Prosper Tx Housing Demand Is so High that Builders Stop Writing Contracts
Many builders in north Texas are no longer writing contracts to build a new home from scratch. These contracts are commonly referred to as a 'build to suit' contract. Competition for a new home in many north Texas neighborhoods has reached a feeding frenzy.
Negotiating is a thing of the past...
In days past, our agents loved the art of the deal and negotiating for the best price on the home. Today if we tried that we would hear the sales associate yell 'NEXT!' and be kindly led out of the sales office.
Price reductions, incentive packages and deals are no longer occurring in the hottest communities. Don't lose heart, we are starting to see some communities in the outlying areas starting to offer deals and incentives.
Prices are no longer fixed...
Many builders are facing rising prices on goods and services due to scarcity. Covid devastated the supply of many common construction goods and the manufacturing facilities were shutdown for many months. This has resulted in builders having a real problem finding everything from toilets to OSB decking.
Blind auctions are becoming common...
Many builders have discovered the power of selling a home with multiple offers. It is a common thing in the world of residential resale homes, but not in new construction. Many agents fear that builders will become addicted to the higher sales prices and won't want to return to practices.
Shortages in materials and labor are common...
With plants opening back up many shortages should become a thing of the past. Only time will tell if we have cleared the supply side problems.
50% of builders are now using escalation clauses...
An escalation clause exists in a contract to protect the builder from uncontrolled rising costs of production. However, it passes the financial burden onto the consumer. Escalation clauses are a sign of out of control cost increases and we need to eliminate them from the new construction market ASAP.
Terms can now change even with a contract...
Many builders contracts state they are allowed to substitute goods of equal or greater quality. This has become open to interpretation on what constitutes equal value. One local builder substituted shredded cellulose insulation in leu of radient barrier decking. This is not an equal substitution, they perform very different purposes.
A lack of 'dirt' is the main problem...
Our local builders need more finished lots to supply the demand we now face. Unfortunately, it takes a great deal of time and labor to transform a pasture into a new home development. Until our local governments and developers streamline the process we will not get any relief.
One builder even cancelled 100+ contracts...
One of our local builders made a management decision to save some money when they discovered their sales team had made a very, very bad decision. So to save the company some money, they cancelled over 100+ contracts. They offered their clients a $500 gift card. (insert crickets chirping here)
What can you do?
So what can you do if you want to build a new home?
- You MUST get with your agent first and go through our new construction process
- You need to get pre-approved with a lender
- You and your agent will determine your preferred city, neighborhood and builder
- Your agent will then reach out to the sales associate and see what our options are to build.
We will goto work on your behalf and visit with them and see what we can do to expedite the process. Give us a call when you are ready to get started.
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