Buying Green Homes
& New Construction
Hosts: Sabrina Booth & Aaron Fairchild
Redfin Listings and Green Canopy Homes
May 15...
● What is a green home?
● Why buy green?
● Costs of green living?
● Green vs. “Green Washed”
● Pros & Cons Green Homes
● P...
About Redfin & Green Canopy
Redfin is a real estate brokerage on a mission to make buying
and selling a home better for yo...
Green Canopy’s mission is to inspire resource efficiency in residential
markets.
Green Homes
What is a Green Home?
● Green Homes are typically high-performance homes that
are built with resource conservation, longev...
Why Buy Green?
● Sustainable properties are the future of real estate industry
► Consumer demand
► Federal government ince...
The Costs of Green Living
There is a misunderstanding that simply because certain
homes are green they cost more, and that...
Environment and Health Effects
● Green homes are built with
healthy protocols to preserve
air quality, such as:
► Low or n...
Green vs. “Green Washed”
● Occasionally, builders and their real estate agents make the
claim that their home is a green h...
Trivia #1!
What percent of buyers
considered heating and
cooling costs “very important”
to their purchase?
New Construction
How to locate new construction
Local Builder Websites
Local Green Builders
Green Canopy Homes
Dwell Development
Hammer in Hand
LimeLite
National New Cons...
Pre-Sale or Under Construction
Pictures from the MLS
Pre Sale or Under Construction
Actually…
Pros & Cons
Green Remodels: Pros
● Better neighborhood fit
● Existing character and charm
● New systems
● Energy efficient
● Better ma...
Green Remodels: Cons
● Older floor plans
● A mix of old and new
interior
● Working within the
existing envelope
● Eclectic...
New Construction Pros
● You pick YOUR home
● Modern floor plans
● New systems
● Energy efficient
● Warranty
● Personal tou...
New Construction Cons
● Small lots
● HOA
● Not unique
● Landscaping not mature
● Cost per square foot
● If pre-sale, can t...
Break!
Trivia #2!
Name 1 pro for buying a
green home and 1 pro for
buying new construction.
Working with Builders
How far along is it?
• City permits
• Most options for
changes and
upgrades
• Longest timeline
“Presale”
Home
• Limited ch...
Presale: Picking Your Lot (new
construction)
● When in the pre-sale stage, you can choose your lot from
lots that have bee...
Basic Build Process 4.5-7 months
• Permitting Process (floor plan and lot permitted by the city)
• Foundation poured
• Fra...
Upgrades & Changes
List Price = “Standard” or “Spec”
● List price is for the builder’s “standard” specification of
finishes
● “Standard” spec...
Specifications List
Every builder should be able to provide:
● A list of what upgrades are present in the model
● A standa...
Negotiating
Front End vs. Back End
‘Front End’ means on the purchase price:
● An offer of $545,000 on a list price of $550,000
‘Back E...
What works best?
Builders prefer to negotiate on the back end. Why?
● Avoid setting a precedent of discounting for future ...
Negotiation Factors
● Market demand – How many homes has the builder sold
this month, last six months? What are the curren...
What can you get?
● Allowance – some builders allow a buyer to specify a
certain dollar amount in the offer that they can ...
FAQ
Common Questions
● Is this builder reputable?
● Can I tour new homes with a Redfin Agent? Yes!
● Can I still get the Redfi...
Trivia #3!
What percentage of Redfin
customers would recommend
Redfin to a friend?
(closest answer accepted!)
Questions?
Thank you for attending!
Check out our schedule of upcoming classes at
Redfin.com/events
Aaron Fairchild, CEO
Green Canopy...
Thanks for Attending!
Redfin Green Home and New Construction Class - Ballard, WA
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Redfin Green Home and New Construction Class - Ballard, WA

  1. 1. Buying Green Homes & New Construction Hosts: Sabrina Booth & Aaron Fairchild Redfin Listings and Green Canopy Homes May 15, 2014 – Ballard, WA @Redfin facebook.com/Redfin
  2. 2. ● What is a green home? ● Why buy green? ● Costs of green living? ● Green vs. “Green Washed” ● Pros & Cons Green Homes ● Pros & Cons of New Construction ● Break! ● Working with Builders ● Upgrades & Changes ● Negotiating ● Preferred Lenders ● FAQ ● Q&A Agenda
  3. 3. About Redfin & Green Canopy Redfin is a real estate brokerage on a mission to make buying and selling a home better for you. 97% of Redfin customers would recommend us to a friend! ● Accountability: we’re on your side, giving you honest advice ● Technology: sellers get more traffic; buyers tour homes first ● Value: a full-service brokerage that saves you thousands  No obligation
  4. 4. Green Canopy’s mission is to inspire resource efficiency in residential markets.
