At a recent meeting of the Builder/REALTOR® Alliance Committee, a panel of builders answered questions regarding new construction. Here are some of the responses we thought you might find valuable.
Below are responses to the following three questions:
- Are the home warranties/manufacturer warranties that pick up coverage after their builder warranties expire adequate coverage or do you recommend homeowners purchase additional warranties? Giorgio Bittoni, Bittoni Homes
- Sometimes I’ve felt out of the loop with builders I’ve worked with. How can I become more active in the process so I have more leverage and knowledge when problems do come up? Dllona Shortle, Luxona Custom Homes
- What determines whether or not a parcel of land gets developed? Bob Barlow, Duffy Homes
Are the home warranties/manufacturer warranties that pick up coverage after their builder warranties expire adequate coverage or do you recommend homeowners purchase additional warranties?
Giorgio Bittoni, Bittoni Homes
The buyer always has the option of purchasing one of several home maintenance plans. Some builders offer extended warranties which are usually limited to structural items such as the foundation, roof, framing, etc. If the buyer is concerned with short term resale, then these extended warranties may offer a wonderful marketing asset as most are transferable.
I would place more emphasis on doing your homework during the builder interview process so as to select a builder with an excellent record and reputation. Most reputable builders will stand behind their product after the warranty has expired.
Sometimes I’ve felt out of the loop with builders I’ve worked with. How can I become more active in the process so I have more leverage and knowledge when problems do come up?
Dllona Shortle, Luxona Custom Homes
Be proactive! Decide how you want to be involved and how you can help the process. Make a list of what you can and are willing to do. Emphasize your relationship with your clients. The strength of that relationship can assist the builder, your client and you through rough spots.
Begin by pre-qualifying your client by what they can/want to afford and by the type of builder who is a fit for them (production, semi-custom, custom, price range, flexibility, locations, size of builder, personality, etc.). Register your clients and introduce them to the builder representative. Let the builder know why you selected them. That gets the builder’s attention!
Ask the builder how you can help. Learn how they work with Realtors®. Express your strong interest in being involved and ask them to outline their process for you. You and your client need to know what happens and when. Make certain the builder knows what you can do.
Create a supportive partnership with your client and the builder. Be a facilitator to enhance the client-builder relationship. Help your client understand the builder’s process and the importance of meeting deadlines. Builders too must understand your client’s wants and needs.
Stay involved. Keep in touch with your client and the builder. Is it progressing from their points of view? Do they understand what is happening? Is the builder communicating with the client? Is the client responding to the builder? Are they happy with the progress?
Ask the builder to include you in correspondence to the client. Email is prevalent today. Ask them to copy you. If you do not hear from either, call. Make sure everything is going smoothly.
Provide feedback to both. Say what a great job the builder is doing (assuming, of course, it is a great job). Tell the builder how happy your client is (assuming, of course, your client is happy). Positive feedback strengthens relationships.
When challenges do arise, act as a mediator to help each understand the other. Bring it to a positive conclusion.
When working with a builder who has several representatives, choose a representative you like, and build rapport. Regardless of whether you have an exclusive buyer’s agreement, treat the builder as a valued partner, a professional who is vital to the process and valuable to you and your client.
If the builder does not respond in kind, find a builder who will. Not all builders are a match for all clients and all REALTORS®. Many builders value REALTOR® business. Find them. They will support you and include you in the process.
What determines whether or not a parcel of land gets developed?
Bob Barlow, Duffy Homes
There are many factors as to why a piece of land may set vacant for many years and not be developed.
The main question that a developer looks at when they would like to buy a piece of land and develop it into, say residential lots, is “Will the final lot price be marketable at the price a developer will have to charge for it?”
For many years on the way up Riverside Drive to the Columbus zoo we would drive by what is now Wedgewood Golf & Country Club. We would think, Why hasn’t that land been developed? Finally the time came to market that area as a golf community and to justify the final costs of the land and develpment costs. The availability of water and sewer also come into play as to when a piece of property is developed.
I know of an elderly couple who lived in an older home with many, many trees around it. All the land around them was developed into homes and everyone would look at this piece of property and say Why don’t they build homes there? I’m sure the money that this couple got for this land would not be spent in their lifetime, thus their children would probably inherit it. It meant more for this older couple to live in this home than all the money they would receive for it. A lot of undeveloped land around central Ohio is probably in contract waiting for the owner to decide to move.
In some cases people just want too much money for the land. The land must be purchased at a price that would allow a developer to add the development cost and their other expenses to arrive at a lot price that is marketable in that area.
Although it’s difficult to summarize all of the reasons, here are a few other factors:
- There may be a lot of underground rock which can mean blasting and hauling costs.
- Some soil may not support the homes foundation without a lot of additional costs.
- Trees are becoming an expensive feature. Some areas make the developer and builder pay or replace every tree that was removed to put in the streets and the home. (Note that this does not include the very small trees, there is a size guideline)
- Some areas the soil may be contaminated and thus to satisfy the govermental agencies the soil may have to be removed and trucked away.
- Zoning of the land around the piece of property; reputation of schools; location to shopping and parks; traffic and feeder roads to get to work; etc.
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