If you are in the market for a new home, end of month, end of quarter, end of year is the best time to buy new construction! Similar to the advantages of a new car purchase at that time, buying new construction makes dollars and sense. The builder begins paying hefty double-digit interest rates on construction loans the moment the CO (certificate of occupancy) is issued. It’s to the builder’s advantage to get the property off the books for that and the property tax bill purpose. It also frees up cash and allows the community to move to release the next phase – remember completion is the goal.
It may ruffle the feathers of purchasers who bought during earlier parts of the year, but your purchase price will age out in 6 months. An appraiser looks at recent sales in the same neighborhood back 6 months. Foreclosures and other transactions not at arms’ length (selling to family member, etc) are not considered.
It’s always risky being the first to build in a new neighborhood. You do face future price reductions should the market decline, and a worse scenario: the builder going into bankruptcy or having to sell out to a builder that begins an inferior product.
To prevent that, the builder often marks down the inventory homes – although it can be painful, it really is to the current homeowner’s advantage. If a homeowner does have to move while there is still new construction going on in a neighborhood, it almost always causes a personal price reduction because most buyers will prefer a home that no one has lived in – then that seller becomes the bad guy among neighbors…
Remember, the new construction sales agent represents the seller… you really need a buyer agent for all transactions,so that you are informed of as many possibilities that a reasonable person should be aware of in a transaction and beyond – these items should come up prior to a purchase, and possible dissatisfaction later.
And from my perspective, working with buyers, sellers, and investors buying low and selling high is smart real estate. When the market recovers, you will have equity in a great product in a great neighborhood – some more, some less.
If you’d like automatic updates of the listings and closings in your neighborhood, or listings in a move up neighborhood, email me. You’ll be the First-to-Know!
There are still plenty of bargains here in the Charlotte Metro market for those ready to make their next move.