buying a single family home in Irving Texas

[Shamsideen Musa]

Hi,

My wife and I are looking to buy a house in Irving Texas relatively close to Dallas metro area. We have looked at many new developments and noticed that they are trying sell at $20-$30 more per square foot than well maintained older homes in the same area. What is a reasonable premium per square foot to start negotiations. We want to start at a 10% premium. We are flexible with our time frame so want to get the best opportunity possible. Is this a reasonable plan? What are the profit margins for newly constructed home.

[Hattie Dizmond]

yes, you're going to pay a premium for new construction. How much above is really dependent on the quality of construction and the level of finish out.  I don't know whether you have school aged children or not. However, because of the generally poor quality of the schools, I would not purchase in Irving. Also, there are fully rehabbed properties with all the bells and whistles in areas of great schools, which makes possible resale later much easier.

Also, there is a lot of new construction, spec built homes, in areas with great schools that are sitting on the market with falling prices, because they were overpriced with those new construction premiums. The bottom line is, new construction or not, prices have to be able to be supported by comps, and you have to ensure the same desirability factors are still there.