Additional Cost and Options for New Home Purchase

[pricedoutJay]

My purpose of this thread was to gauge what new Irvine home buyers were spending money on upgrades and how much they spend/budget the cost.  I never bought a new home and figured that new homes would result in more additional cost than resale homes for structural addition and landscaping are not really easy upgrades for resale houses.  The poll actually is telling me that the distribution is not a normal curve so about a 2/3 of buyers spend $50k plus but there are 1/3 of buyers who try not to spend too much.  So I think I got what I was looking for.


[/quote]

Sorry, I didn't mean your original post/poll - I get what you are trying to find out but I think you need some narrower parameters to get a better idea from folks here.  My comment was really pointed at the direction of the thread?.
[/quote]

Right.  I understand, but I didn't want to make a full marketing survey to publish either.  Just to see if people are spending extra doh or pretty much with the basic stuff when they buy new homes.

My personal conclusion is that Irvine new home buyers are definitely more well to do than I thought.  I know several friends who bought houses (old and new) and they did minimum upgrades and fix up before they moved in.  But here on this thread, many spend large sum to upgrade many different areas.  So instead of gauging what and how much to spend if I buy a new house, I realized, unless I settle with a smaller house/condo, new house purchase of my like may surprise me with extra cost...

 

[Irvinecommuter]

My purpose of this thread was to gauge what new Irvine home buyers were spending money on upgrades and how much they spend/budget the cost.  I never bought a new home and figured that new homes would result in more additional cost than resale homes for structural addition and landscaping are not really easy upgrades for resale houses.  The poll actually is telling me that the distribution is not a normal curve so about a 2/3 of buyers spend $50k plus but there are 1/3 of buyers who try not to spend too much.  So I think I got what I was looking for.

I guess I would critique the question in that a lot of people do upgrades in that they can "finance" them over the life of the loan.  If you are going with the Design Center, the price goes into the loan.  Since you are "pre-qualified" for your loan ahead of time, you generally spend up to your limit because it doesn't really change your monthly payments much.

This, unfortunately, hurt us because the loan broker told us that we qualified for an amount but failed to tell us that we could only get a loan covering a portion of that.  Thus, we were forced to pay more down payment (and thus nailing us on both ends).

 

[zubs]

I can't see the voting results w/o voting.  You should add a N/A option.  Perhaps some people voted incorrectly due to no NA option.

 

[irvinehomeowner]

My personal conclusion is that Irvine new home buyers are definitely more well to do than I thought.  I know several friends who bought houses (old and new) and they did minimum upgrades and fix up before they moved in.  But here on this thread, many spend large sum to upgrade many different areas.  So instead of gauging what and how much to spend if I buy a new house, I realized, unless I settle with a smaller house/condo, new house purchase of my like may surprise me with extra cost...

I'm with you.

Seems like the ones who actually posted their %s are reasonable but the poll responses are quite high. I'm like your friends... only the minimum but that's because I'm more about function than gold toilets.

 

[eclipxe]

I'm not against new home construction... I'm just not down with new home builder tactics.

And if the new home smell and the FCB bank accounts weren''t so powerful, the consumer could actually have some say in what type of products they get.

Dang... I feel like BK from the IHB days.

You are bk, at least in my mind.  8)

 

[lnc]

My purpose of this thread was to gauge what new Irvine home buyers were spending money on upgrades and how much they spend/budget the cost.  I never bought a new home and figured that new homes would result in more additional cost than resale homes for structural addition and landscaping are not really easy upgrades for resale houses.  The poll actually is telling me that the distribution is not a normal curve so about a 2/3 of buyers spend $50k plus but there are 1/3 of buyers who try not to spend too much.  So I think I got what I was looking for.

That's probably 2/3 of buyers response to the poll bought a home close to $1 million or more.  If you ask buyers of $750k or lower price homes, I believe majority of these buyers will spend less than $50k on top of base price. 

