Great video! As someone who’s bought two new construction homes, I’m glad you mentioned all the extras costs people don’t think about. I would set aside money for shelving for closets, fences, appliances, window treatments, landscaping etc. Some companies will give you some of those things and some don’t. All those costs can easily set you back tens of thousands of dollars. Also, HOA fees can be high in a new construction community.
We choose new build because we were bidding on 280k-300k homes and was getting outbidded 20-30k over. A new builder here had Spec homes for 320k, we went into the office and put 10k deposit down. Our home will be done in august. So instead of getting a used home for 315kish we get a brand new efficient home for 320k, and egress windows in the basement so we can expand more sq ft in the basement in the future.
I guess im asking the wrong place but does anyone know a way to log back into an instagram account..? I stupidly lost my login password. I would appreciate any help you can give me!
@Kellen Leland i really appreciate your reply. I found the site through google and im trying it out atm. Seems to take quite some time so I will get back to you later when my account password hopefully is recovered.
Just bought a new construction called "Mira Vista" on the Bay Park/Clairemont border. I'm learning a lot but sure wish I had watched your video sooner!
Hi @realTLC, thank you for sharing your experience! Congratulations on your new home at Mira Vista, it sounds like an exceptional property. Always here to provide guidance and advice, should you have any real estate or mortgage related questions in the future. It's never too late to learn! Thanks for your support.
I just bought a new construction home. We were able to get the builder to throw in blinds, an AC unit, a fence and a garage door opener. We also got a 5.75% rate for using the builders preferred lender. What's great is that I'm spending the same amount of money on a new house with new everything vs spending the same amount of money and having to dump a ton of money on upgrades.
Thanks, Jeb, as always! I wholeheartedly agree every time you recommend buyers, and sellers, to work with real estate agents. From my experience, I'd add... highly qualified and experienced agents! And never a 'friend' agent! I learned that the hard way! What a nightmare that was; selling while out of state, using an agent who was a friend. Never again!
There are pros and cons to both and you look at everything from size to location and other things. My driving force to buy new construction was the way this market is. My price was locked in from the start. With all these investors, greedy sellers, and getting outbid by 30k, I decided to go new construction and cancel all the nonsense out. Much easier process
Thanks for the video! We just signed contract on one of the new construction home(still waiting for conditional loan approval), it was almost at the end process with only 10-11 units left and even though people were bidding but we got "selected" for our home without overpaying at the base price. They have pre-selected lots for floor plans and have already started construction before they release these homes - so I am guessing they have pre-ordered all of the stuff. We got his one for 440k and the current resale market we wouldnt be able to get the same home for even 480k.
This is why buyers need to review the purchase contract VERY carefully! They cannot raise the price unless they leave that option in the contract (usually in the form of an escalation clause). I just signed a contract for a home in Nashville and there are no such clauses so the builder has locked us in to the rate we signed for.
Say a builder includes escalation clause, can we ask them that they remove that prior to signing? I am thinking they will say no because the buyer right behind us will glady sign?
@@DregGayton777 you can ask them to remove it but there is a risk of them pulling the contract with you. I think the escalation clause is garbage and I have worked with a couple builders who never included it, so I would recommend going to another builder if they won’t take it out. Good luck!
The problem with a lot of new construction purchase agreements are that they are 100+ pages compared to a standard residential purchase agreement. Regardless you should know what you're signing.
@@JebSmith yes I agree! We signed (and pulled) a contract that was 60 pages long. I had my realtor ask the builder for a copy of the contract prior to meeting to sign so I could review the legal terms. That was helpful! Our second contract was 6 pages long. Not easy for them to hide it in there! I have heard horror stories of people having to pay higher prices after signing a contract. That’s shady!
Buying new all the way! I will not waste my time looking at so many homes and paying the appraisal gap! And going through the bidding wars no thank you!
Hi jeb we signed a contract for our new home and put down the deposit and paid for the extras already can the builder change the price? We signed the contract to buy the home 2 months ago please don't tell me he can raise the price now. Thank you karyann
In theory they shouldn't change the price but I have heard of builders doing it in this market. You're likely fine if they've already started the construction though.
