Answer:

1. Why don't most homebuilders install gutters, storm doors, blinds and other accessories when they are selling a home?

To answer this question, you must first understand that homebuilding is a business. Businesses typically provide a service or sell a product for a certain profit. The difference between homebuilding and other businesses is that there is a "cap" on the price they can charge for their product or service.

The association that sets this price "cap" is real estate appraisers. Keep in mind that this association normally does not work for you, it is set up to serve the financial sector, (mortgage companies or banks). If you have cash to build a home, you can have what ever you want with the amount that you have. Lenders do not see it the same way. The lender wants to make sure that if you do not make your payments and they have to foreclose, that they will be able to recoup or make back what they have invested. If your home is built above "the standard" for a particular area, the lender knows that it may be difficult to sell once in forclosure. "The standard" is a big gray area that often causes conflicts between homebuilders and appraisers.

Most homebuilders would like to build with higher quality materials, more trim, higher R-factor insulation, provide much better landscaping, add more architectural details, and pay more closing costs for the home buyer. The homebuilder is restricted though, by "the standard" price for a particular square footage. The appraisal system forces the homebuilder to juggle all of the features in a home and upgrade where he sees that the funds available will be put to the most important use. The funds that are left are the builders profit or profit margin. Yes, a builder can easily upgrade a home so much that it costs more to build than the home will appraise.(Leaving the builder to cover the difference after the bank lends its maximum amount).

To answer the question, some items that a builder upgrades may add to the price or appraisal of the home while others do not. Items such as a larger porch, deck, or garage normally build value up to a certain size. Based upon an appraisers guide, gutters, storm doors, blinds, mini-dishes, awnings, and other fixtures add no value to an appraisal. What this means to a homebuilder is that if he provides non-value items, the cost will come directly from the builders profit.

The average person may think that there is huge profit on homes. This is a misconception. Divide the profit by the number of months involved, the risk taken, the cell-phone bills, gas bills, wear and tear on vehicles, and couple that with the fact that material and labor prices fluctuate upwards all of the time, a builder must be a skilled businessman to turn any considerable profit. Don't be offended if a homebuilder rejects some small items in an offer. The builder may be adding some very high quality items in the home that are not in others and it may be well worth the small sacrifice.

If you feel that you need help in determining the quality of one new home versus another home, it would benefit you to hire MyGoldsboroAgent to assist you in your new home search or to build and design the home of your dreams. MyGoldsboroAgent works with recommended builders and others of your choice as well.

Other Recommended Reading: New Construction "I wouldn't do that again!"

Weldon & Jenifer Williford, REALTORS

MyGoldsboroAgent.com