To build or not to build? This question finds itself on the mind of so many of our clients. As an experienced agent working alongside new construction buyer clients as well as the typical buyer client, we can show you both pros and cons, but the decision is ultimately up to you and your bank account. There are many variables involved with new construction, and many unknowns when jumping into a renovation, so it’s always important to make sure you are working with a buyer’s agent who is knowledgeable of the building process. Amidst the chaos of buying a home or building, the one constant, however, just so happens to be the outcome. At the end of the day, whether you build, renovate or buy, everyone… well almost everyone, finds fulfillment and peace in their home sweet home.
Let’s build a house!
Generally speaking, if you want to go the new construction route, buying an established lot with a plan and builder already in place, will equate to standard financing, faster approvals and a smoother transaction. On the other hand, if you are thinking of buying a raw piece of land and then building a custom home with the help of a construction loan and a hired builder, just know that most banks may not even finance the land without engineering, town building approvals and or a home plan/construction loan in place. That being said, it’s important to understand the upfront costs associated with a new build. So whether you buy the land raw or purchase a home to be built, you can assume you will need a hefty amount of cash ready to purchase upgrades and or to float construction costs between loan installments. I could go on and on about the logistics of new construction, but I think I’ll spare you the nitty gritty for now. Should you like to explore your options with building, please don’t hesitate to reach out to one of our experienced and knowledgeable CHR agents for a detailed explanation of the process depending on your desired route.
So, you’ve nixed the new construction fantasy and you’ve decided a home in need of some repair is more your style. This option is certainly the green route of the spectrum and we absolutely love a good renovation at CHR. Our advice to those looking to become the next “rehab addict”, is to watch your wallet and understand the value added per each project. It’s certainly wise to consult with your agent before making any major renovations especially if you intend to sell within the next few years. To this I mean, don’t go installing a fifty thousand dollar kitchen in a 1500 Sq Ft property located in an area with low to moderate priced homes. You want to make sure that your renovations are in line with the neighborhood. In other words, it’s never in your best interest to be the nicest home on the block. The theory behind this, is.. well basically, you will never fully make your money back and the definition of investment will get lost in that gorgeous WOLF range. Don’t get me wrong, your home will definitely sell quick and most likely for top market value, but no more than an appraisers highest local comp. However, if you are looking to stay in the property for a lifetime, we say, go for it! As long as you intend to thoroughly enjoy your newly renovated property, and you don’t plan on selling anytime soon, go ahead and “over improve” all you want. Who knows? Maybe one day the neighborhood will catch up in terms of value.
Let’s just buy it and move in!
After exploring all of your options in regards to your next home purchase, you’ve decided to buy a property that’s move in ready. By that I mean, not a thing to do, but park your furniture and take off your shoes. Basically, if knocking down walls intimidates you and dust in the air creates anxiety, this will be your best bet. It’s important to remember, however, that your move-in ready property will not save you any money and you’ll likely need to offer over asking if it’s strategically priced on the low side. When buying in a sellers market (low inventory and high demand), this type of property will almost always go for top market value or sometimes even more. Once your home search begins, you’ll want to hit the ground running with an iron clad pre-approval from a well known lender. This way, when you find a great home, your buyers agent can get your offer submitted ASAP. Remember though, there is always the chance your offer is outbid or pushed to the side due to another “perfect” offer consisting of a cash purchase, above asking offer, or an offer without appraisal or inspection. Don’t worry though, the perfect house will find you even if it takes a few missed offers. Again, this is based on the demand of the specific property and will not always be the case. Generally speaking we are only seeing this type of activity with move-in ready properties in a hot market location. Don’t fret though, if your offer isn’t accepted, just keep searching and eventually the perfect home will find you.
This bring me to the importance of hiring a buyer’s agent knowledgable of the local markets. This is essentially a no brainer! At no cost to you (Sellers broker pays buyers agent), your agent will ensure all language, contingencies, dates and deposits sit well with the sellers. Whether you are looking to build a home or buy a home, it’s important to have an informed agent to represent you from beginning to end. Contact one of our knowledgable agents today and let us help you find your way home!