Real Estate Guide

Buying Your Home - Questions and Answers
'New Homes and Vacation Homes'

• Can you negotiate the price on new homes?
• What are considerations to buying a new home?
• What are some new-home cautions?
• Do builders give financing?
• What do you think of a vacation home as an investment?
• Will my vacation home qualify for a '§1031 Exchange'
• Should I hire a home inspector for a new home?
• What is the return on new versus previously owned homes?
• Where can I get a list of home builders?

Can you negotiate the price on new homes?

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, especially in today's Buyer's Market when builders are offering huge mark downs as well as interest rate buy downs.

Experts also say builders more are 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. (See>> Do builders give financing?)

What are considerations to buying a new home?

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.

What are some new-home cautions?

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.

Do builders give financing?

See >> Real Estate Guide: Your Mortgage - Interest Rates, How do you get a low-interest rate loan?

What do you think of a vacation home as an investment?

See >>  - Investing In Real Estate, Tax Considerations

Will a vacation home qualify for tax deferral under IRC §1031 (commonly known as a '1031 Exchange').

See >>  - Investing In Real Estate, Tax Considerations

Should I hire a home inspector for a new home?

See >>  - Buying Your Home - The Home Inspection - New Homes

What is the return on new versus previously owned homes?

See >>  - Buying Your Home - Market Value - New Homes

Where can I get a list of home builders?

For a list of home builders, contact the National Association of Home Builders at 201 15th St., N.W., Washington, DC 20005; (202) 822-0200, or here in the Mahoning Valley contact the  Mahoning Valley Home Builders Association.