How much new buyer spend on the new home also correlate to the price of the home.  Higher the home prices, higher the buyer's income/wealth and higher the amount they will spend on options.  Also when a new home's price tag approach $2 million,  now it reach "trophy home" category and these buyer tend to spent outrageous amount of money on upgrades.

 

[pricedoutJay]

I can't see the voting results w/o voting.  You should add a N/A option.  Perhaps some people voted incorrectly due to no NA option.

I see the view result button so I figured others could see.  So far 24 of 35 folks voted to spend more than $50,000.  Not too familiar with options for posting and voting...  Let me know if you know how I can fix it...

 

[pricedoutJay]

My purpose of this thread was to gauge what new Irvine home buyers were spending money on upgrades and how much they spend/budget the cost.  I never bought a new home and figured that new homes would result in more additional cost than resale homes for structural addition and landscaping are not really easy upgrades for resale houses.  The poll actually is telling me that the distribution is not a normal curve so about a 2/3 of buyers spend $50k plus but there are 1/3 of buyers who try not to spend too much.  So I think I got what I was looking for.

That's probably 2/3 of buyers response to the poll bought a home close to $1 million or more.  If you ask buyers of $750k or lower price homes, I believe majority of these buyers will spend less than $50k on top of base price. 

How much new buyer spend on the new home also correlate to the price of the home.  Higher the home prices, higher the buyer's income/wealth and higher the amount they will spend on options.  Also when a new home's price tag approach $2 million,  now it reach "trophy home" category and these buyer tend to spent outrageous amount of money on upgrades.

Inc,

I think you actually proved my point.  I'm sure folks buy smaller and cheaper new houses but yet many who votes might have bought $1 mil or higher homes.  It's not that because people buy expensive houses so they spend more on upgrades.  Irvine new home buyers tend to have more money/income than other OC or So Cal middle class (I'm totally guessing here) so they can afford trophy homes.

I really like some new home layouts and plans but either they are Tustin School District (nothing wrong wit Beckman, but I have kids in IUS already so don't want to change schools) or starting high 800k.  If I spend 15% of that, it will easily reach $1millon.  Our income may support that but PITI will be higher than $5000/mo with 20% down.  Right now my expensive yet reasonable house rent payment is $2500/mo.  Again, this poll/thread might have tipped me over to a resale home with 3 or 4 beds at around $750k  I need the listing price to come down about $30k ~ $50k and I see some house have already reduced prices of that amount...

 

[OCgasman]

To the OP:

A more accurate question for your poll would be:

How much did you spend for total upgrades on your house if your base price was <insert your base price here>.  Include structural upgrades to your base price.

Possibly a new poll is needed.  It will more precisely give you the information you are seeking, but probably will decrease your sample size.

 

[OCgasman]

My purpose of this thread was to gauge what new Irvine home buyers were spending money on upgrades and how much they spend/budget the cost.  I never bought a new home and figured that new homes would result in more additional cost than resale homes for structural addition and landscaping are not really easy upgrades for resale houses.  The poll actually is telling me that the distribution is not a normal curve so about a 2/3 of buyers spend $50k plus but there are 1/3 of buyers who try not to spend too much.  So I think I got what I was looking for.

That's probably 2/3 of buyers response to the poll bought a home close to $1 million or more.  If you ask buyers of $750k or lower price homes, I believe majority of these buyers will spend less than $50k on top of base price. 

How much new buyer spend on the new home also correlate to the price of the home.  Higher the home prices, higher the buyer's income/wealth and higher the amount they will spend on options.  Also when a new home's price tag approach $2 million,  now it reach "trophy home" category and these buyer tend to spent outrageous amount of money on upgrades.

Inc,

I think you actually proved my point.  I'm sure folks buy smaller and cheaper new houses but yet many who votes might have bought $1 mil or higher homes.  It's not that because people buy expensive houses so they spend more on upgrades.  Irvine new home buyers tend to have more money/income than other OC or So Cal middle class (I'm totally guessing here) so they can afford trophy homes.

