DIGS is the premiere luxury real estate lifestyle magazine serving the most affluent neighborhoods in the South Bay and Westside of Los Angeles, California.
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As a buyer, how much difference in value is a 5 year old home compared to brand new? There is no doubt some added cache to owning a home that no one has ever occupied which may add, give or take 5%, but more important is the condition and finishes and attention to detail. Is the home 100% in character with the finishes, amenities and in appearance to a new home or is it not? As a homeowner/seller of a newer luxury home, what do we have to offer making our home a better alterna- tive to a new home? Every case is different, but in many cases due to recent code changes, a home 5-10 years old offers more square footage on a similar lot. Also due to other code changes, many of the newer homes offer less square footage on the upper level which often reduces bathroom sizes or bedroom count. Many builders have also recently had to reduce the quality of finish materials to allow for their profit due to rising land, material and labor increases. Why are there fewer new homes in framing than 3 years ago? Interestingly there are several reasons aside from the obvious, which is that many of the tiny homes and fixers have already been rebuilt. However the biggest reason is that profit margins are gone and due to the recent link- age tax and parks and rec fee, owners holding firm for top dollar for the tear downs as well as limits to what a buyer will pay for a "new build" home makes the equa- tion no longer work in most cases. Will there be another wave of new homes starting soon? The wave of new homes will only start if a reasonable spread becomes available between the acquisition land cost plus building cost and the ultimate price a buyer will pay for the new finished home. Does it make sense for a private party to buy a fixer upper and build a home for themselves? Building their own home has always been a dream for many people. First there is the need to acquire a fixer upper/tear down. Then an architect, a civil engineer, a structural engineer, a builder, a landscape architect and a landscape installer are all required. A home generally requires over 20 different trades these are all coordi- nated by a builder if you buy a home already constructed. Construction financing is difficult to obtain and compli- cated to understand. There are also many time consid- erations and risks. Do I pay more for a new home by purchasing from a developer? Although every case is different, a developer can gener- ally spend at least 30% less to build than a private party because a developer has crews and relationships with many subcontractors. That said, a builder generally wants a 20-25% profit and then total invested dollars after paying costs and commissions. Factoring in people's tolerance for risk and their need for a reliable move in date, in most cases for homes other than estate proper- ties ($10,000,000 and above) it makes better sense and costs less in the long run to buy from a developer. Can you buy from a developer and make your own upgrades? It has become very popular for a buyer to jump into the purchase of a developed new home shortly into framing. Even though the floor plan is set, it may not be too late to combine two rooms or create an office alcove or to parti- tion off an area. A buyer can certainly change finishes and have input to countertops, floors, fixtures, hardware, and smart home technology which is generally all a buyer needs to feel that the home suits their personal needs. Does every new home provide the same warranty? Don't be certain that every new home is covered by a 10-year builder's warranty. If the developer applied for a remodel permit saving a wall of the previous struc- ture, the developer not only skirted many fees that are "new build" specific but also the obligation to provide a 10-year warranty. The developer will typically provide a far less comprehensive warranty over a period of time at the discretion of mutual agreement between the devel- oper and the buyer. Be sure to read and understand the warranty to know what is covered and what is not. Perhaps have the warranty reviewed by an attorney if you feel the language is unclear or in any way ambiguous. If I'm making upgrades to a new home, is it reasonable to pay for the upgrades in advance? Yes, it is totally reasonable for a developer to ask for payment in advance of the requested modifications as the builder is changing the home to your specific needs and will likely need to remove much of the improvements if you fail to complete the purchase. It is also important to understand that making changes to a design package will slow down the builder's project and proposed date if completion. What should we look out for when we do new home inspections? Always be sure to go full throttle on inspections. Your standard physical inspection report may likely recom- mend further investigation in the areas of drainage, geol- ogy and environmental if anything comes up in question. Often the installations of fireplaces are incomplete to meet all current safety codes and therefore a fireplace specialist should inspect each fireplace. If you are build- ing a new home there is no certainty that the sewer connection is brand new. That being the case, a sewer inspection is suggested as well. Ventilation can be inad- equate and that can be the case with weather proofing and waterproofing as well. Be specifically focused on sub areas and basements during the inspection process to determine moisture intrusions of any type. Can you buy from a developer on a contingency to sell your current home? Many developers will agree to a purchase contingent on selling your current home. Every developer has their own criteria for if they would agree and under what conditions they would agree. Is there a way to find out about locations and floor plans for homes under construction? Homes that are completed are usually offered on MLS, Zillow and Redfin, however, homes in the early stages of construction are not publicly advertised. As a new homes constructing specialty group, we track every new home building permit to ensure that we are 100% able to share coming soon offerings to clients. We have over 60 new homes at any given time in a vast variety of loca- tions and price ranges from Robertson to the Ocean and from Westchester to Encino, covering areas such as Santa Monica, Venice, Mar Vista, Cheviot Hills, Brentwood, Culver City, Beverlywood and Pacific Palisades. What are some specific areas where we might find a new home for under or just above $2 million? There are a number of "up and coming" westside loca- tions to explore, many of which are adjacent to the metro, and to headquarters for Google, Amazon, Apple, Snapchat and Facebook. Parts of Mar Vista, Playa Del Rey, Westchester, Beverlywood adjacent, Culver City and Del Rey are among the hot areas up to and just above $2,00,000. Call us to hear about several proper- ties coming available soon which can still accommodate design package modification and upgrades. Why are there so few one-story new homes being built? Due to recent building code changes in Los Angeles, there are specific guidelines limiting square footage and also limiting how many feet and what percentage of the total square footage can be allocated to the second story. Because homes sell for "X dollars" per feet, the only way for most developers to make a small profit is to build the maximum allowable number of square feet. A buyer is, in most cases, going to want some usable backyard so it would not be attractive or desirable to build a maximum size one story home leaving little to no yard. Also due to side and rear setbacks, most lots could not accommo- date a maximum size home all on one level. What is the appeal to these new homes in every price range? Buyers are enthralled by the open space, volume ceil- ings and orientation to outdoor spaces and a yard. Even when the yard is small, the trend is for indoor to outdoor living and entertaining with the California lifestyle totally engaged. Other selling amenities are the master suite and bath with sitting room and walk-in closets, a home office and smart home technology, automation and security. A beautiful kitchen opening to a rear facing family room is very typical in most newly constructed homes regardless of whether the architecture is Cape Code, farmhouse or modern contemporary. Hardwood floors, big windows and bifold or pocket glass doors are common in the higher price ranges. Ask The New Homes Experts ADVERTISEMENT