No more home work with a brand-new start
Buying a newly built home, like the two-story Craftsman that Ronnie and Teresa Sarmiento moved into earlier this month, never occurred to the couple when they started their home search a few years ago.
Motivated to purchase when their first child was born in 2000, the couple figured they could pay about $250,000. But they quickly became discouraged with the townhouses, tiny houses and fixer-uppers that populated their price range.
Those homes, Ronnie recalled, “were too expensive, too small and not worth our time.”
Plus, the couple had discovered they had no interest in fixing up a house after five years of renting a 1950s 900-square-foot home in Echo Park from Teresa’s mother. Grand plans to upgrade the bungalow never materialized, and the complications of new parenthood made repairing a house even more unlikely.
“It’s too overwhelming,” Ronnie, 34, said of home improvement. “I’d like to start with a clean slate, not start behind the eight ball.”
By the time news came that the couple’s second child would arrive late in 2001, they had approached a mortgage broker to calculate exactly what they could afford. They were surprised to discover the amount was much higher than they thought, up to $350,000.
“Are you sure?” asked Teresa, 31, a licensed optician. “Did you do the math right?” wondered Ronnie, an engineer.
With the increased budget, and offers from Teresa’s family to help with a down payment, the couple started considering new homes, particularly those within commuting distance of Ronnie’s job in El Segundo and Teresa’s job in Northridge.
Flipping through the newspaper, Teresa discovered a development in Huntington Beach that offered a few homes in the couple’s price range. Visiting the site, they found little more than surveyors’ stakes and an office trailer. There were already 20 people on the buyer list, but without model homes to look at, the couple hesitated to sign up. Not long afterward, they heard the list had grown to more than 300.
In August 2001, Teresa noticed an ad announcing that information would be “coming soon” about a Greystone Homes development in Arcadia, at the foot of the San Gabriel Mountains. By October, the ad gave more details, including the sizes of the houses being offered, from 1,830 to 2,398 square feet, and the location of the development. Even though construction had not started, the couple drove out to see the 15-acre site.
“I had to know what was there before,” said Teresa, who learned the site had been used as a drive-in theater from the 1950s until it closed in 1995.
Not wanting to miss out, the Sarmientos resolved to be at the head of the line when the first of eight phases of homes was to be offered for sale in November. At that time, the model homes would be ready to view.
But with the new baby due and a flurry of doctor appointments, the couple didn’t make it back to the sales office until two weeks after the opening. With 125 houses for sale, there were already 132 buyers on the list.
The models, representing the four floor plans offered, impressed the couple. They especially liked No. 3, which has 2,200 square feet, a two-story ceiling in the living room, four bedrooms, including one downstairs, three baths, a family room with media cove, a computer niche built into a hallway and an upstairs laundry room.
Teresa was taken with the opulence of the master bedroom, large walk-in closet and spacious master bathroom.
With a price tag of $310,000, the model was within the couple’s budget. However, the Sarmientos would learn, the price would rise with each phase release, according to what the market would bear, meaning the last buyers in the tract could end up paying $100,000 more than the first buyers for the same floor plan.
Despite the number of buyers ahead of them, sales consultant Steve Merryman told the couple that if they got on the list, they would likely get a home as others would drop off for various reasons. The eight phases would be offered at intervals of six weeks as crews built the houses.
According to Merryman, each developer decides how the waiting list is set up. Some choose a first-come, first-served system for each phase, which often results in buyers camping out to be first in line for the next phase. Others choose a lottery system, where random numbers are called for each phase.
Merryman prefers yet another system, in which numbers simply are called in the order that the buyers signed up, without requiring a sign-up for each phase.
To get on the list, buyers are asked to fill out a one-page application that gives the company permission to run a credit check, and buyers must supply a recent bank statement showing that the funds for the down payment are available and not contingent on the sale of another house.
To familiarize themselves with the process, the Sarmientos attended each phase release, viewing it as a fun outing with Aaron, now 2 1/2, and Madison, 9 months. The sales consultants offered the buyers refreshments on picnic tables.
With each phase release, the Sarmientos worried that prices would eventually rise above what they could afford. When their number came up during the fifth phase release, in March, there was only one Model No. 3 left, and it was priced $15,000 more than other No. 3s because it would be built on a corner lot across from a small park.
Hesitating only briefly at the price tag close to $380,000, the couple said, “We’ll take it.” Thirty minutes later, the paperwork was done.
By combining their savings and with help from family, the couple were able to offer $90,000 as a down payment. To simplify the process, they used the mortgage, escrow, title and insurance companies the builders recommended.
Two weeks later, the Sarmientos visited a design center in Yorba Linda to select cabinets, counters, carpets and other items. To accommodate their active children, they opted for upgraded carpet and thicker padding. Upgraded tile was selected for the entryway, kitchen and two bathrooms.
The Corian counters in the kitchen were sufficient, so an upgrade to granite was passed over. “Not a priority,” Ronnie said.
Once building began, the couple visited the site about every two weeks. In June, the foundation was poured, the house was framed and a stack of drywall sat in what would one day be the frontyard. The superintendent pointed out the earthquake reinforcement required in new homes, and the couple could see where all the wiring and plumbing were located.
“We wouldn’t see that with a used house,” Teresa said.
During July, the windows were hung, the exterior was lathed and ready for plaster, and concrete roof tiles were piled overhead. The house was plastered on the outside and drywalled on the inside.
In August, the exterior and exterior trim were completed, the interior doors hung, and walls and ceilings painted. The roof also went on, the driveway was poured and the frontyard started to take shape.
On an early September visit, the couple saw that the cherry-toned kitchen cabinets and the gray Corian had been installed, and the rock-faced fireplace in the adjacent family room was finished.
In the gated community, the Sarmientos now have access to a community swimming pool and barbecue area. Homeowner dues are $107 a month, which includes basic cable service.
The new location will add about 15 minutes to each of their commute times, and Ronnie has already found a carpool partner so he can travel the carpool lanes.
The downside of buying the newly built home is the small size of the lot (3,380 square feet), which eliminates the large backyard they wanted for their children.
“That was one of our sacrifices,” Ronnie said.
But overall the experience has been positive, Teresa said. “For us, it’s really exciting.”
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At a glance
Strategy: Buy a newly built house to reduce time spent on home maintenance
House: 4 bedrooms, 3 bathrooms, 2,200 square feet
Price with upgrades: $385,990
Interest rate: 6.375%
Loan: 30-year conforming
Homeowner dues: $107 a month
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Kathy Price-Robinson is a freelance real estate writer. She can be reached at www.kathyprice.com.