  5. 5. Green Homes
  6. 6. What is a Green Home? ● Green Homes are typically high-performance homes that are built with resource conservation, longevity and the end user’s health in mind. ● Green homes tread lightly on the planet. ● Typically, a green home will have ► Cleaner, healthier materials ► Better performance ► Less maintenance ► Less impact on the environment ► More locally-sourced materials and labor
  7. 7. Why Buy Green? ● Sustainable properties are the future of real estate industry ► Consumer demand ► Federal government incentives ► A 2013 report from the National Association of Realtors noted that 36% of buyers considered heating and cooling costs “very important” to their purchase ● Green homes have less toxic particulates floating around in the air, which means they are typically healthier homes. ● They use less energy to run, and sometimes produce their own electricity, which means they are more comfortable, less drafty and cost less to operate. ● Green homes are built to a standard that exceeds local permitting codes, which means they go above and beyond.
  8. 8. The Costs of Green Living There is a misunderstanding that simply because certain homes are green they cost more, and that is generally not true. ● Green homes are more efficient they cost less to operate than a normal home of the same size. ● As a result, green homes can end up costing less over the time a homebuyer lives in the home. ● Even though green homes are better quality homes they are generally priced the same as their non-green competitors. ● The savvy real estate agent can help buyers navigate this challenge by getting to green homes ahead of the market
  9. 9. Environment and Health Effects ● Green homes are built with healthy protocols to preserve air quality, such as: ► Low or no emission materials (insulation, paints, sealants) ► Diversion of roof top and surface water way from the home to prevent mold and mildew growth inside ► Installing durable products that can be cleaned with low-toxic cleaners ► Planting native and drought tolerant plants to reduce use of toxic chemicals
  10. 10. Green vs. “Green Washed” ● Occasionally, builders and their real estate agents make the claim that their home is a green home when it really isn't. ● Be sure to verify if a green home is CERTIFIED or not. ● Certified green homes must adhere to a rigorous certification checklist that ensures these homes achieve a standard that exceeds local building codes and incorporates green methods and materials throughout the construction process. ● Certified green homes take a whole-house approach to building a home that is healthier verses the builder that just installs Energy Star appliances and calls the home "green".
  11. 11. Trivia #1! What percent of buyers considered heating and cooling costs “very important” to their purchase?
  12. 12. New Construction
  13. 13. How to locate new construction
  14. 14. Local Builder Websites Local Green Builders Green Canopy Homes Dwell Development Hammer in Hand LimeLite National New Constrution Builders ● Centex Homes centexhomes.com ● DR Horton drhorton.com ● Toll Bros/CamWest tollbrothers.com
  15. 15. Pre-Sale or Under Construction Pictures from the MLS
  16. 16. Pre Sale or Under Construction Actually…
  17. 17. Pros & Cons
  18. 18. Green Remodels: Pros ● Better neighborhood fit ● Existing character and charm ● New systems ● Energy efficient ● Better materials ● Feels like new construction ● Better than buying your own fixer
  19. 19. Green Remodels: Cons ● Older floor plans ● A mix of old and new interior ● Working within the existing envelope ● Eclectic style ● Not all existing homes come with a warranty
  20. 20. New Construction Pros ● You pick YOUR home ● Modern floor plans ● New systems ● Energy efficient ● Warranty ● Personal touches
  21. 21. New Construction Cons ● Small lots ● HOA ● Not unique ● Landscaping not mature ● Cost per square foot ● If pre-sale, can take a long time ● Builder may change plans or the price
  22. 22. Break!
  23. 23. Trivia #2! Name 1 pro for buying a green home and 1 pro for buying new construction.
