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Homebuilder Savvy
Knowing what questions to ask a homebuilder can save you tens of thousands of dollars. Each homebuilder is a little different, but the questions you need to ask remain the same.
At one point, there were over 200 homebuilders in Palm Coast alone. Many of those have left town or gone out of business completely, and there are some very good reasons why. A builder may be able to build a few spec homes (spec = speculating that someone will buy them.) and sell those, but is unable to get their feet off the ground after that.
Why? Most homebuilders don’t explain all of their fees upfront. When a buyer purchases a spec home, the home is all ready built or very close to completion and has a complete price tag on it. On the other hand, buyers purchasing a home from the very beginning of the process have to see every single fee added onto their bill. This increase in the purchase price turns a lot of buyers off, before they even close. There is nothing worse for a buyer than to feel they were taken advantage of and then to have to move into a home, whose builder they now deplore.
How do you protect yourself? Ask questions. A lot of them. If a homebuilder advertises that they build a home for $100,000, you will also want to know how big that home is (it may only be 900 sq. ft.). Is the lot included in that price? Not likely. Are the impact fees (starting at $16,375 per home, with additional fees by square footage and value, not including extra structures such as a pool) covered? What about fill dirt and sod? If you have a lot that is 10,000 sq. ft., a home that is 2,000 square feet and a builder that only provides 5,000 square feet of sod, guess who is going to foot the bill for the additional 3,000 square feet of sod? That’s right… You! Don’t forget about permit fees! If the cost of materials goes up during the building process, does the builder pay the difference or do you?
Hold on, we aren’t done yet! Do you remember that beautiful model home that the builder showed you? You absolutely fell in love with it! There were granite countertops, beautiful lights in every room, high quality fixtures, tile floors and showers, not to mention the wood floors! Oh yeah, that only costs an extra $60,000. Builders love this! They sell you on a home that doesn’t exist, with a price tag that is deceptively low and then they send you to the decorating showroom to “finish” your home! Oh yes, they will give you a $10,000 credit at the showroom to add in upgrades, but no, you won’t be able to use it on those granite countertops.
Do you want wiring for lights (not even actual lights) in the bedrooms? What about cable outlets? A lot of builders will nickel and dime you every step of the way. A common list of upgrades can include: outlets, lights, flooring, sinks, counters, and cabinets. The upgrades are definitely not limited to these though. Be sure that when you are in a model home, one of the first things you ask is what is the dollar amount on the upgrades in this house? Then have the sales representative show you all of the upgrades in the house. After all of that, try to also remember that the house has been decorated by a professional decorator and may have more than $30,000 worth of furniture put into it.
There are some very good builders in the county and some that you may want to avoid. My personal favorite is Maronda Homes. I built my first and current home with them. They are one of the only large builders in town that has a bottom line price from the moment you sign the contract. Beyond having a set price, they also have the lowest prices per-square-foot of any builder I know. If you know them, they may not be the most striking homes you have seen, but they are doing a lot to change that. When I bring buyers to their office today, they can see homes with stone fronts and can upgrade countertops and appliances, among other things. The crux is that I can bring a buyer into their model, know that they don’t have any upgrades in the model and also do not have a design center. All of their options are chosen before contract, instead of after as with a lot of builders, if they want any options at all. Maronda Homes also includes features standard that other builders charge for, such as: pest tubes in the walls, hurricane shutters, and double-pane windows. We do have many quality and reputable builders in town, but you need to be able to compare apples to apples when looking at them.
If you have questions about homebuilders or want to visit some offices in town, please do not hesitate to contact me.
