House Buying Question

[Banana]

We're think of moving to southeastern USA and have been considering buying a brand new house. Anyone have input re: buying new house vs pre-owned? It seems to me that new homes aren't much more expensive than used, and it may not be as difficult in coordinating the sale of my current house and the availability of the new house (I don't have to worry about the other owner's timetable.) Help appreciated.

Another question: Area we're looking at has mostly 2-storey homes. I've always lived in one-storey homes. Anything truly bad about 2-storeys (such as uneven ventilation, leaky upstairs plumbing)?

 

[RossMAN]

Our first house is going to be a brand new house in a development (with other brand new houses). Unless we find a KILLER deal on a pre-owned home.

The only downside to a 2 story house in the SE would be heating/cooling the upstairs, could be $$$.

 

[CPA]

As RossMan said the heating/cooling could cause problems. Just make sure that the systems they use are adequate (that you get two A/C units) and that they are properly balanced. In fact, after you move in, have the installers come out and rebalance them.

Also, if possible, use erealty.com or twopercent.com (better than erealty on a new home) so you get some money back on your purchase. I got $5500 back using erealty.com and it cost me nothing.

 

[RossMAN]

Originally posted by: CPA

Also, if possible, use erealty.com or twopercent.com (better than erealty on a new home) so you get some money back on your purchase. I got $5500 back using erealty.com and it cost me nothing.

Thanks, that sounds awesome.

What exactly is the purpose of those websites (can't access them from work right now)?

 

[Hoober]

Originally posted by: RossMAN

Originally posted by: CPA

Also, if possible, use erealty.com or twopercent.com (better than erealty on a new home) so you get some money back on your purchase. I got $5500 back using erealty.com and it cost me nothing.

Thanks, that sounds awesome.

What exactly is the purpose of those websites (can't access them from work right now)?

Yes, I'm curious, too.

 

[CPA]

Originally posted by: RossMAN

Originally posted by: CPA

Also, if possible, use erealty.com or twopercent.com (better than erealty on a new home) so you get some money back on your purchase. I got $5500 back using erealty.com and it cost me nothing.

Thanks, that sounds awesome.

What exactly is the purpose of those websites (can't access them from work right now)?

Erealty.com is a mostly nationwide real estate company that provides real estate services similar to your normal RE agent. They operate out of most major cities and surrounding areas. Couple of differences:

1) Their staff work on salary, not commission

2) Their fee for selling is 4.5%, so a little higher (but you don't need to use them for that purpose)

3) You do a lot of work yourself, like researching and selecting the houses you want to visit (new or used - they use the same MLS listings as any other agent). You do this on their website, which is has a pretty good search tool.

4) You get 1% back on the purchase price of your house - new or used. (twopercent.com gives you 2% on a new home purchase)

I was able to get more back, because the builder was throwing in a 2K bonus to the buyer's agent. I told erealty.com I wanted the bonus or I was going to use another agency. They gave in and I got the 1% plus 2K.

 

[bunker]

Bought a house in Atlatnta (suburbs) two years ago, 2 story. Heating and cooling is a bitch and I will never own another two story home if I can help it.

There is almost always a good 4-6 degree difference between upstairs and down. Now, this can be fixed with a rather expensive second furnace/ac/thermostat, but I don't have that kind of cash floating around.

There are still quite a few one-story / ranch style homes down here. There's a developement right down the street from me that's doing nothing but ranches.

 

[Banana]

Those two sites seem to be brokers who simply charge a lower commission. I didn't explore too much because neither of them do business where I'm moving to. In fact, they work only in a few states. Thanks for the headsup though--others may find them helpful.

About the upstairs AC thing--I would say a majority of homes are two storeys where I'm looking. Surely they've figured out how to do it right? Anyhow, I'm still hoping to find a large enough 1-storey house. (Most of the 2-storey homes in the sub-200K range are ugly, IMO)

Thanks for the replies so far.

 

[RossMAN]

Originally posted by: bunker
There is almost always a good 4-6 degree difference between upstairs and down. Now, this can be fixed with a rather expensive second furnace/ac/thermostat, but I don't have that kind of cash floating around.

If you were to buy a 2 story home which already had heating/cooling for both stories, how much do you estimate costs are per month for heating/cooling?

 

[awanSky]

I am having hard time using the erealty(atl) search, very slow. Used to be very good when I sign up last year. Anybody experiencing same problem here?

 

[jagr10]

I don't know about in the US, but in Canada when you buy a brand new house you have to pay sales tax on it. With a preowned you don't.

I usually am not a big fan of newly built houses. Depending on the builder, i've noticed alot of these new houses are cheaply built and many people complain of foundation problems or cracks or structure problems within the first 5 years. When you see a whole 2 storey house built in 3 days you know alot of quality work didn't go into it. Just make sure you see the finished product of some houses the builder made a few years back.

Newer houses don't tend to have a high resale value unless it's sitting in a very good location.

