Building vs. Buying An Existing Home- Utah

After spending the last several weeks with a couple looking at new Utah homes & existing Utah homes, I had to ask myself which is a better deal right now?

Well after spending hours of research I have come to the conclusion that it really depends on what county you are in and the builder.

 I am astonished that Utah has so many different builders building the same exact home, but at different prices. We aren't just talking a few thousand dollars either! Some were $5,000-$70,000 more for the exact same home.

One builder amazed me when he built a home that was the same square footage, lot size, and upgrades as the other builders, but he finished 65% of the basement and he was only priced $6,000-$7,000 more.

The best part about this builder is he was willing to buy lots if he didn't have a lot in the area you wanted. The only catch was the lot had to be at a certain price to make this whole thing work. Either way I was really impressed by him and his work.

Out of all the builders I met with, there was only one builder not willing to pay a buyers agent commission. Needless to say I wasn't surprised to see him only doing a fraction of the building that his competitors were doing.

So please always use a buyers agent when building a new home. You need someone looking out for you, not the builder. Plus it won't cost you anything!

In conclusion, if you are debating whether to buy an existing home or having one built please contact a buyers agent  to go over the pros & cons before making a decision.

  • November 07 2010 - West Haven
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Answers (5)

As a buyer's agent for new homes I definitely agree with you.  As an expert on new homes I have first hand knowledge of some deals that the general public does not have or doesn't have the time to dig for them all.  I can definitely provide a service to new home buyers at now cost to them.  Thanks for the post!
  • November 23 2010
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Justine -

 Did you get an independent buyers agent yourself or did you do it yourself?
  • November 23 2010
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If you want someone looking out for your interests, hire an inspector to be there during the construction, and an architect to write the specification and contract documents, and to do construction administration including review of all submittals, and rejecting any construction and insisting on tear-down and rebuild if built without submitting, and if closed in before the inspector checked.

Don't trust a Real Estate Agent to do these things for you.  They have absolutely no experience in construction administration and inspections.  They don't even have any experience in construction contract documents.  Most of them couldn't even read a set of construction plans correctly even if you gave them 10 weeks to do it.

Of course the builders are all willing to pay a buyers' agent... the buyers' agent is bringing a buyer and making a sale, thus earns the "sales commission", and the list price is already marked up to account for that.

Of course they won't tell you that if you go into the sales office without representation that you often can get more concessions and better price and/or terms.

Nor do the agents tell you that in most cases, it costs less to buy existing than to pay present labor rates and present materials costs.  Nor do they tell you how the quality of materials used has decreased over the past century.  Try to find anyone building with 100% heart redwood now, or even cedar.
  • November 23 2010
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And really, if one builder builds only 10 houses per year, but does excellent craftsmanship and is involved in the entire process, and sells at 20% below the competition for the same neighborhood  size and amenities, and the other contractors build 100 houses or more per year using the cheapest materials available and day laborers hired illegally without visa or work permits and work is not even inspected to minimum building codes and they charge 15% over present market value, why are you suggesting that one that does more is better?  Who wants a cookie cutter from a cookie cutter builder anyway?
  • November 23 2010
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Certainly there are home builders out there who have variances in pricing with same or similar "included features".  

Please remember that what is behind/in the walls, in the foundation, and in the attic can comprise a lot of cost.  For example, if one builder is using 2x10's or 2x12's and another is using TGI's, the TGI's are more costly, can bear more load and there are engineering reports to substantiate.  Neither of these are usually code restrictive but one is definitely better than the other.

Another example is foundations:  Two builders may do post-tension foundations but one is using using piers and another one is not or deeper, thicker footings, etc.  Certainly some agents may not have a lot of construction experience but some of them do.  

Find out these types of details because the true quality of a home is what makes up the structure, not just the appliances, light fixtures, and such.

Most reputable builders will not want to offer a better deal to a buyer without a real estate agent if a large portion of their business is driven by agents.  However, in times like this, these things can happen.  

My comments are based on my 9 years of new home builder experience.  

Best of Luck!
  • November 24 2010
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