  24. 24. Working with Builders
  25. 25. How far along is it? • City permits • Most options for changes and upgrades • Longest timeline “Presale” Home • Limited changes • Pick colors possibly • Timeline varies Under Construction • No changes • Upgrades limited • Close quickly, like a resale home Completed “Spec” Home
  26. 26. Presale: Picking Your Lot (new construction) ● When in the pre-sale stage, you can choose your lot from lots that have been ‘released’ at the time. ● Builders release lots in phases in a development and start the permitting process only on selected lots. ● Some floor plans will only fit on certain lots.
  27. 27. Basic Build Process 4.5-7 months • Permitting Process (floor plan and lot permitted by the city) • Foundation poured • Framing/Roof/Windows Stage (inspected by the city) (order for cabinets/plumbing fixtures/furnace/H2O tank, trim, doors) • Exterior Siding/Painting Stage • Electrical/Plumbing/Heating/Insulation Stage (re-inspected by the city) (order for flooring/appliances/fixtures) • Drywall/Interior Painting/Doors/Millwork Stage • Cabinets/Plumbing Fixtures/Other Fixtures Stage • Flooring/Appliance/Landscaping Stage • Clean-up • COO (Final ‘Certificate of Occupancy’ Certificate from the city) • Private Inspection and Builder ‘Blue Tape’ Walk-through with Buyer
  28. 28. Upgrades & Changes
  29. 29. List Price = “Standard” or “Spec” ● List price is for the builder’s “standard” specification of finishes ● “Standard” specs will vary from one builder to another ● Upgrades/options will add onto the price of the home ● Upgrade prices are the difference between the price of the “standard” and the actual cost of the upgrade ● Other options, such as air conditioning, or adding features are straight prices the builder charges ● You can easily spend 15-20K on upgrades/options, adding to the cost of the home If there is a model home, it will probably have a number of upgrades installed.
  30. 30. Specifications List Every builder should be able to provide: ● A list of what upgrades are present in the model ● A standard list of specifications or ‘specs’ for each home ● If the lot you are considering has any upgrades pre- selected and included in the price They may or may not have: ● A list of common upgrades ● A price list or master list of options/upgrades ● A cost associated with quoting custom finishes ● Limits on changes that they are willing to make
  31. 31. Negotiating
  32. 32. Front End vs. Back End ‘Front End’ means on the purchase price: ● An offer of $545,000 on a list price of $550,000 ‘Back End’ means on concessions or upgrades: ● An offer of $550,000 on a list price of $550,000 ● Asking for the builder to include certain upgrades or credit a certain amount towards upgrades or closing costs.
  33. 33. What works best? Builders prefer to negotiate on the back end. Why? ● Avoid setting a precedent of discounting for future sales ● Avoid upsetting prior purchasers who paid full price – these are their customers and future referrals for their company ● May be able to control material and labor costs The best approach varies case by case. Builders often have certain styles. An experienced agent can lay out your options and make a recommendation
  34. 34. Negotiation Factors ● Market demand – How many homes has the builder sold this month, last six months? What are the current market conditions? ● Phase of construction – May be willing to negotiate more if an completed home has been sitting ● Health/size of builder – Do they need to sell it? Some small builders don’t have the flux of $ that larger builders have and are more willing to negotiate to sell a home ● Willingness to use a “preferred lender” ● Number of requested upgrades
  35. 35. What can you get? ● Allowance – some builders allow a buyer to specify a certain dollar amount in the offer that they can later specify how it will be spent. This amount will go up and down with the market. Most builders are giving very little away now. ● Redfin credit – typically the rebate from Redfin must go towards your closing costs – it’s good to keep that in mind during negotiations with the builder.
  36. 36. FAQ
  37. 37. Common Questions ● Is this builder reputable? ● Can I tour new homes with a Redfin Agent? Yes! ● Can I still get the Redfin Refund if the home is not listed on the MLS yet? Yes! ● Can I change anything in the builder contract? ● When do I have to tell them I am working with an agent? ● The agent in the builder’s model told me they are a buyer’s agent. Are they working in my interest? ● Can I get a better deal by going with the builder’s buyer’s agent?
  38. 38. Trivia #3! What percentage of Redfin customers would recommend Redfin to a friend? (closest answer accepted!)
  39. 39. Questions?
  40. 40. Thank you for attending! Check out our schedule of upcoming classes at Redfin.com/events Aaron Fairchild, CEO Green Canopy Homes aaron@greencanop.com Sabrina Booth Redfin Listings Agent sabrina.booth@redfin.com
  41. 41. Thanks for Attending!

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