I really like some new home layouts and plans but either they are Tustin School District (nothing wrong wit Beckman, but I have kids in IUS already so don't want to change schools) or starting high 800k.  If I spend 15% of that, it will easily reach $1millon.  Our income may support that but PITI will be higher than $5000/mo with 20% down.  Right now my expensive yet reasonable house rent payment is $2500/mo.  Again, this poll/thread might have tipped me over to a resale home with 3 or 4 beds at around $750k  I need the listing price to come down about $30k ~ $50k and I see some house have already reduced prices of that amount...

I'm not sure your hypothesis is correct about Irvine folks being more affluent.  Newport Beach, CdM and Coto owners probably have higher incomes and net worth.  In general, higher priced homes will get more and higher priced options no matter the area.

You don't have to get all the options.  Standard is fine.  It's your house, upgrade as you see fit or don't.  It's just that most people want to upgrade...at least a little.  A resale doesn't necessarily mean you'll save money.  Every single resale I've seen needed some type of updating or renovation depending on how OCD you are and the vision of your wife.  Even recently renovated homes really depends on how they renovated.  If the interior doesn't fit the style you and wife like, well you're gonna have to redo it unless you're low maintenance and can live with anything.  For us, my wife always wanted to tear out the kitchen and start all over for every resale we visited.  And I always wanted to redo every backyard.  Also, really depends on what kind of layout you prefer.  Formal dining/living room vs giant great room/dining area/kitchen layout.  Good luck.

 

[bones]

asdf

 

[Irvinecommuter]

My purpose of this thread was to gauge what new Irvine home buyers were spending money on upgrades and how much they spend/budget the cost.  I never bought a new home and figured that new homes would result in more additional cost than resale homes for structural addition and landscaping are not really easy upgrades for resale houses.  The poll actually is telling me that the distribution is not a normal curve so about a 2/3 of buyers spend $50k plus but there are 1/3 of buyers who try not to spend too much.  So I think I got what I was looking for.

That's probably 2/3 of buyers response to the poll bought a home close to $1 million or more.  If you ask buyers of $750k or lower price homes, I believe majority of these buyers will spend less than $50k on top of base price. 

How much new buyer spend on the new home also correlate to the price of the home.  Higher the home prices, higher the buyer's income/wealth and higher the amount they will spend on options.  Also when a new home's price tag approach $2 million,  now it reach "trophy home" category and these buyer tend to spent outrageous amount of money on upgrades.

Inc,

I think you actually proved my point.  I'm sure folks buy smaller and cheaper new houses but yet many who votes might have bought $1 mil or higher homes.  It's not that because people buy expensive houses so they spend more on upgrades.  Irvine new home buyers tend to have more money/income than other OC or So Cal middle class (I'm totally guessing here) so they can afford trophy homes.

I really like some new home layouts and plans but either they are Tustin School District (nothing wrong wit Beckman, but I have kids in IUS already so don't want to change schools) or starting high 800k.  If I spend 15% of that, it will easily reach $1millon.  Our income may support that but PITI will be higher than $5000/mo with 20% down.  Right now my expensive yet reasonable house rent payment is $2500/mo.  Again, this poll/thread might have tipped me over to a resale home with 3 or 4 beds at around $750k  I need the listing price to come down about $30k ~ $50k and I see some house have already reduced prices of that amount...

If you can rent a house for $2,500, you definitely should stay there.  But most rental are $3,500-$4,000 these days.  Factoring in the tax deductions for the $5,000 PITI, you come out about even.

 

[lnc]

Inc,

I think you actually proved my point.  I'm sure folks buy smaller and cheaper new houses but yet many who votes might have bought $1 mil or higher homes.  It's not that because people buy expensive houses so they spend more on upgrades.  Irvine new home buyers tend to have more money/income than other OC or So Cal middle class (I'm totally guessing here) so they can afford trophy homes.