I bought a new construction home in 2016 and put down a deposit and nothing extra for upgrades. I am reading now in 2021 you have to pay for the upgrades before had is this true?
First time homebuyer here. Question in regards to appraisal for new built houses. How does appraisal usually work for newly built? We noticed that the house beside us with exact same plan and size is 6,000 lower on the house that we purchased. We are only 1 month apart. Will our appraisal will still come lower and will compare to that house?
It's very similar to resale homes. They will use the comps in the development to help justify. I doubt the one next door is really going to affect you. New construction rarely has appraisal issues in my experience.
I notice that newer homes are starting to come with smaller lots. I have a 100 year old home that i have updated. When i look at newer homes with similar square footage, they generally have small lots. However, they are asking upwards of over $100k higher. It is strange.
can you sue the builder for breach of contract if they increase the price given both parties the buyer and the builder agreed on a price when the contract is signed ?
Love the videos Jeb, what would you consider as essential and nonessential upgrades in a new construction? I don't like the idea of paying for the "standard" only to get a contractor to rip it out. The design center seems extremely marked up, but I may be wrong.
The design center is definitely marked up and usually way less expensive to have someone come and do it after the fact but the big difference is you can finance it into the purchase through the design center whereas otherwise you are paying for it out of your pocket. Decisions decisions
Thank you for this info! Off topic question; could you tell me which camera you used to make this video? Your face is so crisp focused and looks like you're in the same room as I am! Thank you
I considered new construction back in January 2020. After being put on the list and waiting for months, our agent notified us that the builder is holding off on releasing more houses. They were holding out for higher prices. We actually haven’t heard back from them to this day.
I'm not surprised by this.......builders are in a tough place as many don't have a ton of projects in the pipeline (depending on area of course) and looking to maximize what they do have.......In addition, their costs are going up
Hi Jeb, love your vlog and watch every episode. I'm an agent in South Orange County and I was wondering if you have any recommendations for an AMAZING transaction coordinator in the area. Thanks in advance!
Off topic from video. But I had recently looked on the California Housing Finance Agency website and it appears there are some programs available for new buyers, and for owner occupant buyers that are not first time buyers. I saw a program that will pay up to 3 percent of closing costs with an 11,000 dollar cap for a sfr. Or. 3 percent with no cap on a sfr that has an ADU. As a lender how hard is it for you to tap into these types of programs. What are the pros and cons of tapping into these resources?
Most of what you are paying for in new construction is for the building (depreciating asset) over land (appreciating asset). Resale always makes more money.
@@JebSmith oh yeah.. this doesn’t always apply. Hong Kong is a great example of this. It’s almost impossible to build cost to exceed land price. Unless your building using melted Rolex steel...
My wife and I looked at some new builds in hour and a half away from San Francisco. The model we were interested in was being offered for $620,000 in December and it’s now at $670,00...
i’m an electrician, i’m building my own home soon, as in i will physically build it not pay someone to do it i don’t trust new homes made of cheap garbage materials and i don’t trust older homes that have had some ding dong house flipping handy man come in and “renovate” while cutting corners to maximize profits
Great video because I have been flip flopping between the two. Current homeowner in San Diego but not going anywhere for another 4 yrs but I like to plan ahead lol. Are these new construction homes being built in the masses structurally sound? I pretty much renovated 95% of my home and it’s a lot of work and headaches so am thinking new construction might not have those problems 🤷🏻♀️
Question for you! We are building a new home and we would like to know if we can rent out the house or we need to leave there for awhile before rent it out. We are paying 20 % down. Thank you! The builder is Taylor Morrison.
Assuming you told the lender you are purchasing as a primary home, you should live in it for at least a year before renting it out......that's essentially what you're signing as a primary home.
Obviously I’m not Jeb, but yes this can happen. We locked in our new construction for 836,000 and the same house is now 1 to 1.2 million. Our property taxes went up by 200 as of now and we were told it may be more.
It sounds like Tina addressed the question for me, hahaha. In CA or areas where property taxes are based on your purchase price that can't happen but in other areas it can so depending on how your state handles property taxes, watch out.
In my opinion, new construction isn't good as investment. With couple of hundred bucks per year you can buy a home warranty and bring down your risks with older houses. I think in SoCal, new construction can be up to 50% more expensive than the older buildings which may be damaged by the renter in the first couple of years.
