Helpful Hints on How to Buy a Home that Doesn’t Exist

Published by Anchorage Daily News

By Connie Yoshimura

Today, there are only 137 residential properties for sale in Anchorage. Buyers are forced to compete with multiple offers and frequently end up paying more than the listed and market value. With the spring thaw just around the corner, frustrated home buyers who can afford to wait nine months to a year for a brand new home are talking to builders and searching for lots. That process can also be equally frustrating so here are some what I hope will be helpful suggestions when negotiating with a builder.

Working with a builder to build a home that doesn’t exist, perhaps, not even on a blueprint, takes time and attention to detail. Buyers need to understand that not all and is created equally. Since l998, there has been a 30 to 40 percent decline in the amount of buildable residential land. Selecting an uphill lot for a ranch home will add to the excavation costs which doesn’t add to the value. With our limited land inventory, buyers should first understand that most subdivisions with available lots are owned by the builder you are sitting across from the table. That’s why starting with the location and the land is the most important factor in your search. In today’s builder/developer environment, most subdivisions are closed and builders do not like to sell their lots to another. The builder who owns the land is the one who will build your home. Once that decision is made, the builder will have a portfolio of plans to select from. Bringing in a new plan that you found online is not a good idea. Those plans don’t always have accurate measurements for room dimensions and are not designed to meet the MOA building codes for vertical construction.They are, at best, an idea. It is better to find a plan in the builder’s portfolio that comes closer to meeting your needs. It is easier for a builder to enlarge a garage, add a bathroom, put in an island in the kitchen, with a plan that they have previously built because they already know the cost to build that plan. A plan never built is a risk to the builder which requires him to increase his margin of profit and results in an higher price per square foot to the buyer.

So once a plan is selected, there can be modifications and prices for add ons such as an upgrade to quartz sparkles for countertops and a waterfall for the kitchen is- land. Every builder should give you a list for allowances from flooring to lighting and everything in between. That list should include the supplier, its location, and the sales rep’s name and contact info. Most builders will have discounts, even at Low- es, so working with a rep who knows that builder will give you the best information and hopefully price. The opportunity for upgrades is endless. The best advice I can give a buyer is to ask what would be consiered standard for a home in the price point they are purchasing. You may want to add a fancy kitchen faucet or a chandelier rather than fan in the primary suite but understand those are personal choices. You should try very hard to not stray too far from the allowance. If you do, consider it a onetime experience like enjoying a gourmet dinner out. It adds pleasure but not value.

Some buyers may have a special skill coming from a construction or project management background and would like to lay the tile, install the flooring and the lighting in order to save on labor cost. My strong recommendation is that let the builder do his job. It’s not unusual for delays to occur when the construction schedule gets interrupted by an inexperienced or part time sub. And anyone working at the construction site should be currently licensed, bonded and insured. Most builders will not warrant any work provided by an outside sub.