May 22, 2024

Building your dream home or buying a pre-sale new construction home in Bellingham or anywhere throughout Whatcom and Skagit County can be challenging. Land can be very difficult to develop and construction costs continue to rise. And even finding a new home for sale is difficult, as Whatcom County has a record low inventory for new construction. Particularly when adjusting for population growth.

On the latest episode of The Bellingham Real Estate Podcast, Justin Nelson and Paul Balzotti discuss the subject of buying a new construction verse building a custom home.

Download Your Guide to Buying New Construction Homes in Bellingham

Buying land and building a custom home. 

The difficult process of buying land in Bellingham and/or Whatcom County and developing the land and building a custom home. One recommendation if you run into hurdles when reviewing the lot with whatcom county is to hire a land use consultant. The reason being is that often they can help you with work arounds and show you ways to get things done that the county may not bring up to you in your research.

Another recommendation is to consider the improvements or lack of improvements of the property when you write the offer. One lot might be listed at $75,000, but need $200,000 to get it ready to built. While another lot may be priced at $200,000 and be ready to build today. On the surface the $75,000 looks like a better deal, but it may actually not only be more costly to develop, but take up 1-2 years of your time and energy to get it ready to build.

So there is a huge discovery period in looking at land. What has the seller already done or had tested? Is there wetlands? Has there been improvements in the general area surrounding the lot? All of these factors and many more can have massive effects on your ability to build and the costs to develop a lot.

Buying a pre-sale home. 

When the plan for developing and building a new home does not work out, the next option is buying a pre-sale from a builder who is already building a single home or a development. One of the insights discussed on the podcast is that many pre-sale homes are not listed on the MLS. In a low inventory environment with prices appreciating, builders will often keep homes unlisted until they are closer to completion. Builders hold pre-sales off market for a variety of reasons. They could be trying to sell it in-house (and save commissions). Builders also prefer to build a house with the specs they choose and not have to deal with custom changes in many cases. And in many situations, builders are holding off on a list price, hoping that in 6 months, the price will be higher when the home is closer to completion. This does not mean you can not find these opportunities and work with builders to get in on these pre-sale opportunities before they are listed. We keep a list of all active builders that are building and work with our clients often to help them find off market pre-sale opportunities.

The importance of buyer agency when buying a new home from a builder.

Often buyers feel comfortable working directly with a builder or builders listing agent, and that can be a huge mistake. Not only can a buyers broker often negotiate the commission into the transaction (the builder has often already planned for this expense in their price), but a good buyers broker can often help negotiate additional improvements like appliances, fencing, or an extended warranty. Along the way and especially as the home is getting completed, issues can arise as well. And having that advocacy and representation in your corner can be crucial to having any issues that arise handled.

Would you like a list of all new construction opportunities? Fill out this form here.

Or would you like to discuss buying land and building? Reach out to us here.