Bardell Real Estate Logo
New Construction – a Smart Move for First-Time Homebuyers

New Construction – a Smart Move for First-Time Homebuyers

by | Jan 31, 2023 | Blog, Buyers, Homeowners, Homes, Villas and Condos, New Construction, News

New Construction – a Smart Move for First-Time Homebuyers

New Construction – a Smart Move for First-Time Homebuyers

Many first-time homebuyers might presume they’re better off going used rather than new—in other words, purchasing a pre-existing property rather than pricey new construction.

While it’s true that brand-new homes often come with a heftier price tag upfront, these properties can actually end up being a good—even great—deal for first-time buyers.

“It is true that new-construction homes, on average, are 10% to 15% higher in sales price than resale homes, but that doesn’t mean that they are less affordable,” says Bob Seeman, vice president of sales for New Homes at Realtor.com. “Simply put, total homeownership costs are more than a monthly mortgage payment alone.”

Here’s why first-time homebuyers shouldn’t rule out new construction, and how these opportunities can be a better deal than many might think.

Low inventory means first-time buyers should explore all options

In a housing market that’s still dealing with extremely limited inventory, the reality is first-time homebuyers can’t afford to dismiss this option.

According to the National Association of Realtors®, the inventory of existing homes on the market in December 2022 was at an all-time low of 910,000. That was a year-over-year decrease of 18%, and marks 31 straight months of declines in available homes.

“The housing shortage will get worse over the next year—we simply don’t have enough supply,” says John Hunt, chief analyst for MarketNsight.

For example, Hunt says, to get back to “normal” and meet demand, Atlanta alone would need 66,000 additional homes on the market over the next 12 months.

Compounding the problem is that homeowners who might normally sell aren’t doing so because they’re reluctant to buy a new home—and get a new mortgage—when interest rates are so high.

Translation: Unless you want to be waiting a long time to buy your first home, you should consider new-construction homes because there just aren’t enough homes of any kind to satisfy the current demand.

Builders can help first-time buyers with better financing

Let’s face it, price matters. That’s true whether you’re buying your first home or third luxury vacation property. The difference with a new-construction purchase, however, is you might be able to save money through builder incentives.

These promotions—meant to attract buyers to a certain development project—frequently come in the form of financing help, and this is what can make a new-construction home purchase workable for a first-time buyer.

“What many first-time buyers most need are cash to close and monthly payments that they can afford,” says Seeman. “Because many builders can offer financing through their company’s mortgage arm or through a lender affiliate, they have programs to help reduce the amount of cash a buyer needs to close on a home.”

A reduction in the initial cash outlay can make all the difference for a first-time homebuyer. Many builders are also currently offering much lower mortgage rates through their lenders as well in order to attract first-time buyers who would otherwise be priced out of the market.

“We’re seeing builders get creative with financing—offering rates as low as 4.99% to 5.99% right now, which is lower than what you’ll see for existing homes,” says Alex Toth, director of homebuilder partnerships at Opendoor.

Since mortgage rates spiked in October to over 7% for a 30-year fixed-rate loan for the first time in 20 years, this could indeed determine if a first-time buyer can qualify for a home or not.

Another benefit of working with a builder’s lender is that the lender is usually well-versed in FHA and VA loan options. These low or no-down payment loans might also be a huge benefit to first-time homebuyers trying to secure a mortgage if they qualify.

New-construction homes can save you money on utilities

Total homeownership costs include more than just a down payment and mortgage, but many first-time buyers forget that part of the equation.

“Even if a new home is 10% more than a resale home, new homes are built to the latest building codes, which set more stringent insulation and energy standards,” says Seeman. This means new homes might cost a buyer less in heating and cooling costs.

“Those efficiencies should help offset a slightly higher monthly mortgage payment,” adds Seeman.

Bill Samuel, owner of Blue Ladder Development, agrees.

“In most cases, a new-construction home will be considerably more energy-efficient than an older home since it was built to a higher standard of energy building code, so you’ll likely have lower utility expenses than an older, similar sized home,” Samuel explains.

However, Janice Glessner, the online sales and marketing manager for S&A Homes, suggests first-time homebuyers look for a builder that can offer proof of the home’s energy efficiency through a Home Energy Rating Score.

“This can translate to hundreds of dollars, even thousands, saved every year depending on where and how you live,” says Glessner.

New-construction homes often require fewer repairs—and come with warranties

Another way that a first-time homebuyer might save money by purchasing a new-construction home is through far lower maintenance expenses over the years since all of the components of the house are new.

