This is a seller’s market and the builder’s have the upper hand. If you want a new construction home, you may have to agree to things you’ve never heard of before. I have two examples below.
Right now there is a lot shortage, a labor shortage, and increased building costs happening in the Houston housing market. These issues have caused builder prices to increase in 2014. So the same floor plans that sold last year for one price, may be selling this year for a higher price. In addition to increased prices, some builders are waiting to market their inventory until it’s almost complete because they don’t want the buyer to choose the flooring and carpet and other options. They are enjoying being able to finish their builds and then have several buyers bidding on it. It saves them some headache along the way.
Here are a couple of issues I have seen lately that are really unique to our market. First, some builders are not making corrections requested per the inspection report. Second, they are asking buyers to sign a waiver agreeing to pay more for the house than it will appraise for.
First issue – inspection reports. In a normal market the buyer gets an inspector to inspect the house. The inspector produces an inspection report for the buyer. The buyer and agent review the report and ask the builder to make the necessary changes to comply with the inspector’s report. I have seen builders, in our strong seller’s market with our shortage of housing, refuse to make any of the inspectors changes to the new construction build. Then they moved on from that contract when the buyer backed out, and sold to another buyer who did not request those changes.
Second issue – appraisal waivers. In a normal market the buyer’s financing is contingent on the house appraising for the selling price. The lender orders an appraisal and the appraiser sends a report to the lender letting them know the house is in fact worth the value the lender is loaning on the home. In this market I have seen builders having buyers sign waivers saying they will pay the difference between the home appraised value and the selling price so that the builder does not have to come down on the price. This is unprecedented for the Houston market.
So why would a new construction appraisal come in low? Several reasons…the appraisers do not take into account the green features being incorporated in new construction housing. These new innovative products and building features that are expensive for builders and the lack of their reflection in the appraisal can keep the home from appraising for the construction cost. Another reason new construction houses may not appraise is due to rising lot costs due to the lot shortage in our area. There are some lots that have been acquired through bidding wars that have driven lot prices up above appraisal values.
Would you be willing to sign a waiver agreeing to pay more for a new construction home than it appraises for? There are buyers out there in the Houston area doing just that! … consigo comprar viagra sem receita medica inderal canada pharmacy simvastatin 80 … from canada generic cialis pay pal celexa safe nursing roxithromycin 150 mg … formal sem a obrigatoriedade da presenca diaria do aluno em sala de aula. … alunos autonomia no processo de aprendizagem sem perder a qualidade … buy depakote online | order generic cheap valproicx online