I can’t stand what people do to their houses like painting walls crazy colors, hanging things all over the walls causing tones of nail holes, the funky smell they leave behind, installing ugly built ins, damaging the wood floors/carpets, destroying the lawn ect... So I bought new construction myself.
I am in contact with a new construction and the estimate completion date is in August with 1 month buffer. The base price is already high, about 60k more compared to the phase 1 homes which were sold about a year ago. With all options, ones selected at design center and ones already premented before I signed the contract I am about 20% above base price.
Great video! As someone who’s bought two new construction homes, I’m glad you mentioned all the extras costs people don’t think about. I would set aside money for shelving for closets, fences, appliances, window treatments, landscaping etc. Some companies will give you some of those things and some don’t. All those costs can easily set you back tens of thousands of dollars. Also, HOA fees can be high in a new construction community.
Thanks Tina.......All good stuff, many of which I forgot to mention.
We choose new build because we were bidding on 280k-300k homes and was getting outbidded 20-30k over. A new builder here had Spec homes for 320k, we went into the office and put 10k deposit down. Our home will be done in august.
So instead of getting a used home for 315kish we get a brand new efficient home for 320k, and egress windows in the basement so we can expand more sq ft in the basement in the future.
Awesome, congrats Zack.
I guess im asking the wrong place but does anyone know a way to log back into an instagram account..?
I stupidly lost my login password. I would appreciate any help you can give me!
@Kellen Leland i really appreciate your reply. I found the site through google and im trying it out atm.
Seems to take quite some time so I will get back to you later when my account password hopefully is recovered.
@Kellen Leland It worked and I now got access to my account again. I'm so happy!
Thank you so much, you saved my ass :D
@Aryan Ty you are welcome =)
Just bought a new construction called "Mira Vista" on the Bay Park/Clairemont border. I'm learning a lot but sure wish I had watched your video sooner!
Hi @realTLC, thank you for sharing your experience! Congratulations on your new home at Mira Vista, it sounds like an exceptional property. Always here to provide guidance and advice, should you have any real estate or mortgage related questions in the future. It's never too late to learn! Thanks for your support.
You are speaking ALL FACTS in this video. Thank you.
I appreciate that
I just bought a new construction home. We were able to get the builder to throw in blinds, an AC unit, a fence and a garage door opener. We also got a 5.75% rate for using the builders preferred lender. What's great is that I'm spending the same amount of money on a new house with new everything vs spending the same amount of money and having to dump a ton of money on upgrades.
Thanks, Jeb, as always! I wholeheartedly agree every time you recommend buyers, and sellers, to work with real estate agents. From my experience, I'd add... highly qualified and experienced agents! And never a 'friend' agent! I learned that the hard way! What a nightmare that was; selling while out of state, using an agent who was a friend. Never again!
Thanks Sharon, I always appreciate your comments and support.
There are pros and cons to both and you look at everything from size to location and other things. My driving force to buy new construction was the way this market is. My price was locked in from the start. With all these investors, greedy sellers, and getting outbid by 30k, I decided to go new construction and cancel all the nonsense out. Much easier process
very informative - Thank you for putting efforts for the community and buyers
🙏🙏🙏
Great information! Thank you
Thanks jeb
🙏
Thank you for this video!!
You are so welcome! Hopefully it was helpful.
@@JebSmith yes!! 🙏
That is crazy to hear about no set base prices. Ugh 😩 this sucks when it comes to buying houses.
Great advise Jeb!
Thanks Mark.
Thanks for the video! We just signed contract on one of the new construction home(still waiting for conditional loan approval), it was almost at the end process with only 10-11 units left and even though people were bidding but we got "selected" for our home without overpaying at the base price. They have pre-selected lots for floor plans and have already started construction before they release these homes - so I am guessing they have pre-ordered all of the stuff. We got his one for 440k and the current resale market we wouldnt be able to get the same home for even 480k.
Nice. Congrats.
This is why buyers need to review the purchase contract VERY carefully! They cannot raise the price unless they leave that option in the contract (usually in the form of an escalation clause). I just signed a contract for a home in Nashville and there are no such clauses so the builder has locked us in to the rate we signed for.
