Trouble with New Construction Homes in Utah! If you’re thinking about building a new construction house, then you need to watch this video because today I am going to talk about some of the biggest problems buyers are having with new construction, and really not just buyers but agents too. So stay tuned.
Hi. This is Melissa Ballman, and I am a realtor here in the greater Salt Lake City area. So what that means, if you’re looking at making a real estate move locally, give me a call. I’d love to connect with you and see how I can help you. Today we’re going to talk about the problems that people have when it comes time to new construction and actually getting a home built. If you’re looking for the biggest mistakes people make in the new construction process, make sure you stay tuned for my video called New Construction Mistakes. That will be completely different than what I cover today, so let’s jump into it.
Probably one of the biggest complaints I hear from people that I talk to that are looking at building a home, new construction, not even custom homes, just a spec home from a builder, and honestly, even as an agent, I’m having trouble with this. That is, no communication from the builders or the builders’ reps. It’s very, very difficult to get somebody to call you back, to text you back, get answers to questions. I have a client that left messages before we started working together and waited weeks without a return phone call from builders. So that is a really frustrating thing that buyers are going through right now.
So if you’re not familiar with what is happening in the construction industry right now, this is going to be critical for you as a buyer and that is, the commodity prices are changing and fluctuating weekly. Builders have to pass that on, which means that almost every week or every time a builder releases lots, their prices on their homes are going up. I have a client who was looking at a house, new construction, with a builder in December and already, it’s not even mid-January, and the price has gone up $10,000. Which isn’t bad relative to what other builders are charging with their increases, but still in a month’s time, a $10,000 increase.
I hope you’re enjoying my video so far. Make sure that you subscribe to my YouTube channel and click the bell. That way you’re alerted each week when I drop a video. Also, stay tuned until the end, because I am going to share you something that a lot of people don’t realize builders are doing or not doing currently. And if you’re on Facebook, jump on over to the group called Salt Lake Life. That’s all things happening and going on around the greater Salt Lake City Metro Area. Because Utah is in such a high-demand housing area, and the commodities that we already talked about, building time is taking at least eight months from the time you get a lot and sign a contract with a builder.
So you need to make sure that you’re not giving notice at your apartment or wherever you may be renting if that’s your situation, because chances are … I mean I’ve talked to some builders that are 10 and 11 months out right now for new construction once you have a contract with them. So make sure you account for how long it’s taking to build. Gone are the days that you just walk into a model home, and you want to buy it, you sign a contract, and they start building your house. That is long gone. Builders are now having wait list, interest lists, and every builder handles how they take those differently.
Some it’s just first come first serve, and when lots are released, they tick down the line and say, “Okay. You’re number 20 on the list.” So when the 20th lot is released, or maybe seven people ahead of you don’t want a lot anymore, and it’s literally just first come first serve of what’s available. I’ve also recently talked to a builder who it is a bidding war to get any lots available that they release. For instance, in this last release this builder did they did 12 lots, and they had about 35 people interested. So what they do is, you bid the highest and best for that house that you want built on the lot, and then the builder picks who has the highest and best offer. Last round, the builder’s agent said lots we’re going $30,000 over what was being asked for the list price.
Okay. Finally, here’s something that a lot of people don’t realize that builders are not doing right now, and honestly, I think a lot of agents that aren’t experienced in new construction or in real estate don’t realize this either. That is, some builders are not even putting their subdivision or homes that they’re going to be building on the MLS. So it’s not easily available for you to find new construction developments that might fit your needs or the areas that you’re looking in. That is why it’s more important than ever to make sure that you have an agent working for you that has relationships with the builders, and kind of knows what areas they’re in, and what is or is not on the MLS, or at least willing to do that footwork of finding those subdivisions that aren’t listed.
Again, gone are the days that we used to have just because of everything we’ve already talked about with housing shortage, commodities, build time, all of that. I hope you enjoyed my video today. If you have any questions about real estate or the area, reach out to me. Drop me a comment below, text, call, email, whatever. Just get in contact with me and let’s talk. I love helping people find their home, and as always, make it a great day.