Additional Cost and Options for New Home Purchase

[paperboyNC]

I can upgrade for about half price what the builder charges for flooring and other items.  Every upgrade through builder is more property tax.  You do however get a thirty year loan on it and it is all ready to go at coe.

If you upgrade from outside contractors make sure you do everything you want before you move in.  If you are like us you will end up not doing hardly any of the stuff you said you were slowly gonna do after you move in.

Keep in mind that you have to pay the carrying costs while you are upgrading after COE and include this in your cost comparison.

 

[Zippohunter]

I can upgrade for about half price what the builder charges for flooring and other items.  Every upgrade through builder is more property tax.  You do however get a thirty year loan on it and it is all ready to go at coe.

If you upgrade from outside contractors make sure you do everything you want before you move in.  If you are like us you will end up not doing hardly any of the stuff you said you were slowly gonna do after you move in.

Keep in mind that you have to pay the carrying costs while you are upgrading after COE and include this in your cost comparison.

You mean the two weeks or max one month of rent I have to pay on a temp apartment while the upgrade after coe is finished?  Yes good point.  The contractors will be ready to go the day after I receive the keys.

 

[Arman]

If you upgrade from outside contractors make sure you do everything you want before you move in.  If you are like us you will end up not doing hardly any of the stuff you said you were slowly gonna do after you move in.

This. 

It's such a pain to do renovations after you move in.  Flooring, paint, trim, etc is easy to do after COE, you just have to set up the subs before and do it right after you get keys.  I'm on the fence with flooring.  If it's a substantial savings, say over 15%, then it's worthwhile to me, but if it's 5%, I would just go with the builder to save the hassle and keep the warranty of the plumbing.

Good luck.  I hope you get the lot you want.

I agree with OCgasman here. Within reason, I'm a big fan of doing most of the upgrades through the builder. Assuming, of course, you have a good builder who stands behind their product. The hassles of dealing with contractors who may or may not be reliable is just not worth it to me.

With our recent home purchase, we were about 20% in additional costs for upgrades through builder, not including window treatments or landscape. Add those in, and we're at 30% or so.

 

[Paris167]

If you upgrade from outside contractors make sure you do everything you want before you move in.  If you are like us you will end up not doing hardly any of the stuff you said you were slowly gonna do after you move in.

This. 

It's such a pain to do renovations after you move in.  Flooring, paint, trim, etc is easy to do after COE, you just have to set up the subs before and do it right after you get keys.  I'm on the fence with flooring.  If it's a substantial savings, say over 15%, then it's worthwhile to me, but if it's 5%, I would just go with the builder to save the hassle and keep the warranty of the plumbing.

Good luck.  I hope you get the lot you want.

I agree with OCgasman here. Within reason, I'm a big fan of doing most of the upgrades through the builder. Assuming, of course, you have a good builder who stands behind their product. The hassles of dealing with contractors who may or may not be reliable is just not worth it to me.

With our recent home purchase, we were about 20% in additional costs for upgrades through builder, not including window treatments or landscape. Add those in, and we're at 30% or so.

Wow 30% of the purchase price of your home? For most people in Irvine that's north of 300-400k  Is that right?
I guess new home purchase is no joke when you add the additional costs...

 

[OCgasman]

If you upgrade from outside contractors make sure you do everything you want before you move in.  If you are like us you will end up not doing hardly any of the stuff you said you were slowly gonna do after you move in.

This. 

It's such a pain to do renovations after you move in.  Flooring, paint, trim, etc is easy to do after COE, you just have to set up the subs before and do it right after you get keys.  I'm on the fence with flooring.  If it's a substantial savings, say over 15%, then it's worthwhile to me, but if it's 5%, I would just go with the builder to save the hassle and keep the warranty of the plumbing.

Good luck.  I hope you get the lot you want.

