Production
Builders,
Semicustom Builders & Custom
Builders
When you are looking at purchasing new construction home there are many factors that need to be given consideration. The common decisions like price, area and design all need first consideration, but the next questions become, how quickly would you like to be in your new home, and what type of builder would you like to work with?
Essentially there are four types of home builders but in this article we will be discussing three of the four that home buyers have to choose from; production builders, semi-custom builders and custom builders. Often time’s the desired final purchase price is the deciding factor as to which of these building contractors the buyers end up working with. But having a basic understanding of the differences between them may end up making the decision process simpler.
Production builders, or as they are sometimes called, tract builders usually start out at the entry level price points in residential new construction. In our area over the past few years the price range in homes built
and offered on the market by production builders has begun covering a broader price range than it has ever before. With production builders, buyers are at times limited to particular subdivisions, floor plans and designs within these developments. Production builders often translate to fewer choices and decisions for the buyers, but there are still plenty of selections that can, and need to be made. But even these choices may be limited to a smaller group of selections.
One of the more common questions buyers ask when considering production built homes concerns the quality and workmanship that goes into the construction of the home. To that question I always remind buyers that production builders adhere to the same minimum code requirements as semi-custom or custom builders. Production builders at times may use a more economical type or quality of materials, equipment, and appliances, in their homes to keep their starting price points affordable. But some products and features offered may also well exceed minimum code requirements. Often time’s production builders offer either a selection studio on site at a model home, or off site at a separate location. The builder utilizes the selection studios to provide buyers a one-stop location to make their available selections. Buyers select items like interior and exterior colors, interior and exterior doors, cabinets, countertops, floor coverings etc. Production or tract builders very much have their place in our real estate market just like the semi-custom, or custom builders. Production builders offer a product to the market that allows many buyers another option other than a resale home that’s best suited to their price range.
Semi-custom builders often offer a wider variety of designs, floor plans, construction packages and features than production builders. Some semi-custom builders may even market or call themselves “custom builders” because they allow more custom changes than their production builder counterparts. Even so with semi-custom builders the buyers are at times limited to particular design packages, floor plan styles and selections. When it comes to semi-custom built homes the quality and workmanship can often times be very comparable to custom built homes. But in certain areas of the homes construction the builder may also be offering a more economical line of products or finishes. For instance the building contractor may offer mid-grade vinyl windows rather a wood clad window, or drywall cased interior windows and doorways as opposed to interior trim finish windows and
doorways, or factory built cabinets and bases rather than custom built. There are many areas in the homes construction where the builder may offer a more affordable alternative in order to keep the homes price point at a more moderate range. At times these alternatives can be so subtle they can go nearly unnoticed by buyers unless pointed out by someone more experienced. Some area builders also offer a production built line of homes along with a semi-custom built line of homes. There are also custom builders that offer a semi-custom built line of homes along with a full custom line. At times these building contractors market and offer these different lines under separate brand names. This allows them the ability to work with a wider range of home buyers, and maintain their relationships with former clients who may be upgrading their homes from one line to the next in the coming years. Some semi-custom builders also offer selection studios for their buyers, others employ a consultant or representative to assist the buyers with their selections, while yet others simply provide the buyers with names and locations of local businesses that the builder works with in order for the buyers to stop in and make their selections. Regardless how the selections are to be made it is always extremely important that the buyers make their selections in a timely manner as to not delay the process. Construction delays caused by the buyers can ultimately lead to charges often calculated per day.
Custom home builders at times feature home designs, or styles that they’ve built in the past on their websites or in their marketing materials, or possibly even as model or showcase home, but with custom builders a buyers abilities to make the changes and selections in their new home is only limited by code restrictions, zoning ordinances, construction guidelines associated with a subdivision and the dollar amount that the buyers want to spend. If you are buyers that have their own design ideas that you want to incorporate in to your new home, than a custom home builder will likely be the way you will
want to go. If you are looking at a completely unusual concept in a new home design then you may also be working with an architect and/or drafts person in the initial planning stages. Often time’s custom builders have architects they have experience working with or drafts people and designers as subcontractors or as part of their staff that assist with custom designs. The old joke is bring a custom builder one line floor plan on the back of a bar napkin and they’ll turn it in to a reality. On total custom designs buyers need to also prepare for larger possible builder and plan deposits. Custom builders will also often employ or subcontract the services of an interior designer or design consultant to work directly with the buyers throughout their design and selection process. Depending upon the overall scope and design of the home the custom home building process can also take much longer than say a semi-custom home building process. It may require several meetings with the buyers, building contractor, architect and interior designer to iron out all of the details.
The fourth builder type we won’t be discussing at any detail in this article is factory built homes or as they are sometimes called modular homes or panelized homes. Subdivision covenants and construction guidelines, local building codes and community and/or zoning ordinances at times restrict the use of these types of homes. If you are a buyer considering purchasing one of these homes, make certain there are no restrictions in your area to keep you from doing so.
