tom-beaty.com views on real estate

After all is said and done, how much does your builder walk away with? Do you wonder how a builder decides what to charge for a new home? You know that you pay for the lumber, carpet, fixtures and all the details, but how is the final price determined? Buying a home requires a lot of money. The cost is based on many different factors, including the construction, land and the marketing and administrative costs for the builder. And of course, the net profit. Does it sound any easier to understand? Most builders will charge in a similar way. The construction of the house wil account for approximately 50%25 of the base price of the home. There are several costs within the construction factor. There are direct costs, which are the sticks and bricks. These are all of the materials that go into the home, from the lumber to concrete and windows to carpet. The work is usually mostly provided by subcontractors hired by the builder. Then there are construction labor costs. These are the costs associated with work performed by the builder’s employees. These go along with the indirect costs, which are usually performed by the builder’s employees. They include the correction work that is done to fix any mistakes by subcontractors. You will also be charged the construction interest on the home. To finance the purchase of the lot and the cost of construction before you pay the builder, the builder takes out a bank loan. The cost of the loan, including all interest and fees, will be figured into the base price you pay. The actual cost of the lot can be between 25%25 and 40%25 of the base price. With the cost of land constantly going up, especially near metro areas, the lot portion has increased over the years. Added to your land costs are any off-site improvements, such as water and sewer lines, street developments, curbing and paving and driveways and sidewalks. Many builders offer a discount on the base price, often by paying for points at settlement, to encourage first-time buyers. A discounted home will often have construction costs that equal 50%25, lot costs of 30%25, a discount of 3%25 and a 17%25 gross profit. Out of the gross profit, the builder deducts administrative costs, marketing costs and taxes. If you choose options, you could add 10%25 to 30%25 to the base price. Surprisingly, builders walk away with less profit than you would expect. Net profits on the sale of a home often ranges from 2%25 to 6%25. In general, the larger the home, the higher the net. You can easily find out the net profits for builders that are publicly traded companies. You simply have to read their annual reports. When you are contemplating the building of a home, sometimes you should shop around a bit. Compare the costs for similar homes offered by different builders. Ask the builder how much of the cost is construction. They may or may not tell you. But it never hurts to ask. You can use this figure to estimate the rest of the costs.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

It is vital to buy a new home at the right time of year. The period leading up to the house builder’s year-end often means lower quality for the home buyer

This is the date when each of the builders’ regions have to report to their group head office, how many completions, that is homes they have built and sold, within their financial year. This is then released as either final (annual) or interim (half-year) results in their company accounts for their shareholders.

It is crucial for each region to achieve their target number of completions and everything is done to ensure they achieve the required figure. Sometimes directors lose substantial bonuses (and sometimes their jobs) if the target figures are not met. Very often your home is rushed to be finished in time for you to complete the purchase before the ‘year-end’ cut off date. This can result in a low standard of finish and reduced or forced drying out.

To ensuer the new home is “finished” the Council for Mortgage Lenders’ (CML) initiative now requires builders to obtain a completion certificate. This is issued by an independent Building Inspector, following a satisfactory final inspection of the property and is required before the lender will release mortgage funds. However a cash purchaser may not necessarily have this protection and should ask for the ‘CML’ before legally completing the purchase of the property.

Buying a new home that is scheduled for completion just before the end of the builder’s financial year or to a lesser extent, half-year, often results in a property being rushed and a poor standard. It is not difficult to assess when a particular plot will be completed. Once the scaffolding has been removed, it is normal for a house to be completed in ten to twelve weeks. Any property you may be considering should therefore be free of all scaffolding before the end of September or the end of March at the latest, depending on the builder’s financial year.

If you are considering an already finished (stock) property during the run up to the builder’s year-end, you are in a good position to get a large discount if you can “complete” the purchase on or before the year-end date. You may also be able to negotiate carpets and other extras as part of the deal.

A large proportion of house builders’ financial year-ends are in December, which is not the best time to move, especially into a newly built home. The builders are usually closed down over the festive period and arrangements for emergencies, should anything go wrong in the first few days, may be limited. It can also be more difficult to sell your current property during the winter months.