I agree with OCgasman here. Within reason, I'm a big fan of doing most of the upgrades through the builder. Assuming, of course, you have a good builder who stands behind their product. The hassles of dealing with contractors who may or may not be reliable is just not worth it to me.

With our recent home purchase, we were about 20% in additional costs for upgrades through builder, not including window treatments or landscape. Add those in, and we're at 30% or so.

Wow 30% of the purchase price of your home? For most people in Irvine that's north of 300-400k  Is that right?
I guess new home purchase is no joke when you add the additional costs...

Well, the actual dollar amount based on percentage really depends on the base price of the house and the size of the lot.  But, 15-20% on a $1M+ home is not unusual especially if you're picking hi end options (especially flooring, stair system, cabinetry, countertops, appliances, solar panels, structural, insulation, water softener, etc) through the design center.  The yard is the big variable.  You can go extravagant with a pool, outdoor kitchen, travertine, fountain...and the yard can easily be $200k.  Or go super cheapass with concrete and sod.  It's all individual preference.

 

[irvinehomeowner]

I must really be a 99%er.

If I'm buying a brand new home and it cost more than $1m, I don't see why I would have to pay another $300k. The $1m+ should include some of that high end stuff already.

#1stworldproblems

 

[Paris167]

I must really be a 99%er.

If I'm buying a brand new home and it cost more than $1m, I don't see why I would have to pay another $300k. The $1m+ should include some of that high end stuff already.

#1stworldproblems

Amen to that! Why do they give you thermafoil and crap carpet throughout the place when paying so much. Have you seen the standards the builders give in Atlanta - first class all the way for a $500k home on 1 acre. And we get nothing - sometimes I feel like we're living in Manhattan for the size of home and prices they demand.

The problem is people (suckers) just pay the $$ through their nose so why wouldn't big business take advantage.

 

[Irvinecommuter]

I must really be a 99%er.

If I'm buying a brand new home and it cost more than $1m, I don't see why I would have to pay another $300k. The $1m+ should include some of that high end stuff already.

#1stworldproblems

Amen to that! Why do they give you thermafoil and crap carpet throughout the place when paying so much. Have you seen the standards the builders give in Atlanta - first class all the way for a $500k home on 1 acre. And we get nothing - sometimes I feel like we're living in Manhattan for the size of home and prices they demand.

The problem is people (suckers) just pay the $$ through their nose so why wouldn't big business take advantage.

Panda is that you?  

Price is driven by demand and location.  75% of what you are paying for is the land, not the structure.

 

[Arman]

If you upgrade from outside contractors make sure you do everything you want before you move in.  If you are like us you will end up not doing hardly any of the stuff you said you were slowly gonna do after you move in.

This. 

It's such a pain to do renovations after you move in.  Flooring, paint, trim, etc is easy to do after COE, you just have to set up the subs before and do it right after you get keys.  I'm on the fence with flooring.  If it's a substantial savings, say over 15%, then it's worthwhile to me, but if it's 5%, I would just go with the builder to save the hassle and keep the warranty of the plumbing.

Good luck.  I hope you get the lot you want.

I agree with OCgasman here. Within reason, I'm a big fan of doing most of the upgrades through the builder. Assuming, of course, you have a good builder who stands behind their product. The hassles of dealing with contractors who may or may not be reliable is just not worth it to me.

With our recent home purchase, we were about 20% in additional costs for upgrades through builder, not including window treatments or landscape. Add those in, and we're at 30% or so.

Wow 30% of the purchase price of your home? For most people in Irvine that's north of 300-400k  Is that right?
I guess new home purchase is no joke when you add the additional costs...

Something like that...

If I'm not at work, I'm at home (except for the gym). I love being at home. I want to enjoy being at home when I'm at home. If I spent most of my non-work hours out and about all the time, then maybe spending so much upgrading stuff in my home might not make as much sense. But I'm a homebody.