“Older homes have hidden costs,” says Glessner. “For example, having to replace an HVAC system in an old home can cost thousands.”

But if something does go wrong with your new home, not only are there likely some manufacturer warranties in place, but many builders also include additional home warranties, which can save a first-time buyer from unforeseen expenses.

“Builder warranties usually come with multiple components,” explains Seeman. “For instance, a warranty may cover major appliances and systems—for example, plumbing, electrical—for two years, and structural defects for 10.”

Customization is cheaper than renovation

“Cost aside, a lot of first-time homebuyers are of the millennial generation, who are used to and expect customization in almost everything they do–and a new-construction home provides that,” says Toth. “From integrated smart home systems and technology to customizable finishes, today’s builders are giving first-time homebuyers a wealth of options.”

Numerous experts also agree that one of the biggest benefits of purchasing a new-construction home is the potential to customize the home to meet specific tastes. And this is also a financially savvy move since renovating a resale home can be costlier than new construction.

“Oftentimes a builder will have access to favorable pricing from its subcontractors and suppliers,” says Samuel. “So it is typically much more economical for them to perform upgrades during the construction process versus buying a property as is and hiring a retail contractor to make the requested improvements.

 

Experts in Residential Real Estate in Orlando

If you are buying or selling real estate it’s quiet often the single most important financial decision you make. For the last 30 years we have helped clients buying and selling property in Orlando and the surrounding areas. Put simply, this means the knowledge and expertise accumulated over this time ensures our clients get the best representation possible.

Our experienced agents will help and guide you through the entire process providing valuable support every step of the way.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

[formlift id=”36911″]

Ways To Lower Cost of Buying New-Construction Home

Ways To Lower Cost of Buying New-Construction Home

by | Jan 3, 2023 | Blog, Buyers, Homeowners, Homes, Villas and Condos, New Construction, News, Real Estate News

Ways To Lower Cost of Buying New-Construction Home

Ways To Lower Cost of Buying New-Construction Home

 

While buying any home is an expensive endeavor these days, buying a brand-new home—where everything is in pristine condition—will understandably cost a bit more.

Recent data from the National Association of Home Builders and the U.S. Census Bureau found that the price for a newly built home currently hovers at a national median of $436,800. Compare that with a preexisting home’s median price of $396,300, and it’s clear that buying brand-new might set you back tens of thousands of dollars extra.

Many homebuyers may find the added expense of new construction well worth it, due to the money they stand to save on renovations and repairs that might crop up in an older home. But homebuyers should also know that they can lower the costs of new construction right when they make the purchase through some smart negotiation tactics.

1. Buy into the community early

If your timeline is flexible, one prime opportunity to score major savings is by being one of the first people to purchase in a new community—even before the homes have been built—when developers are particularly eager to get buyers on board.

“There are pre-construction pricing opportunities that will likely allow you to purchase a home at a lower price,” says Bill Samuel, owner of Blue Ladder Development. “Since the potential pre-construction savings amount varies for each development, it is in your best interests to call around to every development to find the best deal.”

Samuel suggests prospective homebuyers create a spreadsheet of the different developments in their area and ask the sales representative for each development about the specific bonuses on offer.

Another potential benefit of “getting in on the ground floor” is that people who buy into a project early tend to have built-in equity by the time they close due to natural price increases as the builder sells more and more properties in the community. Translation: Your home will probably already be worth more than you paid once it’s finished.

2. Minimize the number of upgrades

Similar to a car, new-construction homes have “base models,” which come with the bare minimum. But if you want any fancy bells and whistles (think: high-end kitchen countertops or a custom paint job), this will typically jack up the price.

Homebuilders will generally have a list of what is included in the base price of a new-construction home, often referred to as the “specification level.” Beyond that, many builders offer personal selections or options that a buyer can choose to add for an additional fee.

Minimizing the amount of extras selected during your new home build is going to be one of the most significant ways to realize savings. Samuel suggests prospective buyers spend time touring the model home in any development being considered.

“Review the list of extras being offered while touring the home to see what you are happy passing on,” says Samuel.

However, keep in mind that if you do think you might want these extra features someday, you’ll probably get a better deal by adding them during construction than you will if you decide to renovate later on. This is for two reasons: One, builders buy at scale, so they get better deals with suppliers and can pass those savings on to you. Two, it saves the cost of demolishing or removing whatever items you are ultimately going to replace.

Basically, it’s always cheaper to build a new home the way you want at the beginning rather than retrofitting it down the line.

3. See if you can negotiate the sales price

While sellers of existing homes are nearly always willing to negotiate the sales price of their home, this isn’t always the case with builders. But you can try.