I really like some new home layouts and plans but either they are Tustin School District (nothing wrong wit Beckman, but I have kids in IUS already so don't want to change schools) or starting high 800k.  If I spend 15% of that, it will easily reach $1millon.  Our income may support that but PITI will be higher than $5000/mo with 20% down.  Right now my expensive yet reasonable house rent payment is $2500/mo.  Again, this poll/thread might have tipped me over to a resale home with 3 or 4 beds at around $750k  I need the listing price to come down about $30k ~ $50k and I see some house have already reduced prices of that amount...

If the new house is your first house, a starter home, than I would try to be as frugal as possible on the upgrades.  Most people spend far less on their first home than their move up homes.

There's good chance that you will out grow this home in the future and move up to something bigger and more expensive.  You may or may not recuperate these additional upgrade when you sell.  If you put 50k of upgrades, you may not sell your home $50k more than your neighbors. 

Also when you move up to a bigger home, you might want to keep this one as a rental property.  If you have expensive upgrades like expensive hard wood flooring, shutters, ceasarstone counter tops, etc., there's good chance the future tenants will damage them.  When you have expensive upgrade in the home, sometimes just makes it hard to turn into a rental.  In the other hands, if you keep your upgrades to a minimum, it would be a good choice for future rental.  Expensive upgrades doesn't necessary fetch higher rental income. 

 

[OCgasman]

Inc,

I think you actually proved my point.  I'm sure folks buy smaller and cheaper new houses but yet many who votes might have bought $1 mil or higher homes.  It's not that because people buy expensive houses so they spend more on upgrades.  Irvine new home buyers tend to have more money/income than other OC or So Cal middle class (I'm totally guessing here) so they can afford trophy homes.

I really like some new home layouts and plans but either they are Tustin School District (nothing wrong wit Beckman, but I have kids in IUS already so don't want to change schools) or starting high 800k.  If I spend 15% of that, it will easily reach $1millon.  Our income may support that but PITI will be higher than $5000/mo with 20% down.  Right now my expensive yet reasonable house rent payment is $2500/mo.  Again, this poll/thread might have tipped me over to a resale home with 3 or 4 beds at around $750k  I need the listing price to come down about $30k ~ $50k and I see some house have already reduced prices of that amount...

If the new house is your first house, a starter home, than I would try to be as frugal as possible on the upgrades.  Most people spend far less on their first home than their move up homes.

There's good chance that you will out grow this home in the future and move up to something bigger and more expensive.  You may or may not recuperate these additional upgrade when you sell.  If you put 50k of upgrades, you may not sell your home $50k more than your neighbors. 

Also when you move up to a bigger home, you might want to keep this one as a rental property.  If you have expensive upgrades like expensive hard wood flooring, shutters, ceasarstone counter tops, etc., there's good chance the future tenants will damage them.  When you have expensive upgrade in the home, sometimes just makes it hard to turn into a rental.  In the other hands, if you keep your upgrades to a minimum, it would be a good choice for future rental.  Expensive upgrades doesn't necessary fetch higher rental income.

This is really great advice.

 

[paperboyNC]

If the new house is your first house, a starter home, than I would try to be as frugal as possible on the upgrades.  Most people spend far less on their first home than their move up homes.

There's good chance that you will out grow this home in the future and move up to something bigger and more expensive.  You may or may not recuperate these additional upgrade when you sell.  If you put 50k of upgrades, you may not sell your home $50k more than your neighbors. 

Also when you move up to a bigger home, you might want to keep this one as a rental property.  If you have expensive upgrades like expensive hard wood flooring, shutters, ceasarstone counter tops, etc., there's good chance the future tenants will damage them.  When you have expensive upgrade in the home, sometimes just makes it hard to turn into a rental.  In the other hands, if you keep your upgrades to a minimum, it would be a good choice for future rental.  Expensive upgrades doesn't necessary fetch higher rental income.

Good advice. I did not spend almost anything on upgrades. I know I'll have to sell at a discount but it should make it easier to sell.

Also I don't get too upset when my kids damage the house.

 

[Zippohunter]

Inc,

I think you actually proved my point.  I'm sure folks buy smaller and cheaper new houses but yet many who votes might have bought $1 mil or higher homes.  It's not that because people buy expensive houses so they spend more on upgrades.  Irvine new home buyers tend to have more money/income than other OC or So Cal middle class (I'm totally guessing here) so they can afford trophy homes.

