The start of 2013 is in full swing and it’s still a Seller’s Market in every sense of the term. At the years end there was just over 6,000 homes for sale in the Denver Metro Area. That’s the lowest we’ve ever seen in Colorado. We’ve also seen that there are more and more people looking to purchase a house with the historic low interest rates. Lots of buyers, very little inventory, 2013 is looking extremely competitive. So what do you do if you can’t find a house to purchase?
The reasonable solution is to purchase land and build from the dirt up. The problem people are going to run into is that lenders aren’t lending on land. This means you’ll need a substantial amount of cash to purchase the lot you want and then build from there. Not everyone has $50,000 to $600,000 to spend on just a plot of land and then to put money into building a home. This doesn’t mean you can’t still build a house.
New construction is in full swing throughout the Denver Metro area. Builders know that there is very little inventory for buyers to purchase so they are releasing lot after lot, beginning the building stages, and selling the homes as they go up in framing. They know that there are a lot of buyers out there and the resale inventory is at record lows. Because of these factors they are building more homes in 2013 than in the previous five years since the market crash.
There’s a lot to be said about new builds. The choices one has is near limitless based upon the builder. Do you prefer brick, stone, or wood exterior? Wrap around porch or back covered patio? Granite, marble, or soap stone for kitchen and bathroom counter tops? Hardwood or carpet? 5 piece master bath, large yard, surround sound, back splash, stainless steel, hidden appliances, crown molding, or radiant heat? Color schemes inside and out? You design it from the dirt up and you decide what goes in and what comes out.
There are some things to remember however when doing a new build as a consumer. First know that the sales person at the sales office of the new construction site works for the builder not you. The purchase contract you’ll be signing is designed to protect the builder not you. The earnest money is nonnegotiable. The sales people, while knowledgeable and friendly, are there to sell you on a bigger and better home as is the people working in the design warehouse where you pick the features of your home. They want you to use their lender instead of your own and they would prefer it if you did not come with representation; a Realtor.
There are numerous benefits to using a Realtor in a new build transaction. First, we’ve probably had more experience with builders and new homes than you have; this is our job after all. Second, it costs you nothing to have us there to make sure you’re represented. We can help to negotiate terms, make sure you stay within the budget you’ve set, review the sales contract, make sure the choices you’re making in designing your home reflect resale down the road instead of whimsical purchases, and most of all represent you to the fullest extent of the law as your Realtor.
If you have a Realtor you’re currently working with and you’re considering new construction please bring your Realtor’s card with you as you peruse new build sites. When filling out the registration form for more information make sure to give them your Realtor’s card so they know you’re represented. Inform your Realtor that you’re considering the options of a new construction home so they are in the loop. Utilize your Realtor and have them do the research of what you’re looking for before going to see all that’s available.
As we progress into 2013 and it continues to be a seller’s market buyers will find it might be a touch too competitive for them. I am in expert in new construction and would love to help you find your new home. Lots are selling left and right, new construction is going up in price because of the demand, and there won’t be much time to ponder the options. Call me and let me show you what’s available in the new construction market today.
Marc Bayes is an Associate Broker for the Colorado Dream House Team for Luxury Homes by Keller Williams, DTC. Contact Marc at 303-619-3052, firstname.lastname@example.org, codreamhouse.com or coloradodreamhouse.com
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