5 Tips on How To Make Money Building A Home in Minnesota!
Building has changed a lot since 2008. Builders changed their business model. They started figuring out what people wanted and what people will notice not being there.
I was in a big builder’s model the other day, and they didn’t have any trim around the windows. Is trim needed, no it is just cosmetic, but it is interesting that they have cut this out? What got me was they also got rid of the closet doors. They had a lovely walk-in closet, but they assume people will now hang the decorative curtain.
These little cost saving that the builders has done, add up to more profit and less home. You need to keep your eye on these differences since this may not be worth buying a new home if the list of things missing is more than you can handle.
- Look at both Pre-owned and New Construction. I get it. You want a new home. Clean and shine and that new home smell. Well, that home will smell a lot different if you buy it wrong. Life may change and you may have to sell it and guess what, no one wants to pay you what you need if you make uneducated decision in building or buying a new construction home. (See our buyers guarantee).
- Understand how lot location (The Land) matters. Lots that are on busy throughways, corners and backed up to something ugly or odd shapes are tougher to sell. Lots that are the perfect view of the park, lake, are the big pie shape of the cul-de-sac or pond you may have to pay more but your home can sell fast and for more in the future.
- Finished Basement or Not? The builder will offer to finish the basement for you. This maybe worth it. I have seen builder finish basements for $35,000. Later on, in that same neighborhood, others paid contractors to finish the basement, and it cost anywhere from $50,000 to $75,000. You will also have to remember that a finished basement is going to jump up your property taxes and your monthly payment. When you first get your loan payment, you will get on pay taxes on your lot depending on when the home was built. The next year you will be paying the full tax amount, and this will affect your payment. If your basement is finished your taxes will be higher; your payment will be higher.
- Buy the Model or closet out models. As neighborhoods get finished, the builder may have built a spec homes and or the model itself. These homes will be offered at a discount as they want to move their sales staff and everything to the next to the neighborhood. You have to know what the other homes sold for and what options they have. These also may not be on the best lot, but if you get 100k off what others sold for, than you will make money when you sell. This worked for me with one of my clients when we found her a home that was $350,000, and we got it for $315,000. That home is now worth $425,000.
- Use a good Realtor. If your working with a Big Box builder or a Custom Builder they build the commission into the price. The reason why I say “good” is you want to pick your realtor’s brain about changes you make and if it will affect the sale of the property. Forward thinking is good because you may never have to sell but having the idea that you may sell it may keep you from overspending on things that won’t make much difference down the road. A Realtor can also gift you a portion of the commission if you need help with something.