I really like some new home layouts and plans but either they are Tustin School District (nothing wrong wit Beckman, but I have kids in IUS already so don't want to change schools) or starting high 800k.  If I spend 15% of that, it will easily reach $1millon.  Our income may support that but PITI will be higher than $5000/mo with 20% down.  Right now my expensive yet reasonable house rent payment is $2500/mo.  Again, this poll/thread might have tipped me over to a resale home with 3 or 4 beds at around $750k  I need the listing price to come down about $30k ~ $50k and I see some house have already reduced prices of that amount...

If the new house is your first house, a starter home, than I would try to be as frugal as possible on the upgrades.  Most people spend far less on their first home than their move up homes.

There's good chance that you will out grow this home in the future and move up to something bigger and more expensive.  You may or may not recuperate these additional upgrade when you sell.  If you put 50k of upgrades, you may not sell your home $50k more than your neighbors. 

Also when you move up to a bigger home, you might want to keep this one as a rental property.  If you have expensive upgrades like expensive hard wood flooring, shutters, ceasarstone counter tops, etc., there's good chance the future tenants will damage them.  When you have expensive upgrade in the home, sometimes just makes it hard to turn into a rental.  In the other hands, if you keep your upgrades to a minimum, it would be a good choice for future rental.  Expensive upgrades doesn't necessary fetch higher rental income.

This is really great advice.

On the flip side though you may get a higher price and sell faster assuming you did not upgrade with green walls and red polkadot backsplash.  Also do not discount the value of living and enjoying your upgrades until you sell or rent.  But yes if you have the means to move up to a better home without selling then is very good advice cause that may be your permanent home for the long run.

If you have the means/income to upgrade first home rent it out and buy your second home and you upgrade it as well...the lessons learned from the first home is invaluable. 

 

[Zippohunter]

I'm not against new home construction... I'm just not down with new home builder tactics.

And if the new home smell and the FCB bank accounts weren''t so powerful, the consumer could actually have some say in what type of products they get.

Dang... I feel like BK from the IHB days.

I feel the same way but these builders know two things.  They know they don't make much from the homebuilding cause TiC charges a shit load for the land.  They know the human psyche that pride in ownership coupled with "roll your upgrade costs into your low rate mortgage" equals big revenue and profits if you balance standard vs. options just right.


The upgrades is how every homebuilder makes their profits.  One part because that is the market they play in (the only way to get decent profits in Irvine) and the other part is that human psyche of pride of ownership and economics of rolling in big expenses into a 30 year loan.

The only way to effectively change the industry is to come up with a business model that allows for great standard features at an affordable price in Irvine while still taking home a decent profit.  Good luck.  Trying to change things up from a consumer demand perspective is futile.

 

[qwerty]

Bk had said the builders profit is capped at a certain %. While a certain % of a higher amount is better not sure that all the profit from upgrades goes to the builder.

 

[notTHEoc]

a

 

[eyephone]

Upgrade Scenarios:
1. Investor/FCB - if they plan to rent it out when escrow closes, no upgrade or minimum upgrade(s). Landscaping - they get concrete. Window treatments - regular blinds or nothing. (Let the renter put up curtains/blinds)

2. Regular person that plans to live there. Here are different scenarios:
A. Always busy (business traveling, don't have time to shop outside, works late) - will get the upgrades through the builder.
B. Smart - gets the minimum upgrades like electrical, bathroom, etc (other upgrades such as wood flooring, window treatments will get done outside)
C. Penny Pincher/Budget - ok with the builder standard (OEM), complain why upgrades cost so much (I work hard for my money) landscape - attempt to do it them self or hires the cheapest landscaper (you get what you pay for), window treatments - regular blinds or curtains

3. High Rollers/FCB/Ballers (that plans to live there) - combination of builder upgrades and outside contractors. Money is no object. House looks like the model home or even BETTER.