New Construction Builders Are Taking Advantage of First Time Home Buyers

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[LAURIE]

Javy I’m in the Phoenix area and have been eyeing this new development for months. They just released prices end of July and the model I wanted was 319k. It hasn’t even been a month and it’s now 344k. The average family can’t afford new or resale. I’ve been preparing for yearsss and now it seems like we still have to wait for things to settle down.

[blacklionheart]

I bought my first home in a “rural “ area outside of Austin in 2013. Took advantage of the USDA loan. Zero down, $2000 a year tax credit too. Literally got back $293 of $300 down payment. Great way for a single first time buyer to get my foot in the door. I stayed in the house until 2016. Sold for $40k more than I paid for it. Used that money to buy a house along with my wife. When I bought the house in 2013 it came with all the appliances, blinds in all windows. Fully landscaped yard. I got to pick the house, lot, color, Stone, flooring. When I sold. New buyers could only pick the model. No colors or anything. The houses came with dishwasher and stove only. No blinds and no grass in the backyard. Plus the lots were getting smaller. HOA in top of that. Now we have 3 acres, no neighbors, no HOA, and refinanced from a 30 year FHA to a 20 year conventional loan in January. I’ve learned a lot in 7 years, but I feel like I’m winning a little bit in the game.

[GuitarsAndSynths]

The issue with new homes is lack of a yard. Sorry but a 2x5 foot patio is not a yard! High fees like HOA and Mello Roos further screw the buyer. Poor construction quality is an issue as well in new homes.

[Rebelleflwr]

All of this is so true!!! It's crazy. I hope that us "normal" people will be able to afford houses in the next 2-3 years.

[Mr_Kirk_]

Builders are in business. Supply and demand. They don’t have to “help” people and never will. They will make as much $ as they can until it looks bad enough for people to stop buying or the prices are too high for people to buy.

[MsHaitianRN]

I closed on a new construction in March and was kicking myself thinking if I waited a little while, then I could have gotten a better deal. Looks like I would have been waiting a lot longer than I thought. Love the vids!! Thank you for sharing your knowledge with us. I always feel like I’m getting inside info.

[edlee]

we signed and went into contract February 1st for new construction, target completion spring 2021. so relieved to hear someone said went in at the right time...

[jrize]

One other way they screw with new home buyers is with upgrades. They give you the shittiest standard options so you will upgrade. But if you upgrade, they charge you for the full upgrade plus maybe more but they don’t give you any credit for not using the standard issue.

Helpful tips: try to be smart about upgrades. Choose standard on most options, upgrade later after wear and tear on those, which, for new construction they use builder grade meaning low quality. You will upgrade in 2-5 years anyway so just use up their standard first. Try to upgrade the most important things - anything behind the wall like dimmable plugs or above the ceiling like recessed lighting and pendant lights. Try to not upgrade cabinets, instead upgrade the stain of the standard issue, it will still look great if professionally done. Use inexpensive bathroom upgrades for tile, even white, but add an accent which is not too expensive.

Hope that helps!

[Jeanalife]

I got scared because we bought in early July new build but it seems like I didnt get scammed. My interest rate is still low and they paid all closing cost.

[NekaW_]

I signed on a new build here in Austin and the same home across the street is 20k more due to the lot premium. It’s wild.

[pilot]

Dang. That sucks, I will still Continue to wait. Even though I have my down payment. Not gonna let this rush me. Very informative!

[TheDarkSideoftheStadium]

Everything he is saying is true. The DFW area is crazy. We can't find a home that is already built. An all the new builds are priced crazy high

[fredwu]

I will have to admit I just signed my new construction townhouse contract with closing date 9/24/21. $302k in nice Atlanta area which is still a good price considering other new townhouses in the area are $350k+. I am going today to pick out everything I want in the house but I’m sticking to standard features. I am shopping around 5 loan companies and not only sticking to the builder’s lender which would pay $4k closing costs. This was just $290k a month ago. Thank you for all the advice Javier!

[trialpractice]

I’m a little outside of Atlanta and just went under contract for new build. Since we went under contract in July, the builder has had three price increases and anticipates we could have over 50k in equity at the completion of the subdivision. The only incentive we received was half the closing costs if we used their lender.

[JanicasJourney]

I'm so glad I found your channel! My husband and I have been looking at new builds in the ave Maria community in Naples Florida. We had a home picked out in January, then they upped the price by $100, 000! We then found another builder, Pulte, in the same community. We found a home and all of a sudden they have new plans with new names. The plan we like is exactly the same house we liked before it's just $100, 000 more and has a new name. I called and asked when they would have lots available. They said they would be releasing 4 lots a month. 2 for the estate series and 2 for the manor series. So basically 2 lots a month, and the process is we would put an offer of the base price of the house + lot premium + structural upgrades + our entire budget. So if we were approved for a $700, 000 loan, that's the amount we would have to offer. But the house+lot+strc upgrades may only come to $550, 000. So would we have to pay the $700, 000? This seems very scammy to me. What are your thoughts?

[thatssosteffi]

Thank you for this video! My husband and I saw a new construction in Hollywood, FL back in Feb. It was $315-320k starting. Now it’s $340k starting. First time home buyers literally can’t catch a break lol thanks for this video!

[vitaminwater]

I got lucky! I bought in May new construction, first time home buyer. I was able to get 2.75%, now currently with the market the prices in that area has risen 15-20k.

[latashacooper-williams]

I'm in California and I purchased in 2012. When I first looked at the new build it was going for $194, 000 by the time they started building it went up I believe $6000. I didn't get any upgrades I just wanted a home. I did ask them to throw in the kitchen island & a fireplace on them & they did. I'm sure some where in there I paid for it. Here it is Same area but a different location in front of where I purchased (literally) 5 minutes away from me they are building new homes & they are going for $400 & up. I did a walk through & the sales guy said the prices go up every week.

[JZ-lyeb]

You are so right. I went to see a new construction in July, they were sold out but told me about a new phase opening up. Two weeks later, we went back, the same house, same elevation had already gone up $8000. I haven’t even signed the contract yet and my realtor told me it could go up another 3k because of high demand. It’s hard to wait, but I’m not about to overpay.

[oBlacko]

Here from Phoenix!
You're 100% right.. we got into a new build in 2019 by the time we actually moved in .. our model base had gone up $ 30k ! .. now with inflation, more new builds in the area are at least 50k over what they should be