Again, I'm basing my advice re builder upgrades vs outside contractors on the fact that anytime I've had any issues with builder-done upgrades, it's been SUPER EASY to have the problem fixed. With outside contractors, it's been hit and miss, more miss than anything, and it's been an outright nightmare with one big project.

 

[OCgasman]

I must really be a 99%er.

If I'm buying a brand new home and it cost more than $1m, I don't see why I would have to pay another $300k. The $1m+ should include some of that high end stuff already.

#1stworldproblems

They do include some hi end stuff.  But, everyone likes to customize to their taste.  Let's do an example.

3500 5 bedroom SFR

$15,000 for a conservatory option
$15,000 for prep kitchen or craft room
$10,000 for bifold doors
$3000 for added insulation
$4000 for recessed lighting
$4000 for water softener
$1000 for j-boxes for ceiling fans and chandeliers
$7000 for upgraded cabinetry
$7000 for upgraded countertops and splash
$10,000 for built in fridge
$3000 for undercounter fridge or 2nd dishwasher
$10,000 for upgraded stair system
$60,000 for flooring
$5,000 for bathroom surrounds
$1000-$5000 for surround wiring and/or whole house audio
Lots more options that will nickel and dime you to death like extra outlets, on demand pump, paint, trim, window treatments, closet organizers, etc.

It's so easy to spend over $150k right off the bat if you wanna customize a hi end home and don't watch the bottom line.  Most ppl will have to make compromises, unless they have deep pockets.

And we haven't even talked about the driveway, porch and backyard yet.

 

[irvinehomeowner]

@OCgasman:

For a 3500sft home that's in the $1.5m+ range, many of those upgrades you listed should be standard.

 

[paperboyNC]

I must really be a 99%er.

If I'm buying a brand new home and it cost more than $1m, I don't see why I would have to pay another $300k. The $1m+ should include some of that high end stuff already.

#1stworldproblems

Amen to that! Why do they give you thermafoil and crap carpet throughout the place when paying so much. Have you seen the standards the builders give in Atlanta - first class all the way for a $500k home on 1 acre. And we get nothing - sometimes I feel like we're living in Manhattan for the size of home and prices they demand.

The problem is people (suckers) just pay the $$ through their nose so why wouldn't big business take advantage.

Disagree. Here in Irvine many homes really maximize their land with a "California Room", outdoor kitchen, jacuzzi, putting greens, garden, fire pit, etc. In the Atlanta area most homes just have grass. Often there isn't even a fence between them and their neighbors. It looks pretty awful IMO.

Look at Bing birds-eye views of an Irvine development compared to a Atlanta 'burbs development. Yeah - there is a ton of land and not many houses in Atlanta but they really don't do anything with the land other than grow and mow grass.

 

[lnc]

These upgrades are money maker for the builders.

Buying a newly built home is a lot like buying a new car at the dealership?optional features cost extra.

And upgrades can be a lucrative part of a builder's business, with profit margins as high as 60%, depending on the option, according to John Burns Real Estate Consulting.

Some builders present buyers with thousands of choices that let them build a near-custom home that won't resemble anything else in their community. Customizing a home can make a customer less likely to cancel the deal. "They're emotionally attached to what they have designed," says Joan Marcus-Colvin, senior vice president of sales, marketing and design for the New Home Co. "They have actually pictured themselves living in that surrounding."

The New Home Co., a three-year-old upscale builder in California with starting prices as high as $2 million, took in $9 million from its design studios in 2012, up from $7.6 million the prior year.

http://online.wsj.com/news/articles/SB10001424127887323807004578286431278261250

 

[Irvinecommuter]

These upgrades are money maker for the builders.

Buying a newly built home is a lot like buying a new car at the dealership?optional features cost extra.

And upgrades can be a lucrative part of a builder's business, with profit margins as high as 60%, depending on the option, according to John Burns Real Estate Consulting.