Say a builder includes escalation clause, can we ask them that they remove that prior to signing? I am thinking they will say no because the buyer right behind us will glady sign?
@@DregGayton777 you can ask them to remove it but there is a risk of them pulling the contract with you. I think the escalation clause is garbage and I have worked with a couple builders who never included it, so I would recommend going to another builder if they won’t take it out. Good luck!
The problem with a lot of new construction purchase agreements are that they are 100+ pages compared to a standard residential purchase agreement. Regardless you should know what you're signing.
@@JebSmith yes I agree! We signed (and pulled) a contract that was 60 pages long. I had my realtor ask the builder for a copy of the contract prior to meeting to sign so I could review the legal terms. That was helpful! Our second contract was 6 pages long. Not easy for them to hide it in there! I have heard horror stories of people having to pay higher prices after signing a contract. That’s shady!
Buying new all the way! I will not waste my time looking at so many homes and paying the appraisal gap! And going through the bidding wars no thank you!
Understood, in some markets new construction is also going with a highest and best.
I really enjoy your content! Thank you so much! New realtor in Denver just got started last year! It’s crazy here too!
I have a question. So when a house has been renovated/rehabbed, does that mean new piping and new wiring also?
Not always but in many cases the answer is yes but that's why you need an inspection.
@@JebSmith ok cool. Thanks for answering cause I have been very confused 😂
Hi jeb we signed a contract for our new home and put down the deposit and paid for the extras already can the builder change the price? We signed the contract to buy the home 2 months ago please don't tell me he can raise the price now. Thank you karyann
Same situation here but should be done in July
In theory they shouldn't change the price but I have heard of builders doing it in this market. You're likely fine if they've already started the construction though.
I bought a new construction home in 2016 and put down a deposit and nothing extra for upgrades. I am reading now in 2021 you have to pay for the upgrades before had is this true?
Yes you can put your extras on your loan if you want. My husband and I did not want a bigger mortgage that's why.
This is crazy, the house that l wanted to buy last year summer was 350,000,Now l paid 450.000 singlehome, , in new jersey, new construction ,
I'm hearing a lot of that right now.....hopefully you're able to get in.
Yes, because l was first person on the list,
First time homebuyer here. Question in regards to appraisal for new built houses. How does appraisal usually work for newly built? We noticed that the house beside us with exact same plan and size is 6,000 lower on the house that we purchased. We are only 1 month apart. Will our appraisal will still come lower and will compare to that house?
Yes, I’m wondering the same:-)
It's very similar to resale homes. They will use the comps in the development to help justify. I doubt the one next door is really going to affect you. New construction rarely has appraisal issues in my experience.
I notice that newer homes are starting to come with smaller lots. I have a 100 year old home that i have updated. When i look at newer homes with similar square footage, they generally have small lots. However, they are asking upwards of over $100k higher. It is strange.
can you sue the builder for breach of contract if they increase the price given both parties the buyer and the builder agreed on a price when the contract is signed ?
Love the videos Jeb, what would you consider as essential and nonessential upgrades in a new construction? I don't like the idea of paying for the "standard" only to get a contractor to rip it out. The design center seems extremely marked up, but I may be wrong.
The design center is definitely marked up and usually way less expensive to have someone come and do it after the fact but the big difference is you can finance it into the purchase through the design center whereas otherwise you are paying for it out of your pocket. Decisions decisions
Love this 👏🏻
Thank you.
Here in bay area new properties don't have backyards.
I get it......many here in my market don't as well.
Would you consider a third party inspection for a new home?
Yes.....absolutely.
What about building new construction on non-HOA land community?
Thats a possibility but most of those homes would be custom as most tract housing these days has some sort of hoa.
@@JebSmith yeah that’s what I have under contract now. It’s 15 homes in our area, we are all new build on non-HOA land. Any cons with this?
I was told 6 month build time now their talking 10 months and that’s not even guaranteed 🤦🏻♂️
I'm hearing a lot of that right now.
Thank you for this info! Off topic question; could you tell me which camera you used to make this video? Your face is so crisp focused and looks like you're in the same room as I am! Thank you
You're welcome. I use the Sony a7iii.
