban” Style Town Homes to Brambleton

Camberley Homes is Bringing “Urban” Style Town Homes to Brambleton

You can soon add Camberley Homes to the list of names on the Brambleton home builder roster. Camberley Homes will begin selling “urban” style town homes in Brambleton this spring. Camberley Homes is calling this their “Boulevard at Brambleton” community. Delivery of the first town home should be fall/winter 2010.

Here is some basic info…

• Models range from 1700 to 2200 square feet
• Option for a 4th level loft with terrace space/rooftop deck
• Rear load garage
• Contemporary and “customizable” floor plans
• Prices have not been released yet, but I’m guessing they will start in the high $300K’s to mid $400K’s based on square footage and the particular model

Camberley’s “Boulevard at Brambleton” town homes will be located directly across Ryan Rd (Route 772) from the Brambleton Town Center (see brochure below for map). Their location is very convenient to the Brambleton Town Center, Legacy Park and Brambleton Regional golf course.

Note: There are plans for a walkway across (or possibly below) Ryan Rd from where these and neighboring town homes and condos are located, but that’s still a ways out.

Check out the temporary brochure and floor plans (click here if you do not see the embedded document below)…

Camberley Homes building urban style town homes in Brambleton, Virginia –

If you are interested in getting more information about the Camberley town homes or any other new construction town homes in Brambleton, send me an email or call me – danilo.bogdanovic@gmail.com – 703.582.6900.

To search for existing homes for sale in Brambleton, click here.

Buying New Construction, Financing and Future Interest Rates

Here’s a three-part question recently asked by a new construction home buyer I’m working with… “If my new home won’t be ready until June, how will that affect my financing contingency, when can I lock in my rate and what happens if rates spike up between now and June?”

That’s a very good and important question.

To answer the first part of that question, your financing contingency depends on the what the builders’ contract says. In my clients’ particular case, the builders lender has 45 days from the date of ratification to find him a loan. If they can’t do so within those 45 days, they can extend that time period for another 30 days.

Notice that I highlighted “date of ratification.” Whether you settle in 30 days, 6 months or 9 months, the financing contingency usually starts when you sign the contract and it’s then signed by the builder’s rep.

But – and a very important “but” – if you were to do anything to adversely affect their credit, you could lose the financing contingency time period and could be in default (aka lose your $20K deposit).

To answer the second part of that question, the typical interest rate lock is done 30, sometimes 60 days before settlement. If you would like to lock it in for longer, you should check if it’s possible with your particular lender. Even if it’s possible, you will most likely have to pay a point(s) upfront to do so. (One point is equal to one percent of the loan amount)

If you’re 6 months out from settlement, you may have to wait 4 or 5 months before locking in your rate. Yes, that can be a gamble, but it’s the price you pay for buying new construction.

Which leads me to the third question…

Even if rates go up between now and when your new home is delivered, you may still be responsible for buying the property. And if you don’t move forward with the purchase, you may be in default and could lose your deposit.

Now before you take any of what I just wrote as gospel, let me give you the mandatory disclaimer: 

I am not a lawyer nor a loan officer/lender – this is not intended as legal advice nor guidance – every new home builder’s contract is different – every lender’s guidelines and offerings are different – check with your Buyer’s Agent/Realtor, your loan officer/lender and others for guidance.

***If you are interested in new construction in the Northern Virginia area, contact me before you head out to new home sales centers – danilo.bogdanovic@gmail.com – 703.582.6900. You need to have your own Buyer’s Agent representing and guiding you through the process. Remember – the builder’s sale rep works for the builder – NOT you. And your Buyer’s Agents/Brokers fees are already built into the sales price so it’s of no additional cost to you.

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