The New Build Reality Check

As a Saskatoon REALTOR(R), I often come across the following scenario:  Buyers are looking in a specific price range at resale homes, lets say with a $400,000 budget. They begin looking at homes in that price range and begin to realize that in Saskatoon, $400,000 does not buy you a fully updated mansion. The buyers start to become discouraged at the work that needs to be done to these homes to bring them up to their standards. The thought comes into their minds that perhaps they should be looking at brand new builds so that they can get the upgrades that they have been looking for. So far, I see no issue with this logic. The problem comes up when they begin looking at new homes in the $400,000 range.

As you're reading this, you may think "why not, that is what their home budget is?!".  The issue is that the buyers are completely overlooking the VALUE of a landscaped and fenced yard, a poured driveway, a finished basement (even if outdated) and equally important: the fact that you are not living in a construction zone!  To fully 'finish' a home, you are looking at least $60,000. Of course, if you can do the work yourself, you will save some MONEY, but don't forget about the time. Your time is worth something too.  

This may sound as though I am totally against new builds. This isn't true at all!  I love the idea of new home construction and buyers getting exactly what they want and being able to customize the home to their specific tastes. It's the mentality going into the previously described scenario that I see the problem. I always tell my buyers that if you want to get yourself into a new home, the finishing needs to fit into your budget as well. And I'm talking your cash budget, not your mortgage. All the finishing work typically cannot be financed into the mortgage, unless being completed by the builder before possession.

Blog Archives

Tags