New homes is a term which implies all improvements carried out on land comprising erecting anything that is permanent in nature, for instance buildings, trees, fences among others. Development of land is done by real estate developers after purchasing land and thereafter building residential houses, industrial complexes, commercial and shopping structures, and others. The process of developing land involves collaboration with architecturers who design the proposed development and eventually after construction real estate brokers or developer's company puts the building for sale. The process of development also necessitates following regulations set up by the real estate body to govern all transactions pertaining to residential and commercial structures (Jefferson, 2007).
The process involved when buying or selling a property is guided by a number of laws and regulations which are enforced by Real estate professionals. Real estate professionals are experts or organizations that understand laws and regulations governing the process of buying land and structures on it and the procedures undertaken when selling. These laws address a number of issues as discussed below:
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The process of purchasing a home necessitates that before buying there is need to first discuss with your lawyer who will give necessary recommendations before signing a binder. The binder should clearly stipulate the terms of sale, significance of the binder, the duties of the broker, mortgage contingencies, titles and other rights pertaining to property ownership.
The process of selling and buying a building follows clearly set guidelines which involve acquiring significant facts about the property. During the selling it is paramount that the lawyer clearly explains your rights and obligations which should be found in the real estate sale agreement so that you are able to understand what takes place during settlement and also how the process is carried out. For the buyer the law requires that before paying the money he or she should also go and inspect the home first and ascertain its condition (Decker, 1973).
Another legal step in the processing of buying and selling new homes is licensing. Although licensing process varies form one country to another the law aims at ensuring that buyers are fully protected when and after buying a real property and at the same time the law should permit them sale the property when they want to do so. The real estate agents acts as a mediator between the buyer and the seller to ensure that the process of transferring the property from the seller to the buyer is done after completing of all necessary assessments and satisfying that the property belongs to the consumer. The formation of national association of realtors in every country has ensured that members adheres to the set rules and code of ethics as well as standards of practice, it also offers members with appropriate education courses in order to enhance better delivery of services (Decker, 1973).
Changes in new homes for the past 20-30 years
It is indicated that the market for new homes has been stable for the many years in the past. However, recently the trends indicate stability and deteriorations in some cities. For instance, there are notable signs of stabilization in northern New Jersey and upstate New York where office vacancy rates have increased and fall in Manhattan, Buffalo, Albany areas where vacancy rates are reported to be low. In earlier years families could save up to 30 percent down payment to buy a home whereas today home loans can be obtained at as low as 5 percent down payment (Harley, 2002).
The effect of economic recession in various economies of the world has greatly hit the market for new homes. Thus, the economic slowdown and fall in demand has hit developers, hence real fall in prices of new homes. In India for instance, the prices of real estates have dropped by 10 to 40 percent across the entire country. However, developers have not reduced the prices of existing projects thus not adhering to market demands which require project leaders to rationalize prices. In India, there is currently no retail company that is willing to purchase high priced spaces yet it is indicated that one year back the retail sector had brought higher hopes in the economy of India (Mahendra, 2009).
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For the past four years, new home market has witnessed change because many of the buyers of large buildings have resorted to borrowing loans to enable them purchase the building. However, the response has not been all that pleasing because many believe that this is quite risky because these loans drive payments for mortgages to increase. Report from banks in many parts of the world shows that there is a fall in demand for loans from housing sector and this is attributed to continuous tightening of credit standards. In America for instance, economic recession did not only hit the real estate market but almost all sectors of the economy. In India, the situation is still the same. However, the state bank of India, ICICI bank, bank of Baroda, among others have surprised many by offering special housing loans at an interest rate of 8%. This increased the number of applicants that want to set up new homes although it is also said that the response in some main towns is not high. All these policies strategize at encouraging people to largely engage in developing new homes. For the past four years, new home market has witnessed change because many of the buyers of large buildings have resorted to borrowing loans to enable them purchase the building which is believed to be quite risky because these loans drives payments for mortgages to increase (Mahendra, 2009).
Despite the current economic situation that has seen many companies dealing in real estate turned upside down for the last few years' values at Wellesley real estate market have remained stable for the past 20 years thus fairing on well in relation to their counterparts. The existing market in Wellesley real estate market is one of the most secure for speculation of new homes in the commonwealth markets. Some of the reasons behind its success are its proximity to city, availability of school and shopping services and the type of existing commute that is roads, rail have led to quality life. It is indicated that in the past six months, Wellesley real estate managed to sell 166 homes which were approximated to be in the range of $ 2 m to $5.96 m. It is said that buyers have just developed a positive attitude toward Wellesley real estate (Fleming, 2009).