Some builders present buyers with thousands of choices that let them build a near-custom home that won't resemble anything else in their community. Customizing a home can make a customer less likely to cancel the deal. "They're emotionally attached to what they have designed," says Joan Marcus-Colvin, senior vice president of sales, marketing and design for the New Home Co. "They have actually pictured themselves living in that surrounding."

The New Home Co., a three-year-old upscale builder in California with starting prices as high as $2 million, took in $9 million from its design studios in 2012, up from $7.6 million the prior year.

http://online.wsj.com/news/articles/SB10001424127887323807004578286431278261250

Sure...but it's really no different than buying upgrades for your car.  You can get a lot of the stuff aftermarket but threat of "voiding of warranty" gets people.

 

[iacrenter]

I must really be a 99%er.

If I'm buying a brand new home and it cost more than $1m, I don't see why I would have to pay another $300k. The $1m+ should include some of that high end stuff already.

#1stworldproblems

Amen to that! Why do they give you thermafoil and crap carpet throughout the place when paying so much. Have you seen the standards the builders give in Atlanta - first class all the way for a $500k home on 1 acre. And we get nothing - sometimes I feel like we're living in Manhattan for the size of home and prices they demand.

The problem is people (suckers) just pay the $$ through their nose so why wouldn't big business take advantage.

Disagree. Here in Irvine many homes really maximize their land with a "California Room", outdoor kitchen, jacuzzi, putting greens, garden, fire pit, etc. In the Atlanta area most homes just have grass. Often there isn't even a fence between them and their neighbors. It looks pretty awful IMO.

Look at Bing birds-eye views of an Irvine development compared to a Atlanta 'burbs development. Yeah - there is a ton of land and not many houses in Atlanta but they really don't do anything with the land other than grow and mow grass.

But looks at the setback distances between homes--drool worthy! Even if you don't "maximize" your whole yard, what price do you put on privacy?

 

[OCgasman]

@OCgasman:

For a 3500sft home that's in the $1.5m+ range, many of those upgrades you listed should be standard.

As you know, a lot of the builder's profit margin comes from upgrades so while some standard stuff is "nice", most ppl will upgrade to their personal preference.

Some examples:

Structural options are some of the most expensive options but if someone wants them, they'll pay for them.  Converting the tandem garage to usable interior space (I know, blasphemy to you ). Bifold or stacking doors, freestanding tub, etc.

Most hi end homes come with granite countertops, but choices are limited.  If you want marble or quartz, you have to upgrade.

Say you want white real wood cabinetry, those are an upgrade cuz Thermafoil is the standard option for white.  If you like the standard wood colored recessed panel cabinetry then great, you saved a ton of money, but if you want raised panels with a glaze, be prepared to spend some money.

The electrical for recessed lighting is a must, and most (all?) builders don't include them in bedrooms and loft/bonus room or even the great room.

Built in fridges are a cool $10k.

If you're not anal about the stair system, great, you saved money there.  But if you wanna upgrade to wrought iron balusters and wood treads/risers, open the checkbook.

The standard flooring usually sucks so everyone will upgrade those, either thru design center or after COE.

Wanna add a dedicated 220V outlet for your electric car, that'll add $1k.

How about a water softener?  I think these are a must with tankless water heaters cuz of the scale issue inherent in tankless softeners.  That'll be another $4k, thank you very much.

Do you like surround sound for movies and sports but hate free standing speakers for decor?  Well, prewiring costs about $800-$1000.  And that's without the speakers.

What if the wife loves the cased opening at the model and has to have them?  Another $3k please.

I can go on and on.

Bottom line, most people buying a $1M+ house will usually upgrade items to their (wife's mostly) personal taste.  Nobody needs the upgrades, the house will be fine standard.  But, everyone wants some upgrades.

And we haven't even discussed landscape/hardscape yet.

 

[Irvinecommuter]

I must really be a 99%er.

If I'm buying a brand new home and it cost more than $1m, I don't see why I would have to pay another $300k. The $1m+ should include some of that high end stuff already.