“Some builders won’t negotiate under any circumstances, but it is always worth a shot,” says Cliff Johnson, vice president of new homes at Realtor.com®. “Builders have [reasons] to keep prices close within the community to ensure they don’t end up with other upset buyers who discover their neighbor got a significantly better deal, though they purchased a home around the same time.”

So while you might be able to negotiate down the price of a new-construction home a little, be wary of trying to lower it too much, as that could ultimately work against you.

“Lowering the sales price, especially in a community where the builder has more homes to sell, is not a great strategy, nor is it good for the appraisals in the community,” says Kimberly Mackey, founder of New Homes Solutions and a sales and marketing management consultant specializing in residential homebuilding. “If the home values start to fall in an area, it isn’t good for the builder and the surrounding property values.”

As a result, a better bet might be to try to negotiate savings in terms of builder incentives (more on those next).

4. Find out what builder incentives might be offered

Builder incentives are basically promotions that developers use to attract buyers, and may include things like money-saving financing options (e.g., builders help with closing costs or buying down the home loan interest rate) or premium upgrades (e.g., installing high-end kitchen countertops for a fraction of the usual price).

Typically, favorable financing can be a boon to buyers during tough financial times when money is tight, whereas premium upgrades benefit buyers who long for a more custom, luxurious home without paying big bucks. Developers tend to offer more incentives during the beginning and end of a project, or during economic downturns that may slow the pace of sales. But it’s always worth asking what incentives can be offered.

One prime time to find incentives is near the end of the year.

“Sometimes a builder will provide incentives at the end of their fiscal year which is late fall of the end of the calendar year for most builders,” says Bob Seeman, vice president of sales, new homes for Realtor.com. “They want to show strong results for the whole year and the summer buying season has ended, so the incentives are often in place to extend that buying season.”

5. Go for the in-house designer’s suggestions

Another cost-cutting tactic for homebuyers is to take advantage of professionally curated “bundles” suggested by the builder’s on-staff designer.

These upgrade packages or bundles of popular features and color choices offered by some builders can save buyers money by keeping them from overspending in the selection center. Also, by offering these packages, the builder can buy premium materials in bulk and pass the savings on to the buyer.

“These bundles can keep a buyer from overimproving a home and assure them that the colors and selections will look great together,” says Mackey.

6. Be flexible on your home’s location

Don’t mind if the house is situated on a (slightly noisier) corner lot rather than tucked into a quiet cul-de-sac? Then this could help you snag a lower price that won’t affect your quality of life there.

“One easy way to get a lower price is to accept a lot that isn’t in a prime location,” says Seeman.

Similarly, if the developer has numerous projects in the works that you’re willing to explore farther afield, this flexibility could work to your advantage as well.

“If the buyer is flexible, they may find that they can get a better offer at a nearby community, depending on how that community is [selling],” Seeman explains.

7. Hire a real estate agent who knows about new construction

It is important to note that not all real estate agents have experience or understanding of new construction, and it can be a slightly different experience from purchasing a pre-existing home. So having an agent who knows this niche can save you money as well.

“I recommend that buyers work with a real estate agent who has received additional training in new construction,” says Mackey. “Buyers should ask their real estate agent to pull the comps before they make an offer on a new home so they can see the sales price others are paying in that neighborhood to put their minds at ease over the values there.”

Experts in Residential Real Estate in Orlando

If you are buying or selling real estate it’s quiet often the single most important financial decision you make. For the last 30 years we have helped clients buying and selling property in Orlando and the surrounding areas. Put simply, this means the knowledge and expertise accumulated over this time ensures our clients get the best representation possible.

Our experienced agents will help and guide you through the entire process providing valuable support every step of the way.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

[formlift id=”36911″]

Existing-Home Sales Fell 3.4% in May

Existing-Home Sales Fell 3.4% in May

by | Jun 27, 2022 | Buyers, Mortgages, New Construction, News, Real Estate Components, Real Estate News, Renters, Sellers

Existing-Home Sales Fell 3.4% in May

WASHINGTON (June 21, 2022) – Existing-home sales retreated for the fourth consecutive month in May, according to the National Association of Realtors®. Month-over-month sales declined in three out of four major U.S. regions, while year-over-year sales slipped in all four regions.

Total existing-home sales,1 https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.4% from April to a seasonally adjusted annual rate of 5.41 million in May. Year-over-year, sales receded 8.6% (5.92 million in May 2021).

“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said NAR Chief Economist Lawrence Yun. “Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions.”

