COMPARING NEW HOME BUILDERS GIVES HOME BUYERS A LOT OF INSIGHT.
Going through the many model homes, previewing the floor plans and upgrades can be confusing to many new home buyers. However, there are many ways of judging value. One thing that I do is select a similar home style with approximately the same square feet, options and upgrades, lot sizes and features. Once the homes for each builder is designed, a simple price per square foot can be determined.
The buyers I toured with last weekend who toured about 9 new home builders in Loudoun County needed to focus on value and computing a price per square foot helps them understand that there is a lot more to understanding value than just the base price.
NEW HOMES IN ASHBURN VIRGINIA EXAMPLE.
Builder #1 - $198 per square foot
Builder #2 - $198 per square foot
Builder #3 - $180 per square foot
Builder #4 - $208 per square foot
Builder #5 - $170 per square foot
Builder #6 - $218 per square foot
It's interesting that the highest price per square foot is a local "niche" builder. It's difficult for small builders to compete with national well financed companies. Small builders do not have the purchasing power that a builder of "scale" can offer.
The lowest price per square foot is with a national builder that is offering a home with a lot of square feet and a significantly higher average base price. The final build-out price for this builder may push it out of our price range.
Touring new homes is fun. However, to help buyers come to good decisions, they need to understand value and that includes a lot more than the pretty kitchen.
Builders aren't offering much in the way of incentives these days because they are selling very well. That could all change when the "Spring Buying Season" ends and the "Summer Vacation Season" arrives.
That beautiful Granite Counter-top and Stainless Steel Appliances may be an expensive upgrade.
Courtesy, Lenn Harley, Broker, Homefinders.com , 800-711-7988, E-mail .
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Lenn- just stopping by to say thank you for commenting on my blog. I am not going to be able to return all the comments these days. You are very much appreciated.
Hi Lenn! That's a broad range ($170 - $218/SF) in pricing and you're right--no two are alike either! I do love the backsplash in the photo--very retro/hip! And, I DON'T want this spring buying season to END!
It is so interesting to see the price per sq ft in other areas. Our area looks down right cheap! even with granite counter tops and stainless steel appliances. Enjoy reading your blog... you do an excellent job with it.
Our area also is less per square foot, but, I am not familiar with your area. As usual I love the kitchen photo!
Lenn the little guy usually takes a beating because of not having the same buying power, but a lot of times he makes up for that in quality of work.
Builders can fool around with the cost per square foot price with extras like the Granite and other expensive options but will the buyer see the value. Looks like your buyer has lots of options.
Lenn,
Look at that! PHOTOS again! LOL
Mike in Tucson
Katerina. Thanks for stopping by. I don't know what I said, but. . . .
Debe. I don't want it to end either, but, . . . . . . it will.
Judi. Thanks. I love showing these homes.
Heather. Kitchens are a real hot button in my area.
George. Perhaps not. I have found that some of the largest builders here offer far better quality control.
Terry. I make sure to educate my buyers about the relative value between builders.
Mike. This post was done in Firefox. I don't like it and it's very difficult to work with when compared with the ease of IE. However, I didn't want to lose any more time. I'm glad it's fixed.
I spent 16 year in construction as a journeyman carpenter, foreman and eventually as a furniture builder. The range of quality in building is mind boggling. From the "beat it to fit, paint it to match to the very best imaginable. And pricing is not always apropos. Buyer always beware!
Lenn, thanks for the post. I do similar analysis for our buyers, but always include lot values and location adjustments also. Many buyers today would much rather have a completely tricked out home in a so-so location as opposed to doing a little work in a really great located home.
Russell. You are so right. The range of quality is very wide. Buyers often don't understand that they can expect "cabinet maker" anyplace except in the kitchen cabinets. That said, some builders offer a far better quality finish than others.
Gabe. I did, indeed, make adjustments for lot size, standard features and location. There is a full $25K difference in lot value between homes on the north end of Ashburn and the south end. Some of the homes in the list above are "Z"s and, as it turns out, the buyers didn't like them at all. Since that is the style in their price range, we had to move up to a higher price range to get any back yard at all. Their price was unrealistic for the home they expected to buy. They now understand after touring a lot of home sites and builders.
Lenn - It is hard for the small builder to compete with the big production builder who buys his materials in volume. The comparison is a good way for your buyers to keep things in perspective.
Lenn - very useful analysis. I find new home buyers can easily get swayed by the gorgeous model homes and forget about the comparative costs.Unless folks are willing to go a long distance there usually are only 1 or two builders in the price range to compare in our area. Do the homes in your area include landscaping or does that vary with the builder?
Jeff
Pam. That's where a smart buyer will work with an experienced buyers agent who has sold a lot of new homes, mmmmmmm.
Jeff. Right you are. The decorating helps the builder focus the buyers on the decorating and not value. I always compare value for my buyers.
Landscaping is always included. In fact, the county approves minimum landscaping when the permits are submitted. Some builders do offer more extensive landscaping packages than others. However, for development permits, minimum landscaping is necessary. These homes are all in subdivisions that have minimum landscaping requirements for all builders.
As the locations become more rural, less and less to no landscaping is required. Lawn covering is usually required throughout our area as "ground run-off" control.