One Way to Sort Out the New Home Builders

The Jackson by Capstone Homes. COURTESY CAPSTONE HOMES
December 1, 2011

Low prices, LOTS of competition, low interest rates... it's a great time to buy real estate at the Delaware beaches.

If you're looking to purchase a new home, then you have many options between the builders at the Delaware beaches.  Many builders have lot and home packages in beach communities, and most builders will also build a new home on your property.

So how do you sort out all the marketing hype from the truth about new homes?  Finding a Delaware new home can be difficult if you are trying to sort out the differences between the different builders.

Some builders claim to be "green", others build "trust" or "happiness".

Seriously, as a builder of Delaware new homes, I'm not going to start talking about my competition in great depth.  Let's just say it pays to get educated, for some things that builders talk about make a huge difference in new homes.  It's also important to remember that some of the things builders talk about don't really matter at all.

There is one thing that all builder's share when it comes to the cost and features of their new homes:

Transaction Costs.

Forget standard features or the cost of a basement or how much energy you're going to save.  Think about settlement costs.

For people who are coming to Delaware from another state will be surprised that Delaware has relatively high transaction costs in Real Estate.  This includes a 3% transfer tax for all real estate.  On a $300,000 home, that's $9,000.  That's a large number to see on the settlement sheet if you didn't know it was coming.

In most real estate transactions for Delaware beach homes, it is typical for the buyer and seller to split this transfer tax.  This is also typical with most locally based builders of Delaware new homes, but not all builders split the transfer tax.

If you're looking at a Delaware new home that's being sold as a lot/home package, ask the sales representative about transfer tax.  If the builder doesn't pay the seller portion of the transfer tax, then be sure to factor the cost into the price of your home.

For example:

If a builder is offering a house for $229,900 but does not split the tax, then the true price of that home is $233,348.50.  That's what the house will cost if the builder is going to make the buyer pay all of the transfer tax.

When you sort through all the different features- don't forget the total cost of the home- and transfer tax is something that is going to be paid no matter what real estate was bought.

At Capstone Homes, we split the transfer tax in all of our new home communities.