2020 has brought a huge rise in new construction homes!
According to the Builders Association of Greater Indianapolis (BAGI), single-family building permits in the Greater Indianapolis nine-county area saw a 47% increase in October 2020 with 904 permits compared to 615 in October 2019. All told, 2020 permits are up 18% over last year, which means more and more people are getting ready to build!
Thinking Differently About Space and Design Trends
With the recent pandemic, people are realizing things about their current home that they never realized before. Working from home makes it more appealing to move further away from work, which is opening up suburbs and rural areas, where most homes are being built. What have you noticed about your home that you wish were different since March?
Recent new design trends are offering more of an open floor plan with the ability to have a separate space for work and/or schooling. The feature most desired is having an area separate from the rest of the home such as an office. Another popular feature is having a master bedroom on the main floor for those who are downsizing and some move up buyers.
There are many builders in today’s market offering different features in a home and occasionally additional incentives. With the recent rise in demand though, incentives could be a luxury other than for consumers to choose one builder over the other. Most production builders offer a “package” of sorts that lays out what finishes and fixtures come with a certain home. These “packages” can be summarized as low, medium and high generally, but usually have names that are associated with the neighborhood or builder. Some homes only come with a certain elevation or exterior style that you can choose from based on what other homes nearby might already have. Certain HOAs require that no two homes are identical, which can make choosing a style of home and the lot difficult. Its best to try being one of the first to buy a lot when they begin selling in a neighborhood so that you have plenty of options.
It takes most builders, that aren’t custom builders, 6-9 months to build a home. This makes winter a good time to begin building so that you know where you might be living when the fall semester begins if you have kids in school.
Custom Home Options
When it comes to building a custom home there are many more variables to consider.
- You have someone helping you design the entire home. When building from dirt, you have a lot of options to choose from. This can sometimes be overwhelming if you are not informed, but most choices are up to date with today’s design trends.
- You might have a less expensive option and a top of the line option to choose from. It is best to know what areas of the home you wish to spend the most on. Keep in mind that the model homes will most likely have the best features available and they’re not always included.
- Be sure to find out everything that is included. – In the case of spec homes (or new, move-in-ready homes) the home has already been designed to be built with certain finishes and fixtures that often times cannot be changed. Spec homes are ideal if you have less time to move because the permits have been filed and the process has already started.
A Realtor Can Help
There is a misconception that there is no benefit to using a realtor when building a new home. Realtors have a large knowledge about the home buying and building market that can be an asset. When you build a new home, you are signing a contract with a builder that can be seen as one-sided for the builder. Realtors know the common mistakes and issues to look for.
Secondly, if you have to sell your current home that may require lining up a buyer that can give you an extended closing date, or offer you a month-to-month rental after closing. Realtors that are familiar with new construction are good at navigating both situations. One last misconception about using a realtor when building is that you can get a better deal. New construction homes still must appraise. A city appraiser must value the home at the price you have agreed to pay for it, or some concessions may need to be made to the. If a builder pays a commission on one home and not another for two nearly identical homes then the newly built home may not appraise if one were to get a better “deal”. A builder can’t run the risk of having a home not appraise if they sell home A that is similar to home B at a different price, and if the home does not appraise the buyer may not be able to purchase the home, which then sits empty.
It is also beneficial to have the home inspected during the build process. This is often done in stages by most inspectors. You may not be able to go back after drywall has been put up and secondly an inspector gives you a perspective other than what one might think is the correct way of something being done. A builder’s representative should have the customer’s best interest at heart, but they are not obligated to since they represent the builder contractually.
If you have a home to sell, some builders may require you to have your home under contract (pending) long before the new home is actually finished. This depends on which builder you are using. This isn’t a requirement for all builders. In other situations, you will have to remove any contingency on your current home in order for the builder to continue building and if your current home does not sell you forfeit any money to the builder that you paid when you started the process.
Things to Think About Before Your Build
Anytime someone builds a home, there are many decisions to be made, unless it is a spec home, which can be a benefit for those who don’t like buying something they can’t see. Depending on the builder, you might be required to rely on someone (a builder’s rep) that you just met help you make decisions. Do research up front. It is often less expensive to have a builder put things in versus having a contractor change something afterwards. Know what you want by looking at other builder’s homes and pre-existing homes. Sometimes seeing what you don’t like helps you realize what you want.
If you are thinking about building a new home, let me know how I can help!