When buying a new home at the beginning of the builder’s new financial year (check link) be aware that builders may not be inclined to either price realistically, or give good discounts, as they will have time on their side to meet their required sales targets.

For more information on the best time to buy a brand new home visit: www.brand-newhomes.co.uk The premier information website for the new home buyer.

A new home building expert who knows what goes on with the big builders and what they REALLY care about!

The real estate boom of the past five years has created a Florida housing market that is very attractive to home builders. Hundreds of home builders are currently working in the state of Florida, and their work has a tremendous impact on the Florida economy. Housing accounts for 16%25 of the US Gross Domestic Product, and home builders created millions of new jobs in 2005. A solid market for home builders is a huge benefit for Floridians living in a state where housing has been big business for years. Although there has been concern of late over a cooling housing market, sales of new homes remain strong. Home builders across the country have adjusted their plans to suit the realistic expectation of today’s market, which maintains the delicate balance between supply and demand. Sale prices have dropped somewhat, and this creates a housing market that favors today’s Florida home buyer. The Current Market and the Resulting Impact on Florida Home Buyers It is vitally important for the Florida home buyer to be aware of the current market conditions, and what home builders are doing to improve their product and attract new home buyers in a competitive market. Despite rising mortgage rates, the current housing market favors the buyer. Increases in income levels across the country and decreases in previously skyrocketing housing prices have created an excellent market for today’s home buyer. For the first time in five years, the Florida home buyer is in the driver’s seat. Bidding wars are a thing of the past, and with a bit of research and careful shopping, it is now possible for the home buyer to get a lot more for their money. And when Floridians purchase newly constructed homes from Florida home builders, it provides the impetus needed to continue growing the Florida economy. This creates a win-win situation for both Florida home builders and Florida home buyers. New Trends in Florida Home Building There will always be tract home builders, especially in Florida. But the latest trend in Florida home building is one of higher quality at affordable prices. The Florida home buyer no longer has to settle for a tract or cookie cutter home just because they can’t afford the steep price tags that once accompanied high quality custom homes. Affordable Safety Upgrades for the Florida Home Buyer

A few home builders in Florida are taking hurricane safety and preparedness to a new level when constructing their homes. Not only are these homes built above Florida hurricane code to withstand a Category 4 hurricane, they are also affordable for the average Florida home buyer. These sturdy homes are built using solid poured concrete, additional roof truss straps, and impact resistant windows. Any additional cost incurred when purchasing a home with these special safety features is offset by the benefits they provide. It is often possible to obtain discounts on homeowner’s insurance policies, since these above code homes sustain far less damage during a severe storm. This resistance to storm damage also saves the home owner from costly repairs and rebuilding expenses. Not to mention the protection the homes provide for the homeowner’s most valuable possessions. More Options for Today’s Florida Home Buyer Another method Florida home builders are using to attract new buyers is to provide a wider array of customization options on all of their homes. Today Florida home buyers have the opportunity to purchase the home of their dreams, with all of the amenities they have always wanted. High quality custom home builders are currently offering new buyers everything from upgraded interior and exterior paint colors, better landscaping and irrigation systems, granite countertops and upgraded kitchen cabinetry, substantial lighting and fixture allowances, and top of the line appliances. Most builders of high quality custom Florida homes are also offering their buyers an array of spacious floor plan choices, and homes built in some of the most desirable communities in Florida. On all accounts, there has rarely been a better time for the Florida home buyer to purchase a beautiful, high quality custom home from a reputable Florida home builder. With more options, safer construction, and stabilizing (and in some cases, falling) sale prices, Florida home builders are going above and beyond to attract new buyers. This is great news for the Florida home buyer.