#1stworldproblems

Amen to that! Why do they give you thermafoil and crap carpet throughout the place when paying so much. Have you seen the standards the builders give in Atlanta - first class all the way for a $500k home on 1 acre. And we get nothing - sometimes I feel like we're living in Manhattan for the size of home and prices they demand.

The problem is people (suckers) just pay the $$ through their nose so why wouldn't big business take advantage.

Disagree. Here in Irvine many homes really maximize their land with a "California Room", outdoor kitchen, jacuzzi, putting greens, garden, fire pit, etc. In the Atlanta area most homes just have grass. Often there isn't even a fence between them and their neighbors. It looks pretty awful IMO.

Look at Bing birds-eye views of an Irvine development compared to a Atlanta 'burbs development. Yeah - there is a ton of land and not many houses in Atlanta but they really don't do anything with the land other than grow and mow grass.

But looks at the setback distances between homes--drool worthy! Even if you don't "maximize" your whole yard, what price do you put on privacy?

I guess it depends on your lifestyle.  We don't use our yard and keep all our blinds closed 99.99% of the time (to keep out the sun).  Also, we are fortunate to have very quiet neighbors and no pets.  I guess it worked out very well for us but could work out not so well for many others.

 

[iacrenter]

I must really be a 99%er.

If I'm buying a brand new home and it cost more than $1m, I don't see why I would have to pay another $300k. The $1m+ should include some of that high end stuff already.

#1stworldproblems

Amen to that! Why do they give you thermafoil and crap carpet throughout the place when paying so much. Have you seen the standards the builders give in Atlanta - first class all the way for a $500k home on 1 acre. And we get nothing - sometimes I feel like we're living in Manhattan for the size of home and prices they demand.

The problem is people (suckers) just pay the $$ through their nose so why wouldn't big business take advantage.

Disagree. Here in Irvine many homes really maximize their land with a "California Room", outdoor kitchen, jacuzzi, putting greens, garden, fire pit, etc. In the Atlanta area most homes just have grass. Often there isn't even a fence between them and their neighbors. It looks pretty awful IMO.

Look at Bing birds-eye views of an Irvine development compared to a Atlanta 'burbs development. Yeah - there is a ton of land and not many houses in Atlanta but they really don't do anything with the land other than grow and mow grass.

But looks at the setback distances between homes--drool worthy! Even if you don't "maximize" your whole yard, what price do you put on privacy?

I guess it depends on your lifestyle.  We don't use our yard and keep all our blinds closed 99.99% of the time (to keep out the sun).  Also, we are fortunate to have very quiet neighbors and no pets.  I guess it worked out very well for us but could work out not so well for many others.

If you have an IHOview lot like me, you wish your setback distances were like Atlanta 

 

[irvinehomeowner]

If you have an IHOview lot like me, you wish your setback distances were like Atlanta 

Nicely played.

 

[irvinehomeowner]

@OCgasman:

For a 3500sft home that's in the $1.5m+ range, many of those upgrades you listed should be standard.

As you know, a lot of the builder's profit margin comes from upgrades so while some standard stuff is "nice", most ppl will upgrade to their personal preference.

But that's the problem, as long as people pay for the upgrades, the builders will keep padding their profit. Most of those things you listed don't cost what the design center is selling them at. And again, at $1.5m+, stuff like real wood kitchen cabinets, upgraded counters, upgraded stair railing and even flooring needs to be "standard". If people don't complain, they won't do it. Remember when granite used to always be an upgrade? Or tall baseboards?

When we were looking at some homes in PP, I was astounded at how much cheaper their "upgrades" were compared to TIC projects.

If you're spending $300k on upgrades on a $1m (or even $1.5m) home you are either:

1. Getting ripped off by the builder
2. Putting gold toilets in your bathroom

If you don't agree with #1... that's why every "luxury" home now has just a Great Room and a 2 car garage.