Buy whatever you're comfortable with. Just be sure to have a house inspection done by a company before you buy anything. That's the most important thing.

 

[Fausto]

Originally posted by: bunker
Bought a house in Atlatnta (suburbs) two years ago, 2 story. Heating and cooling is a bitch and I will never own another two story home if I can help it.

There is almost always a good 4-6 degree difference between upstairs and down. Now, this can be fixed with a rather expensive second furnace/ac/thermostat, but I don't have that kind of cash floating around.

There are still quite a few one-story / ranch style homes down here. There's a developement right down the street from me that's doing nothing but ranches.

I'll add to this that the build quality of the newer development homes around town are generally below that of existing homes. I can't speak for other areas, but here in Atlanta they throw up new homes as fast as they can and it shows. I don't think I'll ever buy a new home unless I know the builder personally.

 

[AstIsis]

I actually had this house built ~ 1.5 years ago and it was cheaper then buying a used home. It is also a 2 story house and I have never had problems heating or cooling it since it is well insulated. Yes, you do notice a slight difference in temp when you descend the stairs, but I find it minimal. As for cooling it, (I live in Austin so heating it is not really much of an issue) it actually costs less then when I lived in an apartment with 1/2 the square footage.

My monthly electric bill averages $120 a month for a 2000 square foot home. I keep the thermostat at 72 year round and never turn off the air conditioner thanks to the wonderful world of allergies.

As for selling your current home, my suggestion is to go with a national broker. Sit down with them and discuss what you are thinking about doing. They tend to have great suggestions and some even will help negotiate with your new home builder.

 

[CPA]

Originally posted by: AstIsis
I actually had this house built ~ 1.5 years ago and it was cheaper then buying a used home. It is also a 2 story house and I have never had problems heating or cooling it since it is well insulated. Yes, you do notice a slight difference in temp when you descend the stairs, but I find it minimal. As for cooling it, (I live in Austin so heating it is not really much of an issue) it actually costs less then when I lived in an apartment with 1/2 the square footage.

My monthly electric bill averages $120 a month for a 2000 square foot home. I keep the thermostat at 72 year round and never turn off the air conditioner thanks to the wonderful world of allergies.

As for selling your current home, my suggestion is to go with a national broker. Sit down with them and discuss what you are thinking about doing. They tend to have great suggestions and some even will help negotiate with your new home builder.

Same issue and same experiences here in West Houston. My 1200 sq ft apartment was running close to $200/month, in my 3650 sq ft 2-story house my highest bill has been $180 and that was with a bad coil on my downstairs 5 ton A/C unit. Now that that is fixed, I expect my electric bill to be lower or more in line with my expectations.

 

[CFster]

Originally posted by: jagr10
I don't know about in the US, but in Canada when you buy a brand new house you have to pay sales tax on it. With a preowned you don't.

I usually am not a big fan of newly built houses. Depending on the builder, i've noticed alot of these new houses are cheaply built and many people complain of foundation problems or cracks or structure problems within the first 5 years. When you see a whole 2 storey house built in 3 days you know alot of quality work didn't go into it. Just make sure you see the finished product of some houses the builder made a few years back.

Newer houses don't tend to have a high resale value unless it's sitting in a very good location.

Buy whatever you're comfortable with. Just be sure to have a house inspection done by a company before you buy anything. That's the most important thing.

Yeah, walked through a few "new" homes in the area and couldn't believe the contruction. Floor joist creaking as you walk over them, sticky windows, doors hung crooked, etc.

I'm happy with my 1959 Cape with plaster walls. Built like a rock.

 

[RossMAN]

Ok now I'm getting paranoid about buying a brand new cookie cutter home.

 

[Fausto]

Originally posted by: RossMAN
Ok now I'm getting paranoid about buying a brand new cookie cutter home.

Just make sure you do some research on the builder before you buy one. Sometimes they're fine, other times they're total crap.

I'll take my small, but very solidly built 1967 brick ranch any day, thanks.

 

[Banana]

Hopefully, the quality of new houses is better with national brands like Centex, Lennar, etc? They have a reputation to uphold. I'm currently in a 5 yr old Lennar home (that we bought used) that has had a few minor problems.

AstIsis: Sounds like you negotiated the price of your new house. That's good to know--I wasn't aware that prices were negotiable.

ANOTHER question Is it better to get upgrades through the builder, or add them ourselves over time? Main issue is whether it's cheaper to get upgrades up front. I realize that some major upgrades should be done at the beginning, such as structural additions. But what about floor tiles, or marble counters, or fancy-ass kitchen appliances.

 

[RossMAN]

Originally posted by: Fausto1

Originally posted by: RossMAN
Ok now I'm getting paranoid about buying a brand new cookie cutter home.

Just make sure you do some research on the builder before you buy one. Sometimes they're fine, other times they're total crap.

I'll take my small, but very solidly built 1967 brick ranch any day, thanks.

