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buying a "to be built" home from the builder

any difference in mortgage type?
best way to find out actual taxes?
how detailed you have to get with the finishes to avoid $$$$ in additional unexpected upgrade fees?

anything else?

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Is this someone flipping a house or in a development

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development

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Scroll down to the thread i started a few weeks ago about new builds!!

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i knew i saw one but i thought it was way older and was being lazy LOL

Re: tell me about....

I just sold a "to be built" home to a buyer client.

You get the same type of loan -- my buyers obtained a conventional loan. It's not a construction loan or anything because you are not buying a property and then doing renovations/building yourself. When you close on the house, it will be a finished house.

It helps to have a lender who understands how new construction works, though. The timeline is obviously significantly longer than your typical sale (which would be 45-60 days from contract to closing).

And keep in mind that it will take longer -- almost always -- than the builder estimates. On my recent sale, we went to contract at end of February, with construction estimated to be done in September. It actually was done in late December and we closed Jan. 2! And the builder still had a "punch list" to finish up (minor things like installing a backsplash in the kitchen). So if you are on a tight time frame, keep that in mind.

Also keep in mind that you have to be very clear with the builder (when they show you other construction, model homes, etc.) about what is included in the price, and what is an upgrade. In my experience, buyers always add in lots of upgrades... sometimes needed. For a $949,000 base price house that is 3500 square feet, the builder allowed $6K for appliances (all). So clearly, they needed to add more into that budget. That's just an example.

With to be built homes, the positive is that you can customize things as you go (just make sure you like the builder and he is reputable). But on the negative side, it takes awhile and it can be overwhelming to make all of the choices.

And as mentioned in the other new construction thread, high taxes (that you won't know until post-closing) and the fact that everything is unimproved (you won't get a house with a finished basement, a deck, pool, etc.) have to be factored in.

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my brother and siser in law just moved into their built home... What a nightmare! I would never do it after watching what they went through. Not to mention the additional cost and the amount of $$$ they had to pay out of pocket for everything. And they were lucky that they had a good amount of cash in the bank - I don't know how people that don't have disposable income like that does it.

Everything was an upgrade.. everything. And who wants to build a new house with cheap floors, cabinets, molding, etc. Then they had to buy all of their appliances out of pocket , they gave an allowance but it was nothing compared to what you have to buy. Fridge, stove, dish washer, washer, dryer, etc.

They were living next door to the build bc they bought the land next to her dads house and they had to live with him bc the build took soooooooo much longer than they said (and they sold their house). And thank God they were right next door bc they caught so many mistakes as it was being done. From sloppy contractors to the driveway being poured for the wrong size. It was crazy. It was my sister in laws full time job having to stay on top of everything.

They didn't know their taxes unitl a few months after they closed.

Oh, and even with all the upgrades and out of pocket $ - the appraisal came back low so they were upset with that.

The other thing they always say is they didn't realize how much more you need to put into a built home. They are now in process of getting quotes for landscaping, a deck and even walkways and a patio in the back. By the time all is said and done - they could have bought a much nicer home with everything done for what they ended up paying.

Message edited 1/12/2018 11:07:04 AM.

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I have friends that did it. Aside from the additional upgrade expenses, they then had to pay for everything. Now less than 5 years later, the basement leaks and has mold, taxes are crazy high and everything around the house is just falling apart. It looks good from a distance but when you really look at things the workmanship is bad.