Total housing inventory2 registered at the end of May was 1,160,000 units, an increase of 12.6% from April and a 4.1% decline from the previous year (1.21 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, up from 2.2 months in April and 2.5 months in May 2021.

“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” Yun added. “Nonetheless, homes priced appropriately are selling quickly and inventory levels still need to rise substantially – almost doubling – to cool home price appreciation and provide more options for home buyers.”

The median existing-home price5 for all housing types in May was $407,600, up 14.8% from May 2021 ($355,000), as prices increased in all regions. This marks 123 consecutive months of year-over-year increases, the longest-running streak on record.

Properties typically remained on the market for 16 days in May, down from 17 days in April and 17 days in May 2021. Eighty-eight percent of homes sold in May 2022 were on the market for less than a month.

First-time buyers were responsible for 27% of sales in May, down from 28% in April and down from 31% in May 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 20214 – reported that the annual share of first-time buyers was 34%.

All-cash sales accounted for 25% of transactions in May, down from 26% in April and up from 23% recorded in May 2021.

Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in May, down from 17% in April and 17% in May 2021.

Distressed sales5 – foreclosures and short sales – represented less than 1% of sales in May, essentially unchanged from April 2022 and May 2021.

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage was 5.23% in May, up from 4.98% in April. The average commitment rate across all of 2021 was 2.96%.

Realtor.com®’s Market Trends Report(link is external) in May shows that the largest year-over-year median list price growth occurred in Miami (+45.9%), Nashville (+32.5%), and Orlando (+32.4%). Austin reported the highest growth in the share of homes that had their prices reduced compared to last year (+14.7 percentage points), followed by Las Vegas (+12.3 percentage points) and Phoenix (+11.6 percentage points).

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

[formlift id=”36911″]

5 hidden costs of home buying

5 hidden costs of home buying

by | Apr 20, 2022 | Blog, Buyers, Homeowners, New Construction

5 hidden costs of home buying

5 Hidden cost for Homebuyers

1. Home Inspection
After you’ve submitted an offer on a home and the seller has accepted, make sure the place you’re planning to buy isn’t a lemon. Hire a certified home inspector to examine the property from top to bottom before you go to closing. If you uncover hidden structural, mechanical or other issues, you can negotiate the repair terms with the seller before you finalize the deal. Otherwise, you will be solely responsible for any problems and the cost of fixing them.

2. Closing Costs
While having enough money saved up for a down payment is great, it’s not the only cash you’ll need to seal the deal on a home purchase. You also need an additional 2% to 5% of the home purchase price to cover so-called closing costs, which can include everything from a loan origination fee and attorney fees to prepaid homeowners association fees and taxes.

3. Home Maintenance and Repair
Certain costs can creep up on you once you have the keys to your new home in hand. Unlike renting, in which a landlord foots the bill for maintenance, as a homeowner you’re on the hook for any upkeep and repair costs.

Survey of 1,000 U.S. homeowners. About of third (34%) of respondents in Hippo’s survey said the surprise repair cost was less than $1,000. Another 30% said it was $1,000 to $2,499, and 23% said they paid $2,500 to $4,999. Meanwhile, 13% spent more than that.e.

4. Title Insurance
The Florida state government sets the price for title insurance in Florida. The average cost is between $500 to $1500. Most homeowners purchase this insurance when they buy property in Florida because more mortgage companies require it. As a buyer of real estate or a house, you must ensure that you have legal ownership rights and interests. Mortgage lenders will also require title insurance to qualify you for a loan with your property.

5.Moving Costs
If hiring professional movers for a relocation, you can expect to pay at least $1,000. As mentioned above, the average cost of a local household move is $1,250, and the average cost of a long distance move is $4,890. If you need to move within a certain timeframe and must move out of your old apartment or house, you may also need temporary housing and storage for your things. These expenses should be considered in your budget.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

[formlift id=”36911″]

The Lakes At Harmony- A Fast Selling 55+ Community

The Lakes At Harmony- A Fast Selling 55+ Community

by | Feb 11, 2022 | Blog, Buyers, New Construction, Renters, Retirement / 55+, Sellers

The Lakes At Harmony- A Fast Selling 55+ Community

The Lakes at Harmony is an amenities-rich community providing a paradise designed exclusively for active adults (55+).  

Harmony encompasses 11,000 acres of which 70% will remain lakes, conservation areas and green space.  The community was carefully planned so residents can walk, jog or ride a bicycle to the beautiful lakes, play golf at the Harmony Golf Preserve and much more. 

