QUAD CITIES REAL ESTATE WITH RE/MAX
SERVING THE ENTIRE IOWA AND ILLINOIS QUAD CITIES ............................................................
DAVENPORT - BETTENDORF - ROCK ISLAND - MOLINE AND SURROUNDING COMMUNITIES
TOM & CYNDEE BROWNER CRS, ABR, GRI, e-PRO, CRB, MRA
BROKER OWNERS OF RE/MAX BI-STATE - SERVING IOWA & ILLINOIS
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We are both Accredited Buyers Representatives (Certified Buyer's Agents) we know you want to make the best decision. You want the best home possible for your investment. We know the market, and we work at your pace and not ours. We will guide you through all the forms, take you through the first time buyer programs and/or financing, inspections and explain everything each step of the way. We take care of all the details and problems before they become a problem to you. Call us on our private line at 570-7629 at RE/MAX BI-STATE or Contact us at firstname.lastname@example.org - LOOKING TO SELL? Check out the services an Certified Residential Specialist can mean to you.
NEW CONSTRUCTION OR A PRE-OWNED HOME?
For each buyer, the answer has to be different. In this up economy, the decision is not as critical as in a stagnant or down economy. When everything is going up, it is hard to make a mistake. Within two to three years you can sell any new construction without losing money with appreciation in the double digits in our market.
New construction is a formula. It is the cost of the land ($15,000 to $50,000), improving the land (about $12,000 to $15,000), materials ($40,000 to $60,000), Labor ($40,000 to $60,000) plus 20 to 25% for the builder, bank interest, realtor, and your small changes. There is no new construction under $90,000 and the less expensive homes tend to be built in old subdivisions that were developed over 15 years ago and abandoned by the builders during our crunch period as the tractor industry left our area. These lots are cheaper and already developed, allowing less expensive new construction to be built. Unfortunately, these often tend to be less desirable areas and thus have been slow to sell. Premium new areas have healthy lot and development cost and therefore, the starting prices are in the $180,000 range and to up to $300,000. Super lots will drive prices even higher.
The advantages of new construction is obvious. Everything is new, there are no weeds in the yard, the furnace, kitchen, carpet, roof, etc... is all new. There are not going to be any repairs or replacement cost to deal with. The homes are in like subdivisions and once the subdivision is completed a resale market will be established. While building continues, your home has to compete with the new construction and will bring less money, but you probably do not intend to move for a long time unless you are a corporate buyer, in which case you have a buy out protection if you are transferred. If it is a large subdivision, it can take years for construction to be completed. This will reduce the value of your new home in the short run, but because building cost always go up, the last homes will usually be smaller than yours and will sell for more money. As the pre-owned market for your subdivision develops, you will appear to be a better value because of larger size. If you are the last to buy, you may need to upgrade some things to increase your resale later. However, you are the first family in the door, no one's pet or smoking odors, no carpet stains, everything is new and fresh. You have made it and can now afford to live in a home of your choice without compromise. A disadvantage is that the basement is unfinished, you will need to wallpaper, install curtain rods, drapes and other decorating that make the new house, your home. So after purchase plan to spend another $2000 to $6000 on decoration.
The disadvantages are that your new home will either cost a lot more or be a lot smaller than pre-owned homes. Your subdivision will not have established a resale record, and this will be an unknown at the time you buy. How the market will judge your new subdivision in future years will depend on how the cities expand and what is built in the future in the area.
Pre-owned homes have the disadvantages of needing over time replacement of the mechanicals, roof, carpet, etc... These cost will fall on you the home owner over time. The advantages are that they cost less, are usually larger, the neighborhoods are already established and have a resale track record. Other advantages are that the first owners installed the curtain rods and blinds, finished out the basement, did the extra landscaping, and added the wall paper and other expensive after the purchase expenses. Older homes are more affordable, but are built to the standards of the time built. What is called functional obsolescence. Typical of old homes are unusable basements, usually wet (at least somewhere), galley kitchens, no family rooms, small closets and one car garages. Their advantages are large dining rooms, wonderful arches, woodwork, wood floors, living room fireplaces, built in book cases, shelves, buffets, higher ceilings and other antique features.
Newer pre-owned homes have recreation rooms, drain tiled basements, one or two car garages, maintenance free siding and larger kitchens. They tend to have been built in the 60's and early 70's, and reflect the taste of the times, which are not too different than today. Again their cost are less and compared to new construction are larger, The lower cost allows more home buyers into the market especially at today's still low interest rates. Again, the previous owners have added the extra bathroom, finished the rec/room and other rooms. Often they have replaced the roof, furnace and perhaps the bathroom or kitchen. The disadvantages are that you may have to repaint, replace carpet or drapes, roof, furnace or other items over the near term after purchase, thus increasing your cost.
In a stagnant market, new construction takes longer for you to recover your expense for all new. In this market, there is no real risk after a couple of years of ownership, just a higher initial price tag.
If you would like to sit down and discuss and compare what is best for you, give us a call, we would be happy to help you.
Check out these new construction and previous new construction floor plans
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