Where can I get a list of home builders?
Question:
Can you negotiate the price on new homes?
Answer:
It can
be difficult to negotiate the sales price with a developer because they
may claim their prices are based on fixed construction costs. But it
doesn't hurt to try.
Experts say builders more likely to be flexible on price at the very
beginning and the very end of a development project. Early on, most
developers want to move people in quickly so the project picks up
momentum. Later, developers may be more inclined to accept lower offers
when only a few units remain.
If negotiating the price doesn't work, buyers commonly negotiate for
better amenities (upgrade carpet, light fixtures, etc.) or lot location.
Experts say a developer will rarely pass up a deal over a couple hundred
dollars' worth of carpeting, for example.
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Question:
Do builders give financing?
Answer:
Builders often include financing programs to help move more buyers into
a project early on. If it's a buyer's market in your area, you can be
sure that developers will offer incentives such as low-down-payment
financing.
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Question:
Should I buy a vacation home?
Answer:
Today a
vacation home can be purchased for investment purposes as well as
enjoyment. And yes, there are tax benefits.
Some people buy a vacation home with the idea of turning it into a
permanent retirement home down the road, which puts them ahead on their
payments. Another benefit is that the interest and property taxes are
tax deductible, which helps to offset the cost of paying for a second
home. A vacation home also can be depreciated if you live in it fewer
than 14 days a year, or 10 percent of the rented days - whichever is
greater.
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Question:
Should I hire a home inspector for a new home?
Answer:
Most
experts recommend having a home inspected, new or old. For new home, ask
the builder to provide copies of any inspection reports on the property,
architectural plans, surveys and pertinent construction documents for
your inspector to review. Your inspector should either be a professional
home inspector, an engineer, an architect or a contractor.
If you hire a professional inspector, look for one who belongs to one of
the home inspection trade organizations. The American Society of Home
Inspectors (ASHI) has developed formal inspection guidelines and a
professional code of ethics for its members. Membership to ASHI is not
automatic; proven field experience and technical knowledge about
structures and their various systems and appliances are a prerequisite.
Rates for the service vary greatly. Many inspectors charge about $400,
but costs go up with the scope of the inspection.
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Question:
What about new versus previously owned?
Answer:
Although new homes typically have a higher sales price than comparable
existing homes, buyers are willing to spend more upfront with an
understanding that part of what they are paying for is assured low
maintenance costs. A builder's warranty, along with brand-new roof,
appliances, furnace and other operating systems that make major repairs
unnecessary, work together to counteract possible slower appreciation
initially.
Data from the U.S. Census Bureau's American Housing Survey suggest that
operating costs per house are lowest for brand-new homes, slightly
higher for relatively new existing homes but lower on average for older
existing homes. Measured per square foot of living space, however,
operating costs are consistently higher for progressively older existing
homes.
Utility costs are the largest component of operating costs. Energy
consumption per square foot depends on size of the home, insulation,
window quality, air leakage and efficiency of the furnace. Operating
costs also include expenditures for both routine maintenance and major
repairs.
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Question:
What are considerations to buying a new home?
Answer:
Builders may have a target market in mind for their new-home projects.
Some may tout communities as glamorous to upscale urban professionals
seeking amenities such as a golf course, hot tubs and tennis courts. Yet
a playground and swimming pool might be central to a project geared
toward families while the next one offers seniors a walking trail and an
easy-to-care-for yard.
Do not be tempted to move into a "glamorous" community where you might
be able to afford the house but not the lifestyle. In addition,
similar-looking new houses often come complete with restrictions imposed
by the developer on house color, landscaping, renovations and anything
else a homeowner possibly could do to make their house deviate from the
preferred look.
Marketing experts try to appeal to buyer's tastes by their promoting
images for their developments. Don't buy into it. Form your own opinions
and only buy a home where you feel comfortable. After all, you're going
to have to live there.
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Question:
What are some new-home cautions?
Answer:
When
you buy a resale home, you can find out a lot more about the property
and the neighborhood before you buy than when you buy a new home.
Land to support new-home developments usually is located on the
outskirts of town. Potential buyers should ask the developer about
future access to public transit, entertainment activities, shopping
centers, churches and schools. Find out how far it is to the nearest
library, for example.
Local zoning ordinances also should be reviewed. A rather remote area
can turn into a fast-food-chain haven within a couple of years. Try to
ensure that the neighborhood, if not strictly residential, will not
begin sprawling out of control.
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Question:
What do you think of a vacation home as an investment?
Answer:
You can
buy a vacation home today for investment purposes as well as enjoyment.
And yes, there are tax benefits.
Some people buy a vacation home to use as a permanent retirement home
later, which allows them to get ahead on their payments. Another benefit
is that the interest and property taxes on a vacation home are
tax-deductible.
Some real estate experts predict that vacation homes will appreciate in
value due to rising demand from the aging Baby Boom generation. You also
can depreciate the property if you live in the house fewer than 14 days
a year, or 10 percent of the number of rented days - whichever is
greater.
You also need to consider whether you can afford to carry two mortgages,
pay for the extra utilities and maintenance costs, and how this
investment fits into your total personal finance picture.
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Question:
What is the return on new versus previously owned homes?
Answer:
Buying
into a new-home community may seem riskier than purchasing a house in an
established neighborhood, but any increase in home value depends upon
the same factors: quality of the neighborhood, growth in the local
housing market and the state of the overall economy.
One survey by the National Association of Realtors shows that resale
homes do have an edge over new homes. The trade group's figures show the
median price of resale homes increased4.3 percent between 1999 and 2000,
compared to 2.8 percent for new homes in the same period.
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Question:
Where can I get a list of home builders?
Answer:
For a
list of home builders, contact the National Association of Home Builders
at 1201 15th St., N.W., Washington, DC 20005; (800) 368-5242, or your
local Building Industry Association office.
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