Consumer's preference in new home market
The buyers market is currently challenging bearing in mind that there are more homes in the market for sale and also the world economy has not attained stability. Most real estate brokers and agents who are operating in very challenging market have put customer's preference at the forefront. Many companies are heavily engaged in home selling because of the low interest rates. Therefore, the available market is characterized by limited number of buyers and high volume of sellers. This has led to offering competitive prices as well as doing other extra things to make the house have super appeal (Dawson, 2002). The buyer's preferences rotate around the following things:
The buyer's of new homes expects appropriate pricing of houses. To them, houses whose prices are set appropriately are very competitive thus likely to be purchased in relation to houses where price are extremely high. The buyer target is to buy the house at a fair price and this makes him believe that his or her money was invested in a more suitable venture. The trends are so currently because of instabilities in many economies of the world where any money spent should be accounted for. This is different with what existed some years back where new homes were selling like hot cakes and buyers were willing to grab homes at a price determined by the home companies (Dawson, 2002).
Likewise, buyers expect offers like incentives. Incentives greatly motivate the buyers who want to commit their cash into down payment. It is therefore important for the sellers to keep on replacing old and outdated materials and facilities in their houses. For instance, they can replace outdated houses, and upgrade appliances in order to make the home quite attractive. Customer's preference may therefore be met if sellers are ready to offer incentives to buyers because most buyers are greatly pleased with availability of these services.
Similarly, cash strapped buyer's expects offer to pay non recurring closing costs. Offering services like loan appraisal, credit reports among others are good motivation to buyers. The market for new homes still have challenges which should be looked into very well by the companies involved in development of houses with an intension of selling. It should be known by real estate developers that the demand for new homes has substantially dropped thus they should allow buyers to pay according to there capability as this will them getting many customers (Dawson, 2002).
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Another preference by buyers in the new homes is allowing them carry out full inspection of the homes by professional home inspectors so as to ascertain the actual value of the house. Well and clearly done inspection triggers the buyer to prefer purchasing a new home. However, if the customer inspects the house and find major damages, he or she may be demotivated because the implication will be that he or she should wait for repairs to be done before taking over the house. Such incidence makes the buyer to look for other houses especially if there are similar houses on the market. The buyer's motive is to get the house when it is in good conditions so as to enable him or her move to the house in the shortest time possible (Mahendra, 2009).
The buyer also expects homes that are more appealing to them. The first impression created in the minds of the buyer makes him or her decide of either buying the house or not. The areas that the buyers are more interested in are better trimming of the leaves and clearing of shrubs and bushes around the home, the conditions of the wall and more so trying to make the colors appear neutral and light, and finally the cleanliness of the house. The customer expects that a house which has been put on market is free from bad smell, there are no things like toys and other pet thrown in the compound and well designed flowers are set up in the compound (Dawson, 2002).
It is therefore important to indicate that the current market trends for new homes is challenging unlike how it was in the past 20 years. The challenge has arisen due to economic recession that has hit world economies. This among other withstanding arguments has made buyer's to put into consideration various factors when they want to purchase any structure. It has therefore become challenging to new home company to easily find market for their structure. What is more important to be done is to wisely look into many customer preferences and address them fully in order to compete favorably for demand and to ensure sustainability of there business (Mahendra, 2009).
What builders of new homes are providing to home buyers
Based on the difficulties in the housing market, most of the home builders have resorted to improving the quality of the houses so as to guarantee there customers satisfaction. Clark (2009) states that providing quality and affordable homes for sale at various price categories with popular amenities like pools and walking trails at very strategic locations is what buyers puts into considerations when making decisions of buying new homes.
Researches conducted shows that there is growing commitment by home builders to provide new houses at an extraordinary customer demands. However, the research also indicates that it is difficult to exactly understand the quality of the new home that will fully meet the customer's expectations. What matters a lot is to ensure that new homes are of high quality and also home builder's agents should aim at providing high level services to the customers (Clemente, 2010).
Clemente (2010) points out that builders of new homes can be categorized according to the size of the builders which comprise high volume builders, large builders, and finally medium home builders. However, the size and status of the home builders has nothing to do with customer's preference because what matters in all the categories is commitment of the builders to ensure that extraordinary service such as having better customer experience and upholding quality standards when putting up a structure are the key issues to be met.
Clemente (2010) singled out that San Clemente has endeavored to always provide the best new homes in Britain and that is why it has always been ranked as the best home builder company. Scooping the present of best builder earns the company both national and international reputation and these enhances easy access to customers which guarantees the company sustainability in the market. The reasons behind the success of san clemente- CA- based Eliant are providing specialized research and survey services to buyers through telephone conversations, mailing services, e-mail, focus group discussions, new home shopper research, consultation services and above all providing various sophisticated customer services as well as effective management strategies.
Similarly, offering attractive incentives on homes being constructed is yet another great expectation of buyers. In northern Virginia, Maryland and Washington DC fairly priced houses by professional valuers are selling with ease. This place attracts customers because they are strategically located in prime areas which have services like exciting transport system. Many buyers prefer to own a new home or a house in such areas because the believe that the value of there buildings will often appreciate after a short while and sale them at very high prices.
Likewise buying a new home in Virginia and Maryland enables the buyer to save thousand of money and above all get special offers. They provide buyers houses on loan terms thereby paying for an agreed period of time, customers are also able to get well informed, planned and above all cost effective knowledge in building. It is therefore pertinent to note that many home builders are trying to build structures and houses that meet the needs of the customer by ensuring that they put up quality houses which are well designed at affordable prices (Clemente, 2010).