Trust me, I thoroughly research even a $2 pair of underwear before buying it.

I'll research the builder so well that I know what they ate an hour ago

 

[Hoober]

Originally posted by: Fausto1

Originally posted by: RossMAN
Ok now I'm getting paranoid about buying a brand new cookie cutter home.

Just make sure you do some research on the builder before you buy one. Sometimes they're fine, other times they're total crap.

I'll take my small, but very solidly built 1967 brick ranch any day, thanks.

I agree, make sure you do a lot of research. We bought our first home back in September and did a lot of research on new home builders in the area.

In the end, though, we decided on a home that is only three years old. Mainly because the landscaping was already finished. Also, it doesn't need the upgrade and maintenance time of an older home.

Be really careful with hidden costs of brand new homes. Most home builders don't include landscaping, sod, and fencing in the price of the house. So you have to shell out an extra 10 grand in order to make the yard look nice.

 

[rudder]

Originally posted by: CFster

Originally posted by: jagr10
I don't know about in the US, but in Canada when you buy a brand new house you have to pay sales tax on it. With a preowned you don't.

I usually am not a big fan of newly built houses. Depending on the builder, i've noticed alot of these new houses are cheaply built and many people complain of foundation problems or cracks or structure problems within the first 5 years. When you see a whole 2 storey house built in 3 days you know alot of quality work didn't go into it. Just make sure you see the finished product of some houses the builder made a few years back.

Newer houses don't tend to have a high resale value unless it's sitting in a very good location.

Buy whatever you're comfortable with. Just be sure to have a house inspection done by a company before you buy anything. That's the most important thing.

Yeah, walked through a few "new" homes in the area and couldn't believe the contruction. Floor joist creaking as you walk over them, sticky windows, doors hung crooked, etc.

I'm happy with my 1959 Cape with plaster walls. Built like a rock.

Plus I have seen newer homes that had a water leak. The pressboard that is used instead of plywood swells like a sponge and has to be completely ripped up and replaced. New homes may seem cheaper, but I think its really a matter of cheaper construction.

 

[Hoober]

Originally posted by: 1YellowPeril
Hopefully, the quality of new houses is better with national brands like Centex, Lennar, etc? They have a reputation to uphold. I'm currently in a 5 yr old Lennar home (that we bought used) that has had a few minor problems.

AstIsis: Sounds like you negotiated the price of your new house. That's good to know--I wasn't aware that prices were negotiable.

ANOTHER question Is it better to get upgrades through the builder, or add them ourselves over time? Main issue is whether it's cheaper to get upgrades up front. I realize that some major upgrades should be done at the beginning, such as structural additions. But what about floor tiles, or marble counters, or fancy-ass kitchen appliances.

The price of ANYTHING is ALWAYS negotiable. Especially real estate.

As far as upgrades go, I would run down to a Home Depot or Lowes and see what the price of tile and marble is. Then find out what they would charge to install it. Compare that to what the builder wants in order to upgrade the home. Remember, it is always negotiable.

 

[AstIsis]

Originally posted by: 1YellowPeril
Hopefully, the quality of new houses is better with national brands like Centex, Lennar, etc? They have a reputation to uphold. I'm currently in a 5 yr old Lennar home (that we bought used) that has had a few minor problems.

AstIsis: Sounds like you negotiated the price of your new house. That's good to know--I wasn't aware that prices were negotiable.

ANOTHER question Is it better to get upgrades through the builder, or add them ourselves over time? Main issue is whether it's cheaper to get upgrades up front. I realize that some major upgrades should be done at the beginning, such as structural additions. But what about floor tiles, or marble counters, or fancy-ass kitchen appliances.

I did negotiate, but then again I used a local builder instead of a national one. Well, my real estate agent negotiated.


As for the upgrades, I chose not to have them done via the builder. After pricing the labor and materials I found that I could have it done cheaper after the home was finished. I also decided that it was insane to finance home improvements and appliances for 15-30 years. Besides, I can negotiate better deals aftermarket for those items.

hehe..I tend to research then compare everything before buying so that I will have the knowledge to negotiate.

This is my first home, and I really could not have gotten such a great deal without my Real Estate agent. I interviewed a variety of them before choosing and have never regretted the decision.

 

[bunker]

For your upgrades it's all going to depend on how you want to pay for them. If you have the builder add them then the price can be rolled into the mortgage (higher mortgage) or if you do it yourself, it's out of pocket somewhere down the line.

 

[Banana]

I didn't think of using a realtor for buying a new house in a planned community. If prices are negotiable, wouldn't the developer be more flexible if it doesn't have to pay the realtor's commission?

As for the upgrades--that's a good point that if I do it up front, then the price would be rolled into the mortgage. I guess I could put a bigger down payment. AstIsis did mention that his improvements were cheaper when done later on, but he probably just addedd lots of ibises and scarab beetles and stuff.
But there is also the hassle factor of having work done when we're living in the house.

Arrgh--so many trade offs.