Concrete Florida Homes survive hurricanes - Tom Beaty a real estate broker and
home builders in Palm Coast, Flagler and Volusia County. Visit: Florida real estate or Florida home
builder

If you want to avoid the pitfalls that can come along with buying a new home, its best to do your homework. Many new homebuyers fail to properly cheack builders out and blindly take there word for things. This can be a huge mistake which can result in lost dollars and alot of aggravation. I came across a website recently that had been set up solely for the purpose of educating the public on the owners experience with a particular home builder. In the customers opinion, the builder did not honor the majority of his warranty work and used cheap laborers and subcontractors to build the home. The owner was able to supply me with a few tips for unsuspecting buyers. 1) Always make sure you get everything promised completed before closing. Often people get anxious to move into there new home and the builders can take advantage of that. 2) Always get the warranty in writing. 3) If the price is to cheap, its probably because the house is cheaply built. When things sound to good to be true they usually are. 4) Check with the BBB in your area. 5) Always get a list of satisfied customers and call them. You may find that the list is outdated or they arent so happy after all. An increasingly popular website to visit, with links to other helpful sites is www.rlgordonalert.com . This website was set up to inform people about an experience with RL Gordon Co., also dba RL gordon, which is a custom home builder in Central Florida. Ron Gordon is the president and owner of the Home building company. When I contacted him for comment on the webiste, he had none. However, it is clear that RL Gordon co. may be one of those custom builders in Central Florida you should steer clear of. Based on the comments made by the homebuyers in Markham Estates, Ron Gordon has done pretty poor work on the homes in the neighborhood and has defiantly refused to fix the mess he has made.

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EUGENE, ORE. - IDX, Inc. is proud to announce the introduction of the 2006 Tour of Homes website at www.tourofhomes.com. The Tour of Homes is an annual event hosted by the Home Builders Association of Lane County, consisting of 29 custom home builders proudly showcasing 33 beautiful new homes. The event is free to the public and runs from July 22-30. As you enter the Tour of Homes website, you are greeted with an artistic, eye-catching layout that compliments the talent and beauty often associated with the featured Lane County builders and their creations. IDX, Inc. has equipped the website with an informative “Welcome” page, providing visitors with a brief history of the Tour of Homes, an “Articles” section, outlining charitable contributions by the Home Builders Association of Lane County and a “Meet the Builders” page where you can get to know each builder on a professional, as well as a personal level. In keeping with the theme of “Building Community,” the 2006 Tour of Homes website includes a section for local community sponsors and contributors to the tour, along with an honorable mention for the 2006 Tour Committee members, the Home Builders Association of Lane County Officers and the Board of Directors and Association Staff members. Visitors can also preview the new and remodeled custom homes when the new website opens to the public this Friday. In addition to all the new homes featured on this year’s tour, visitors can browse information about previous Tour of Homes, so they can get a feel for this popular civic event. To check out this year’s Lane Country Tour of Homes website visit www.tourofhomes.com and get ready to experience a taste of the 2006 Tour of Homes from the comfort of your own home. About IDX, Inc. IDX, Inc. creates solutions to promote and connect sellers with buyers using innovative server-side technology. Headquartered in Eugene, Oregon, IDX, Inc. specializes in advanced web-based application development for industries and businesses worldwide. IDX Broker, the primary application developed by IDX, Inc., helps inventory and real estate professionals generate more new leads at a low cost to the client. For more information please visit www.idxbroker.com. About HBA Lane County The Home Builders Association of Lane County is a non-profit trade organization that represents the home building industry within Lane County. This organization provides building information, resources and education to its members and the public. Chartered in 1956, the Home Builders Association of Lane County was founded to allow members to combine their efforts for mutual benefit. Today, over 500 builders, subcontractors, suppliers, and related businesses from throughout Lane County make up the Association’s diverse membership. The HBA of Lane County is the local chapter of the National Association of Home Builders, over 850 chapters and 203,000 members strong. For more information about the Home Builders Association of Lane County, please visit www.hbalanecounty.org.

IDX, Inc. specializes in advanced web-based application development for industries and businesses worldwide. IDX Broker, the primary application developed by IDX, Inc., helps inventory and real estate professionals generate more new leads at a low cost to the client. For more information please visit the IDX, Inc. website.

“This [housing] market sucks,” stated Jamie Reynolds of Orlando, Florida.

