New Homes & Vacation Homes - Q & A
Q: Is the price on new homes negotiable?
A: Developers claim that their prices are based upon the fixed construction costs, so attempting to negotiate the sales price with them may be quite difficult. It doesn't hurt to try though.
At the very beginning and towards the very end of a development project, experts say, is when builders are likely to be more flexible. Most developers, early on, want to move people in quickly so the project picks up momentum. When only a few units remain, developers become more incline to accepting lower offers.
Buyers commonly negotiate for better amenities (lot location, light fixtures, or carpeting upgrades) when negotiating the sales price doesn't work. Experts say, developers will rarely pass on a deal over a mere hundred dollars worth of carpeting.
Q: What are the benefits of owning a vacation home?
A: Some purchase a vacation home for investment purposes, while others buy them for weekend getaways. Tax benefits may come into play but check with your tax professional for more specifics.
Some vacation homes are bought by people with the idea of turning them into permanent retirement homes down the road, which puts them well ahead on their payments.
Another benefit of owning a vacation home is that the interest and property taxes are deductible. This helps offsetting the cost of paying for a second home. Vacation homes can become depreciated if you live in them for less than 14 days a year.
Resources:
* "Real Estate Investing From A to Z," William Pivar, Probus Publishing, Chicago; 1993.
* "The Ultimate Language of Real Estate,' John Reilly, Dearborn Financial Publishing, Chicago; 1993.
Q: What is the difference between new and previously owned homes?
A: There is a higher price tag on new homes than comparable existing homes, yet buyers are willing to spend more upfront for they understand that part of what they are paying for is low maintenance costs. Operating systems that make major repairs unnecessary, along with a builder's warranty, new roof installation, and appliances all work together to counteract possible slower appreciation initially.
Data drawn from the U.S. Census Bureau's 1991 American Housing Survey suggests that operating costs per house are lowest for brand-new homes, slightly higher for relatively new existing homes, and lower for older existing homes.
The largest component of operating costs are utility costs. The size of the home, its installation, the quality of its windows, the air leakage and efficiency of its furnace all determine the energy consumption per square foot.
Expenditures for both routine maintenance and major repairs are also included in the operating costs.
Q: What are the considerations involved when buying a new home?
A: When it comes to new-home projects builders have a target market in mind. Builders may tout communities as glamorous to the upscale urban professionals who are seeking amenities like golf courses, hot tubs and tennis courts. Swimming pools and playgrounds may be central to projects geared toward families while others may be geared for seniors because of a an easy-to-care-for yard and access to walking trails.
Avoid the temptation of moving into these so-called “glamorous” communities. Just because you might be able to afford the house does not mean you can afford the lifestyle.
Similar looking new houses often come equipped with restrictions imposed by the developer on house color, landscaping, renovations, and anything else homeowners are capable of doing to deviate the home from its preferred look.
In order to appeal to the buyer's tastes, marketing experts promote images for their developments. Form your own opinions. Don't buy into marketing schemes. You should only buy a home where you feel the most comfortable, after all, it is you who is going to have to live there.
Q: When it comes to new versus previously owned homes, what's the return?
A: When you buy into a new-home community it may across as being riskier than purchasing a house in a more established neighborhood, however, any increases in home value depend upon the same factors, The factors are; the quality of the neighborhood, the growth in the local housing market, and the state of the overall economy. A survey, completed by the national Association of REALTORS®, revealed that resale homes do in fact have an edge over new homes. The trade group's figures show that the median price of resale homes increased 3 percent between 1994 and 1995, compared to 0.8 percent for new homes within the same period.
