New Housing Developments

New houses are, as you might expect, more expensive than resale homes, all other things being equal. Still, with a new home you can have all the space you need. It can be as light and bright as you want. New also means cutting-edge technologies. According to the National Association of Realtorss, 23 percent of buyers purchased a new home in 2007, while 77 percent bought an existing (resale) home.

Table 10.1 New and Previously Owned Homes Purchased by Region

Source: National Association of Realtors Profile of Buyers and Sellers 2007

You might want to consider purchasing a new house in a development. With some careful shopping, you might even be able to strike a price deal for yourself.

How to Find an Affordable New House

Start by looking beyond the city limits, and most likely beyond the suburbs, too. You will get a better deal on homes way, way out, where the developer has not paid astronomical rates for land. Where such homes are situated is vitally important. Part of the attraction of such developments is their price. They are likely to grow into larger communities over time, but you will probably want a reasonable number of existing services there now. Are there schools, stores, houses of worship, and recreational amenities, or will you be a true trailblazer?

Don't buy the flashiest house on the street, even in a new development. Keep in mind that it is not just the house itself, all new and shiny, but the total picture that makes for a successful home purchase. Look at your lifestyle to see if you might be sacrificing too much to own a new house.

You may be in for a long commute to work if you buy in these areas. Does the area have easy access to highways? With new developments, too, you are less likely to have large trees for shade and privacy.

Here's another suggestion for finding affordables. Look for the innovative builders in your area who specialize in quality, medium-cost construction. A call to your statewide builders association can bring you their names, as well as some addresses for you to check out.

When looking at new construction, beware — just as you would in a traditional neighborhood — of buying the largest, most expensive house in a development. Look instead at the mid-priced or lower-end models. The value of the lower- and mid-priced homes will be pulled up by the splashier ones around them. The only exception would be a community that stresses recreational amenities, where being right on the golf course or lake makes for the top-of-the-line location, and a future buyer would be willing to spend extra money to acquire. Pick the home with the best view of what the community has to offer.

Before purchasing any home, regardless of age or whether it is newly constructed or just been renovated, have it inspected by an experienced, certified inspector. Don't allow the beauty of a home or the fact it has just been built by licensed contractors mislead you into thinking the home doesn't have significant defects.

Negotiating to Sweeten the Deal

Developers do not usually like to lower the sales prices of their homes. However, the state of the economy (both national and local), the developer's finances, and other factors could make any developer more amenable to discussing it.

The trick here is to keep cool. As with other types of negotiating, it is not a good idea to seem too excited about what someone is trying to sell you. “Oooh” and “aaah” too much, and the builder or the on-site sales agent is going to think, “This one is hooked,” and there go your bargaining chips.

When a community is essentially finished and running smoothly, a developer may well want to close out that complex as quickly as possible. If there are two or three houses that remain stubbornly unsold, a developer might lower their prices. Occasionally, the model home might be sold that way, although it could also be sold early, with the deal not formally enacted until the developer is prepared to close down sales. The developer who has many unsold homes is also likely to be amenable to some negotiating. It costs money to carry empty houses.

Many new single-family home communities these days open with formal homeowners' associations in place. New residents must join the association and pay annual dues. The dues go toward maintaining the entrance and any other products or services residents want.

In the off season for homebuying — generally, October through January or February — when developers are drumming their fingers on desktops in sales offices, you will also be very welcome, and all of the stops might be pulled out to keep you from looking elsewhere.

More likely than a price cut is negotiation over what will be included in a sales price, which will stay firm. All the little extras can add up, and it is up to you to ask for them. Perhaps a house is selling for $125,000, and you know you want to spend another $6,000 for the decorating features you want. If you get $3,000 from the developer in the form of extras, that is $3,000 you won't have to spend.

Analyze all concessions the developer offers you. Some may be a good value; others may not stand up to the figures run up on your pocket calculator. Perhaps you can secure a commitment from the developer to pay your first year's real-estate taxes or part of the closing costs. Always ask. You cannot expect goodies to be offered to you out of the blue.

Be careful, though, with frills. If the builder says, “I'll cut the price by $5,000 or give you $5,000 in credit you can use to buy the things you want from our design center,” take the price cut. There is usually quite a markup on developers' upgrades.

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