I considered new construction back in January 2020. After being put on the list and waiting for months, our agent notified us that the builder is holding off on releasing more houses. They were holding out for higher prices. We actually haven’t heard back from them to this day.
I hate all those néw cookie cutter homes. They all look the same l. No character
No way... I filled out an interest card in CA too for a builder home in January. I was told I would get a call back in June/July.
I'm not surprised by this.......builders are in a tough place as many don't have a ton of projects in the pipeline (depending on area of course) and looking to maximize what they do have.......In addition, their costs are going up
Hi Jeb, love your vlog and watch every episode. I'm an agent in South Orange County and I was wondering if you have any recommendations for an AMAZING transaction coordinator in the area. Thanks in advance!
Yep, send me an email at jeb@jebsmith.net and I'll connect you with mine.
Off topic from video. But I had recently looked on the California Housing Finance Agency website and it appears there are some programs available for new buyers, and for owner occupant buyers that are not first time buyers. I saw a program that will pay up to 3 percent of closing costs with an 11,000 dollar cap for a sfr. Or. 3 percent with no cap on a sfr that has an ADU. As a lender how hard is it for you to tap into these types of programs. What are the pros and cons of tapping into these resources?
Most of what you are paying for in new construction is for the building (depreciating asset) over land (appreciating asset). Resale always makes more money.
I wouldn't say always but in many cases you're correct. It all comes down to location.
@@JebSmith oh yeah.. this doesn’t always apply. Hong Kong is a great example of this. It’s almost impossible to build cost to exceed land price. Unless your building using melted Rolex steel...
My wife and I looked at some new builds in hour and a half away from San Francisco. The model we were interested in was being offered for $620,000 in December and it’s now at $670,00...
I'd be looking elsewhere then lol
Pretty normal right now because of the supply and demand.
i’m an electrician, i’m building my own home soon, as in i will physically build it not pay someone to do it
i don’t trust new homes made of cheap garbage materials and i don’t trust older homes that have had some ding dong house flipping handy man come in and “renovate” while cutting corners to maximize profits
Great video because I have been flip flopping between the two. Current homeowner in San Diego but not going anywhere for another 4 yrs but I like to plan ahead lol.
Are these new construction homes being built in the masses structurally sound?
I pretty much renovated 95% of my home and it’s a lot of work and headaches so am thinking new construction might not have those problems 🤷🏻♀️
Yes, they are structurally sound.......They are building them faster but still having to follow building codes.
Question for you! We are building a new home and we would like to know if we can rent out the house or we need to leave there for awhile before rent it out. We are paying 20 % down. Thank you! The builder is Taylor Morrison.
Assuming you told the lender you are purchasing as a primary home, you should live in it for at least a year before renting it out......that's essentially what you're signing as a primary home.
Hey Jeb is it possible property taxes on a new construction can skyrocket because of home prices going up in the same community and area?
Obviously I’m not Jeb, but yes this can happen. We locked in our new construction for 836,000 and the same house is now 1 to 1.2 million. Our property taxes went up by 200 as of now and we were told it may be more.
It sounds like Tina addressed the question for me, hahaha. In CA or areas where property taxes are based on your purchase price that can't happen but in other areas it can so depending on how your state handles property taxes, watch out.
Me and my Wife were just talking about this. You must be psychic LOL
Hahaha, been getting this question a lot. Hopefully it's helpful.
In my opinion, new construction isn't good as investment. With couple of hundred bucks per year you can buy a home warranty and bring down your risks with older houses. I think in SoCal, new construction can be up to 50% more expensive than the older buildings which may be damaged by the renter in the first couple of years.
@michael h because you can't afford it.
I can’t stand what people do to their houses like painting walls crazy colors, hanging things all over the walls causing tones of nail holes, the funky smell they leave behind, installing ugly built ins, damaging the wood floors/carpets, destroying the lawn ect... So I bought new construction myself.
Hahahaha, I get it.
I am in contact with a new construction and the estimate completion date is in August with 1 month buffer. The base price is already high, about 60k more compared to the phase 1 homes which were sold about a year ago. With all options, ones selected at design center and ones already premented before I signed the contract I am about 20% above base price.
that's not abnormal. Assuming there's another phase then they'll likely be even higher.