Spent 34k of finish on the same shell with no proof the market pays

The buydown option isn't the same animal as the other three and I'd want the paperwork before I voted for it. A seller paid buydown is a concession, so it lands in the contract and in the lender's allowable seller contribution limits, and those limits move with loan type and down payment. Some structures are permanent rate reductions priced by the lender, some are temporary and step up in year two or three. Get the actual cost sheet in writing from the lender your buyer is using before you budget a number for it, because what you think you're buying and what the note says are often different. Also worth asking your appraiser contact how a concession shows up in the comp record in your state, since a few states don't publish sale prices at all and the concession may never be visible to the next appraisal.

I did close to this experiment by accident across two houses in a 1,600 foot plan, same subdivision, four months apart. Loaded one at about 28k over base, listed 8 over the resales, took 52 days and sold 3 under list. Base one listed 4 under the resales, 19 days, full price. Net dollars in my pocket were within 5k of each other, and the base house gave me the money back four weeks sooner.

What that told me is the finish package bought days on market, not price. If your carry is 2,900 flint, 33 fewer days is about 3,200. So the 34k has to earn more than the resale gap plus that, and mine didn't.

Dumb question, what does base actually mean here? Is that a spec sheet the builder gives you or something you write yourself?

@ember it's whatever the builder's standard schedule is, the version with no upgrades, and yes it's a written spec sheet per line item.

flint, the thing I'd want to know before voting is who your buyer is. If they're a first time buyer stretching for the payment, option B. If they're a move up buyer who already sold something and has cash, they'll pay for quartz and they'll walk from laminate. Your last house sold at 409, which sounds like the second buyer, not the first.

Can I ask about the carry number. Is the 2,900 on the full loan amount from day one or does it climb as you draw? Because if it's an average and the early months are half that, the days on market math @keystone ran gets less friendly to the base house.

The finishes that hold up over five years and the finishes that sell a house in April aren't the same list, at least in my experience renting these out. Painted cabinets with soft close look great and chip. LVP is the one upgrade I'd defend on both counts because it survives everything.

But you're selling, flint, so hold up doesn't get you paid. If I were splitting the 34k I'd put it in the kitchen counters and the flooring and let the primary shower stay a fiberglass unit. Nobody has ever refused a house over that.

Are the 372 to 388 resales actually competing with you? Twenty year old tract houses at 380 versus a brand new one at 412 is a 32k gap for a roof and mechanicals nobody has to touch for fifteen years. In the lists I've been building the new construction premium in that price band has been running 6 to 10 percent, which puts you at 400 to 412 before you add a single upgrade.

34k at 6.25 over thirty years is roughly 209 a month before taxes and insurance move. That's a real number to a buyer qualifying at 380. It is not a real number to a buyer qualifying at 500.

Which is @kestrel's point restated with arithmetic. flint, at 412 what income does your buyer need, and does that income exist in the tract?

Your 34k is trade cost, so it isn't 34k of value delivered, it's 34k of cost against whatever the appraiser gives you for the same items in a comp. Quartz over laminate on 40 feet of counter appraises for a few thousand at best in most rural and suburban forms I've seen filled out.

The other half of this that nobody has said, tile setters. Adding a tiled primary shower means scheduling a trade that in my area shows up when it shows up. Two weeks of float on a 2,900 carry is 1,450 and the finish package usually costs you more than two weeks. Base packages ship in boxes and go in with the guys already on site.

@girder that's the part I'd weight heaviest. Every unit I've turned taught me the same lesson, the specialty trade is the schedule risk, and schedule risk on a construction loan is priced in interest.

flint, do you have a tile crew that answers the phone or are you hoping?

The neighborhood has a ceiling and it doesn't care what you spent. If nothing in that tract has ever closed above 415, your loaded house at 412 is bumping the roof and your appraisal problem is structural. I'd want to see the highest four closings in the last eighteen months and how far they were above the median before I voted for the loaded package at all.

Also, and this is only my habit, I'd check whether the tract has any lots left. If the only new construction supply is you, the premium holds. If a regional builder has 40 lots two streets over with a base price of 384 and their own buydown program, you lose that fight on the finish package and you lose it worse on price.

Living this right now with a 2,050 plan I loaded because the last one sold fast. 61 days, two price cuts, and yesterday I agreed to pay 9k of the buyer's closing costs anyway. So I paid for the quartz and then paid the concession on top.

If I'd built it base I'd have had the 26k and probably the same closing date. Voting for B and I'm annoyed about it.

@warrant when the seller pays for the buydown, does that money actually go to the lender or does it sit somewhere? I've been reading about notes and I can't work out whether the buyer's rate is really lower or whether it's an escrow that pays part of the payment for a couple of years.

@vellum both structures exist, which is why warrant said get the cost sheet.

flint, would you post the 34k broken out? I'm trying to figure out what a first build actually costs line by line and I've never seen an upgrade schedule with real numbers on it. My guess is the cabinets are half of it and the lighting is 2k of it, and if the cabinets are half then the split option is really just a cabinet decision.