Q & A Table of Contents
The House That Might Own My Family
From: Donna, New York
Question: We have been looking for a contemporary home in
a town that, for the past few years, is only building colonials. Normally,
a builder builds a home and then advertises it. People very seldom purchase
land and hire architects and builders in this area because it is extremely
costly. It has been suggested to us that the way to go about getting a
newly constructed contemporary is to find a builder who has already
purchased land, and then ask if he would, instead, build a contemporary or
customize plans on a colonial.
We went to a model home which was built by the most well-known builder in
the area. He also has the best reputation for quality. The layout was very
nice and could easily be converted to a contemporary. It was just about the
only home we've been interested in during our years of searching.
Unfortunately, it was not in a neighborhood that we wanted so we asked if he
could build it elsewhere, modifying the plans to a more contemporary look.
He said he would only do it if he could also build other homes on the site.
We called several times and, after a few months, he told us of some property
that he had, in a nicer area. He plans to build 5 homes here which wouldn't
be completed for a year.
Because the lot is larger than where we saw the model, he said that he would
have to enlarge this house and refused build the size of the model. He
discussed changes that he could make, talking of opening up a wall to make a
loft, adding contemporary windows and railings, etc. We asked him the
price, but he said he would have to call us. He would not even give us a
ballpark.
When he called us, we were shocked to find that his price was $145,000 more
than his model. Granted, this is a more upscale neighborhood, and the lot
and house are bigger. He also said that this was the base price and
anything else done to it (like those contemporary windows), would be an
extra charge.
The house sounds beautiful and I think he knows how hard we've been
searching for what we like. (We've actually been searching for years and
this is the closest to what we want). The seller's market here is
excellent, as anyone can tell you. Houses cannot go up fast enough.
Because of the incredible demand, I've been hearing lately of how builders
are building on the oddest lots...steep hills, over streams, etc. At the
end of this particular property, there is a small stream running through it.
It wouldn't be on our lot, but this still concerns us. We mentioned it to
the builder and he didn't seem to think it was a problem. I wonder if he is
fixing it and raised my home price in which to do it.
We tried twice to get him to go down on the price. My husband was actually
planning on spending $75,000 less on this house. (Also, we were hoping to
adopt a child and I don't see how that's possible if we pay this price.)
The builder absolutely will not budge...AT ALL! Everyone I speak to says
that it'll never happen because builders (especially this one) will always
find someone else who will pay.
If we gave in, there's no telling how much higher this price will go once we
start adding extras. Also, I'm nervous about making a deal with someone who
is not flexible since we will have to be in contact with him throughout the
home-building process.
I've checked other homes in the area and his price is most definitely the
highest. Home prices have been rising at an incredible rate, and I think
he's projecting into next year's prices...but who knows what they will be
next year. The market could change at any time and interest rates could
soar. How am I expected to make a commitment when it's a year away?
Since we sought him out and we are the first people interested in this site,
we even asked him if it was possible to lower our price somewhat and make up
for it on the other four houses that he is building in this area. He told
us that because we were picking out the best lot, he wouldn't be able to do
this.
Between you and me, we REALLY want this house, but I can't see it happening
if he doesn't lower his price. It feels very unfair, and whenever I think I
might give in I start to feel like a sucker.
I'd appreciate any advice you can give me. I would like to respond to him
as soon as possible because he is has recently cleared the land and put his
sign up. I don't want to lose my chosen lot, so I'll have to work fast.
Thanks in advance.
Response: Dear Donna,
Frankly it sounds as if you have placed yourself in a position that leaves
you extremely limited flexibility. The builder knows you are 'lusting'
after the land he has to offer, you have let him know that your alternatives
are virtually nonexistent. To be gentle, this is not a very good situation
to find yourself in when you are negotiating.
The good news is that, if you go forward with this particular builder and
the site and house he can deliver, you have a clear idea of what you are
going to get and a good guesstimate of how much it will cost.
The bad, or at least complicating news is that the financial commitment
required by the house threatens your capacity to adopt a child.
You have to ask yourself several questions: What are your priorities? Have
you any financial flexibility? Can you change your criteria for the house
and/or location to bring things to a more reasonable price level? Can you
limit your financial exposure by deciding ahead of time what kind of extras
to include in the construction plans -- and then stay away during the
construction work so you don't make any expensive change orders during the
process?
The picture you present displays tremendous vulnerability on your part; the
best course you can take will be to focus on minimizing your costs while
making sure that the commitment(s) you make do not make you a prisoner of
the house (financially or otherwise).
I wish you good luck,
Steve
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