Why new construction is the answer for move-up buyers
May 19, 2016
As spring fades into summer and low inventory persists across our market, many move up buyers are turning their attention to new construction homes. Here are insights you can use as you consider upgrading from your current residence into a new construction property.
1. You won’t have to worry about inventory
For many homeowners who are hoping to sell and upgrade this summer, their main concern is the low inventory available in our market. Across the 13-county Twin Cities metro and beyond, buyers are competing over a shortage of homes in almost every price point and location.
If you’re a would-be seller concerned about finding your next property in time, new construction may be a great choice for you. Whether you’re looking to live in a condo in the ultra-hip North Loop, a townhome in Shakopee or a single-family home in Woodbury, you’ll likely find plenty of options to choose from if you expand your search to include new construction. Start your new construction search here.
2. You’ll be in control of the design
As a current homeowner, you know your property’s faults inside and out. You also likely know the exact features you want in your next home and finding a home that matches your high expectations may be difficult in today’s low inventory market
By purchasing new construction, you’ll be able to control everything from the room layout to the number of garage stalls to the temperature of your home’s floors when you wake up in the morning. When you build from the ground up, even your pipe dreams can become reality. Go ahead, put in the wine cellar, the sauna, the walk-in pantry and his-and-hers showerheads.
Worried about the timeline? Many developers are also selling “spec” homes, or speculative homes. Because the new construction market is showing strength, some builders are building inventory homes in developments before they’ve been sold. Once the buyer signs on, the home may already have its foundation set and general layout finalized, but the buyer can customize the home’s design features to match their personal style. Buyers who choose spec homes can often move in faster than those who participate during the entire building process.
3. Move at your own pace
More and more, today’s home sellers are using our low inventory market as leverage when accepting offers on their current home. Sellers are commonly adding reverse contingencies to the purchase agreement, or specifying that the sale of the home is contingent on them finding a new home to buy. If you plan to sell your home and will be purchasing new construction, work with your REALTOR® to add a reverse contingency.
Remember, a reverse contingency only works when the seller has a clear advantage, and not all homes will generate buyer competition. Together with your agent, you can determine the best strategy for asking for a delayed closing while still ensuring your home sells for top dollar.
Considering the tax deductions
For many property owners, their annual homeowner tax deduction earns them back a significant amount of money. If you rely on this annual tax deduction, you may want to allocate your excess cash toward an emergency fund.
Common financial logic is that everyone should save for up to six months of expenses in case they are laid off or unexpectedly unable to work. Once your emergency fund is full, you can use your homeowner tax deduction to fund home improvement projects, make accelerated mortgage payments or invest in your long-term savings.
Ready to get started?
We’re in the height of the 2016 new construction season, so you couldn’t have picked a better time to consider building a new home! Whether you have a development in mind or are starting from a clean slate, we have local specialists who can help. Reach out today to get started.
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