Jamie and her husband want to buy their dream home. They can afford a home; they have steady employment; they have great credit…they are a “vanilla” file for any mortgage broker.

So What’s The Problem?

The problem is that the Reynolds keep reading the papers and watching the news. The result is that they’re not buying.

Why? What possibly could the Reynolds be reading, seeing %26 hearing to keep them from buying their new dream home?

How Many Reasons To Buy Now?

**Interest rates are historically low…a person with good credit can get ~6%25 on a a 30 year fixed rate loan.

**People, not just Boomers, especially want Florida’s mild winter weather. People are still moving to Florida, and the “experts” predict more and more people to continue moving to Florida.

**Rental rates are going up in many parts of the country, despite the number of empty houses owned by investors-speculators.

Who’s To Blame?

Is the media to blame for the “comatose” housing market afflicting many parts of the country?

Simple answer. No!

The media is not to blame for the slumping housing market, despite the horror stories appearing in the Sunday newspapers.

“Every Sunday, we grab the paper and read the Real Estate section,” said Jamie. “Every Sunday,” she adds, “almost every home builder has a big ad with “before” pricing and the new discounted price. In every Sunday paper, it seems the builders are slashing prices by $10,000-$30,000 per week. I mean, I swear they’re cutting the prices this much…every week.”

The media, both print and broadcast, sell advertising and papers.

Who’s To Blame?

Should you feel obligated to blame any one group for this protracted housing market slowdown, blame the Home Builders.

That’s right, blame the builders…their ongoing tactics are keeping the Reynolds and perhaps countless others from purchasing a home.

In an up market, the builders go for profit. In a down market, the builders go for market share. Therefore, the builders will dump “units” as the builders call them to gain share.

As Jamie iterated, one week the builders’ ads in the newspapers show a $349,000 sales price, which just happens to be a blistering $25,000 price cut from the previous week’s sales price.

Stop The Madness!

“Who knows, I might open the paper next week and see another $10,000 knocked off the already discounted price,” added Jamie.

The home builders apparently cannot understand how this negative sales strategy affects many potential buyers. Despite some valid reasons, why would a buyer who doesn’t have to buy today actually buy a new home amidst this price cutting?

The price could, or probably will, be lower tomorrow, if the homebuilders continue their irrational sales tactics.

As unpredictable as the homebuilders’ pricing tactics, the media is not responsible for this slumping housing market.

Beyond Slumping Sales Is Tragic Foreclosures….

In fact, the media also is not enabling this weak housing market by reporting increased foreclosures, especially when real people are financially ruined. These are real tragedies afflicting real people and, despite the tragic circumstances, the media wants to put a face behind the tragedy.

Of course, the collateral damage or fallout negatively influences people like Jamie and her husband, who hear about risky adjustable rate or “designer” mortgages and foreclosures and heavy price cuts.

Jamie said, “The Realtors and mortgage people want us to buy. They make really good points about the low interest rates and the inventory. At this time, we’re really confused and we don’t know who to trust. We hear these stories of people getting these interest only and adjustable rate loans and they are now in trouble. Does that mean that all interest only and adjustable rate loans are bad? We’re really confused and can’t afford to screw up.”

Are the home builders listening? This is exactly what’s suppressing the country’s housing market. People who do not need to buy a home are mostly sitting on the sidelines, waiting for the builders to capitulate.

Once prices stabilize and people stop seeing $10,000, $20,000, or $100,000 slashed off last week’s new home prices advertised in the Sunday newspapers across the country, the market may stabilize.

The market will stabilize when prices stabilize. Prices will stabilize when the home builders change their pricing tactics. The builders’ pricing tactics must change to get buyers off the fence.

Housing market “blues” aside, many people “in the know” who want to buy a new home are using a little-known strategy for buying their homes.

This strategy, often mistaken as a home-buying solution for people with bad credit, allows doctors, attorneys, airline pilots, school teachers, fire fighters and many others to buy today and not worry about overpaying.

Are you curious how these people are buying their homes? Learn the “secret” at Orlando Real Estate-Rent Own Florida.

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