Trending in 2013: Upgrades!

Smart upgrades for new homes

Kari Richardson | Chicago Tribune | December 20, 2012 | link

Lincolnshire Place on the Village GreenHelen Weiss, vice president of sales and marketing for Weiss Development, says communication between client and builder is key to ensure buyers get what they want, but no more. Ful story (David Trotman-Wilkins/ Chicago Tribune photo / October 30, 2008)

There was a time, not long ago, when buyers of new-construction homes took free rein with upgrades. Top-of-the-line stainless steel appliances for the kitchen? Yes! Three fireplaces? Sure. A brick pizza oven? Why not?

But those days are long gone. A too-free hand with upgrades can easily mean thousands — if not tens of thousands — of added cost, translating into a higher mortgage payment for decades. And today’s buyers are not ready to pay.

“Everyone is really very budget-conscious these days,” said Christy Whelan, director of sales for West Chicago-based custom homebuilder Airhart Construction. “They realize they might be living in their new home forever, but buyers are very selective and careful about upgrades.”

Whelan’s buyers typically prioritize a few must-haves, things she calls “bread and butter” upgrades, such as oak flooring on the first floor or sparkly granite countertops for the kitchen. They choose durable, long-lasting materials they will love for years — and that are likely to resonate with potential buyers if they have to sell.

“Details such as oak flooring add a warm feel to the home and are easy to take care of,” she said, making them a wise investment.

Roger Gerstad, president of McHenry-based Gerstad Builders, estimates buyers are selecting 30 to 40 percent fewer upgrades than they did a few years ago.

Still, the point of building new, for many, is the chance to design a home of their own creation. And upgrades are often the tool that allows for that customization.

“We want people to be able to add things that light their fire,” said Cheryl Bonk, vice president of sales and marketing for M/I Homes’ Chicago division. “We want them to have the things that make it worthwhile to write out that mortgage payment each month.”

That fact in mind, we surveyed Chicago-area builders to find out how buyers can get the most upgrade bang for their buck.

What’s included. Hoping to lure buyers, many builders include granite countertops, high-quality cabinetry and other sought-after items as standard in their building packages. It’s not always necessary to upgrade to have exactly what you want, Bonk said.

For example, energy-efficient appliances, windows and furnaces are already standard in M/I-built homes: “A lot of things people used to spend money on are now included,” she said.

Look at lifestyle. First-time home buyers often fantasize about soaking in a whirlpool tub or stretching out in front of the fireplace only to discover they have little time for these pursuits.

Condominium buyers at Lincolnshire Place in Lincolnshire and River’s Edge in Vernon Hills typically have already purchased a home or two, said Helen Weiss, vice president of sales and marketing for Weiss Development, which built the properties. “Our buyers are unfettering themselves for career purposes or for retirement,” she said. “By the time we see them, they are no longer guessing at their lifestyle.”

Consequently, they know how much time they have for soaks and whether or not they will ever get around to lighting a fire. Careful consideration of daily habits helps ensure buyers get the upgrades they want, while avoiding those they won’t use.

One of the most popular upgrades for Weiss’ buyers — and one that she said delivers maximum bang for minimum buck — is adding built-in furniture to the family room or dining areas. Weiss has helped buyers add custom buffets to the dining room or kitchen for around $2,500, roughly the same cost as a piece of furniture.

The difference, though, is that built-ins “fit like a glove,” she said. “They have every inch of storage you need for tablecloths and dishes. And you don’t have to worry about whether or not they look good with the cabinets and the trim.”

High style, low cost. To set a home apart from the crowd for a minimal investment, consider the smallest of design details. “Raising your kitchen cabinets to graduated heights is an inexpensive way to add some pop,” Whelan suggested. Similarly, a decorative cut on the edge of a kitchen or bathroom countertop, such as a bullnose or ogee edge, can add style for as little as a few hundred dollars.

Another popular, yet inexpensive design upgrade: tile work in the kitchen or bath.

Think about small touches that can make life easier in a big way, Weiss suggested. Additions such as hand-held showers and corner niches for shampoo and soaps in the bath provide convenience for a modest cost.

Aging in place. Today’s buyers are a forward-looking group, Whelan said. Many plan to grow old in their new homes or to open their doors to elderly parents. Luckily for them, age-in-place upgrades tend to be some of the most affordable, she said.

Equipping a new home with extra-wide doorways to accommodate wheelchairs or walkers costs well under $1,000, Whelan said. And installing handicapped-accessible showers won’t break the bank either, she added.

Buyers at Epcon Communities’ maintenance-free developments, which include Fox Run in Plainfield, favor options such as grab bars in baths, raised-height toilet seats and vanities and shower seats, said Ember Ferrantino, marketing coordinator for the builder.

Bundle it. Homebuilders often bundle popular upgrades together for a cost that is less than each item could be purchased separately. These packages can make financial sense for those who planned to purchase some of the items anyway.

M/I Homes offers a StyleSmart upgrade with crown molding and chair rails, cabinet moldings, a stainless steel refrigerator, blinds for select windows and a palette of special paint colors for well under $10,000, Bonk said. About 15 percent of buyers select the upgrade, she said.

Gerstad Builders’ popular “luxury home” package includes 42-inch kitchen cabinets with crown molding, 9-foot first-floor ceilings, oversized windows on the first floor, air conditioning, an insulated steel garage door and a luxury master bath package with dual sinks and a separate tub and shower. The package costs $9,000 to $18,000, depending on square footage and options selected.

Its communities include Dawson Creek in Poplar Grove, where prices for ranch and two-story homes range from $147,990 to $230,990.

Now or later? Ann Bell, one of the owners of Lemont-based Castletown Homes, offers this advice to buyers: If you are on a strict budget, put money into structural upgrades now, cosmetic ones later. While it will be difficult or costly to change a shower or staircase after a home is built, things like carpets, light fixtures and faucets can be easily swapped out.

Gerstad said buyers at his communities in Illinois and Wisconsin can add a 12-by-14-foot sunroom with oversized windows for around $17,000. A three-car garage adds about $15,000, he said. Although these items are not inexpensive, they can be a good value for the buyer who desires them, as adding the same features later is likely to cost much more, he said.

Like the sweater bought on sale but never worn, even the cheapest upgrade is no bargain if it’s not valued or used. Good communication between client and builder is key to make sure buyers get what they want — but no more, Weiss said.

“We don’t want to deliver more than the buyer wanted because it will mean additional cost. But we also don’t want to deliver less than they expected,” she said.

Author: kimhuntkw

We specialize in Real Estate in the Pleasanton, Dublin and Livermore areas of the East Bay in California

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