The Lakes at Harmony is the newest and highly sought-after addition to Harmony.   

The Recreation Center is a brand-new exclusive amenity that includes a resort style zero-entry pool, community and craft rooms, fitness center and a “sunset gazebo” overlooking the 14th green of the Harmony Golf Course.  

 

Popular activities such as: tennis, pickle ball, mahjong, canasta, zumba, tai chi, yoga/piyo, bocce, book club, game night, BBQ and special seasonal events are also hosted at the Recreation Center throughout the year. 

  

And when you want to get out and enjoy the many attractions of Central Florida, everything is nearby:  for example, Orlando International Airport: 25 minutes; Disney World Resort: 30 minutes; Atlantic Beaches: 40 minutes; Sea World and Universal Studios: 45 minutes. 

  

Lakes at Harmony is a special place where you can meet new friends and enjoy the good life.  

 

Make time and visit this community. With only a dozen lots remaining, the chances of securing a home-site along the fairway of the Johnny Miller course or backing up to conservation land or overlooking a nature filled lake are dwindling.  

 

The Lakes at Harmony was recently showcased as one of the 50 best master-planned communities in the US for retirees, so don’t delay, call us today to schedule your private tour. 

​

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

[formlift id=”36911″]

Landsea Homes Is Now The Seventh Largest Homebuilder In Central FL

Landsea Homes Is Now The Seventh Largest Homebuilder In Central FL

by | Jan 29, 2022 | Blog, Buyers, New Construction, Real Estate Components, Real Estate News

Landsea Homes Is Now The Seventh Largest Homebuilder In Central FL

On January 19, 2022 it was officially announced that Landsea Homes Corp. completed the acquisition of Orlando-based Hanover Family Builders for a purchase price of $179.3 million, subject to certain post-closing adjustments and assumption of debt, which was refinanced with the company’s unsecured revolving credit facility. 

 In 2021 Hanover Family Builders closed 632 homes at an average selling price of $328,323 and ended with more than 4,100 lots under control, 469 homes in backlog worth more than $200 million, and 18 active communities. 

 “In 2021, Landsea Homes surpassed the milestone of $1 billion in revenues and completed our first year as a public company. We believe our acquisition of Hanover Family Builders is another truly transformative event for the company,” says Landsea Homes CEO John Ho. “With the closing of this transaction, we have increased our lots under control to more than 12,800 and further accelerated our asset-light strategy by increasing our controlled lots to approximately 50% of our total lot inventory.” 

 Hanover Family Builders was established in 2017 by the brothers Matt, Steve, and Andrew Orosz in partnership with Colby Franks. It all began with nine communities in the Orlando region, Osceola, Lake and Polk counties. The Orosz family previously formed Cambridge Homes in the 1990s and Royal Oak Homes in 2011, which were sold in 2005 and 2014 respectively. Over the decades, the various companies have received the highest recognition for their growth, customer service and commitment to the community.  

 “Hanover Family Builders has established a great reputation for providing wonderful homes and outstanding customer service across central Florida,” Ho says. “Given their strong track record, local market knowledge, and long-standing relationships, we believe that Hanover will play an integral role as we expand in this region.” 

Landsea Homes first penetrated the Florida housing market in 2021 with the acquisition of Vintage Estate Homes, providing homes in the Orlando area, including Palm Bay, Ormond Beach, Palm Coast, Sorrento, Lake Helen, Merritt Island, and DeBary. 

 “We were very impressed with Landsea Homes’ strategic approach and commitment to building great homes with top-tier customer service—values that closely align with ours,” says Hanover Family Builders co-president Steve Orosz. “Their senior leadership team is experienced and thoughtful, and they have created a culture of integrity that is dedicated to ensuring they provide best-in-class homes in each of their markets.” 

Ho says that Hanover Family Builders’ focus on the more affordable segments of the market “aligns strongly with our broader product positioning goals.” The acquisition of Hanover Family Builders is expected to have an immediate impact on Landsea Homes’ earnings, and Ho says this acquisition will drive the company’s return “on beginning equity to exceed 20% in the fiscal year 2022 and beyond.” 

 “Our mission is to create a best-in-class home building company that focuses on delivering high-quality homes at a great value to our customers, while providing superior customer service,” Ho says. “Hanover Family Builders fits perfectly into that mission, and we are excited to welcome them into the Landsea Homes family.” 

 

In the course of eight years, Landsea Homes has has grown into one of the premier national homebuilders and established a footprint in each of its key markets, including Arizona, Northern and Southern California, Texas, and Florida. 

​

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

[formlift id=”36911″]