Help for Homebuyers

The local homebuilding market has been stimulated by two groups recently: those who are looking to graduate from apartment living and those looking to downsize from
larger homes.

For those currently renting, skyrocketing rental rates versus the cost of owning, privacy concerns and the restrictions of apartment living have pushed a whole new population to consider a new home purchase. The move down buyer – those looking to reduce living costs and lower maintenance expenses – has also been very active the past two years and this trend is expected to continue. Those looking to downsize have benefited from a stronger market in general and a greater ability to sell their existing homes at reasonable prices.

One of the biggest problems for these two groups of buyers is a limited choice in new home construction as many builders have pulled out of the area and the resale market has fewer and fewer quality homes coming to market. However there are still good choices out there if you are patient.

As you look to move out of an apartment to stop paying rent and invest in your future or if you are looking to downsize from a larger home, picking the right home can be a confusing proposition. Kay Builders tries to make the process less confusing and prides itself on being honest and straightforward with customers. Here are some areas where you can get led astray:

Homeowner’s Association Fees

If you are looking at a community with a homeowner’s association, find out what you are getting for the monthly fee and be wary of low introductory deals for monthly fees. For example, some builders will say their association covers roof repair and replacement. Ask yourself why should you pay for an event that may happen once every 30 years when it may be unlikely you will still be in the home.

Another problem is low initial monthly rates that skyrocket after the builder is done constructing the community. Builders will often understate the monthly fees for maintenance and repair only to leave the homeowner with excessive fees down the road. Make sure to have an expert review the budget. Most Kay Builders communities have a very limited homeowner’s association with very low fees because Kay believes you should – not the association – should decide how and when you want to spend on maintenance and repair.

Kay would rather see you spend that extra monthly amount on home options or increased square footage in your home.  For every $25 less you spend per month on homeowner’s association fees you can afford to spend $5,000 more on your home.

Own Your Lot

Consider how important it is for you to have unrestricted use of your property. Chances are if you are leaving an apartment you want less restrictions on daily living and if you are leaving a bigger property you are used to doing what you want when you want on your property.  Kay Builders likes to give more flexibility in outdoor use and does not allow its homeowner’s associations strict control of your property.

Consider whether the ability to add a fence, patio, extra landscaping, shed or larger deck is important and make sure your new community does not prohibit such activities. It is important that a homeowner’s association, if there is one, provides just enough control to prevent owners from not maintaining their outside areas and adding off color or less tasteful outdoor items, but not greatly restrict the usage of your property. Kay Builders  believes is that if you pay that much for a home you should own the land under it giving you a great deal of flexibility in what you do on your land.

Incentives

Although the level of incentive has decreased dramatically as the market continues to improve, be wary of those that remain. Many builders will offer special financing arrangements, discounted pricing, or free upgrades. However, read the fine print and do your homework. For example, sometimes the seller of a home may advertise financing that very few people will qualify for as a means to get you in the door.

Another trick is to overinflate the price
of the home and give a greater incentive in the form of sellers assist or
steeper discounts.

Finally, other builders may promote a very low price, but will include a bare bones specification in the home so that it is nearly impossible to purchase a reasonably comfortable home without adding $50,000 of upgrades.

Obviously, do you research and make sure you are comparing apples to apples when looking at different options. Kay Builders believes in making the decision less confusing and more transparent so you are not fooled by gimmicks. We believe in providing customized incentives that meet each customer’s needs.

You have heard the term you get what you pay for. This term is particularly relevant to homebuilding. Because there are so many items and materials that go into the construction of a home, it is easy to build a home that looks nice but may not last. Kay Builders provides great construction and great curb appeal.

Including materials such as masonry facades and architectural metal roofs, block party walls, hand framed 2 x 10, 16’ on center construction, tile floors, Corian tops and 4000 PSI concrete really adds to value. So, it is important to look at what trades and subcontractors are used as there is a wide variance in these skills. Remember that the most stable companies are able to attract the best tradesman and often use the best materials for only a few dollars more.

Rick Koze is President of Kay Builders, Inc. which has served the Lehigh Valley exclusively for 55 years.  He is and graduate of Emmaus High School and holds a BA in Economics from Yale University.  The company has tripled in size since 2011 and will have six communities locally by the end of 2015.