Greater Omaha Metro Area
T h i s A r t i c l e S p o n s o r e d b y First Mortgage Company
There are several newer residential lake developments in the greater Omaha area that are either ready to be built in or nearing ready to be built in very soon.
North Shores by BHI Development
There are several newer r e s i d e n t i a l l a k e developments in the greater Omaha area that are either ready to be built in or nearing ready to be built in very soon.
North Shores is a newer development in the Papillion Werner Park area developed by BHI and there are homes already being built in Phase I of the subdivision. North Shores is located North of Highway 370 and NW of Werner Park. Although the development is not located directly on the new NRD Prairie Queen Lake Recreation Area it is near enough to the lake and recreation area to enjoy many the new lakes hiking, biking and
walking trails. There are several builders currently building in the new development two of which are Nebraska Realty represented builders; Ken Murray 402.690.6572 representing Woodland Homes & Pinecrest Homes and Tim Sabaliauskas 402.708.4881 & Jodi Jackson 402.612.6658 representing MJ Design Build. Homes that are currently being built, or that are built are priced between the $280,000 to $500,000+ range. To view a plat of the area click on the link here, North Shores
Lake Allure by Thomas Dredging
Lake Allure is a newer lake development located North of Ashland just a short distance east of Highway 66. The Ashland lake development boasts a 200-plus acre recreational lake with over 187 residential lots. Neighborhood amenities include blacktop roads, gated access and community water and sewer. Lake Allure is also ideal for fishing and jet skiing. This lake development was developed by Thomas Dredging. To see information on available lots click on the link here, Lake Allure
Blue Water by Lanoha Development
Blue Water is located at 288th St. and Meigs Road west of Valley, NE. The new development boasts over 250 acres of water, over 7-miles of sand beaches and average lake depths exceeding 40-feet. All just a short 12-minute drive from West Omaha’s Village Pointe. The developer has indicated that Blue Water will be nearly a 500-acre development with city water and sewer, paved streets and lake lots starting at $175,000. To see more information on Blue Water, as well the sales plat, covenants, builder envelope and project overview simply click on the link here, Blue Water
To be Named Development by Boyer Young
Boyer Young has announced they will be introducing a new lake development in the Bennington area near 168th and Ida. As a
matter of fact you can participate in the naming the new lake development. The developer is asking for name suggestions for the new lake development on their website. The BY development boasts a 600 acre development with a 225 acre lake, public access to boat ramps, walking/hiking trails and homes priced between $225,000 to $500,000. There is no, sales plat yet available on the new lake development but there is preliminary master plan map available. Simply click the link here, Unnamed BY Development
For any new construction questions that you might have contact Nebraska Realty Builder Services, Jim O’Neal at 402.491.0100 Extension #5308. Or email Jim at [email protected]
The Home Building Process
Below is a typical process of building a home. The numbered processes may not be followed exactly the same by each home builder as different building contractors have different time table and flow chart methods for completing a home. The list is intended to give a general overview of the home building process.
(1) Builder applies for building permits in the jurisdiction where the home will be built;
(2) Lot is surveyed and staked for the house;
(3) Basement and/or footings for the house are dug;
(4) Soil pretreatment for termite prevention; (5) Concrete poured for basement walls;
(6) Foundation backfill and rough grading;
(7) Framing of the house including windows and exterior doors; (8) Home is roofed (Leak barrier and Ice-guard, vents & shingles);
(9) Siding eaves and fascia installed;
(10) Rain gutters and downspouts installed on the house; (11) Caulking and sealing exterior;
(12) Plumber begins the plumbing rough-ins;
(13) Electrician installs homes electrical service; (14) Concrete poured for basement and
garage floor;
(15) Concrete sidewalks and garage driveway poured;
(16) Exterior painting of house;
(17) HVAC duct work installed in home; (18) Interior electrical rough-in begins;
(19) Exterior front stone or masonry installed on home;
(20) Jurisdictional inspections for electrical, plumbing and HVAC rough-ins;
(21) Caulking sealing gaps and openings on the interior of exterior walls, and insulation installed;
(22) Blower door tests for HERR rating (if applicable); (23) Gypsum board (drywall) installed;
(24) Drywall taped, mudded, sanded and final finish; (25) Install and hang interior doors;
(26) Fireplace stone or masonry veneer installed; (27) Interior trim carpentry work;
(28) Insulation blown in attic; (29) Interior rooms painted;
(30) Kitchen, bath, and if applicable laundry & mudroom cabinets installed; (31) Countertops, ceramic tile and other surfaces installed;
(32) Plumbing, electrical and HVAC interior finishes & fixtures installed;
(33) Kitchen appliances provided by builder installed; (34) Exterior finished grade for yard;
(35) Landscaping , lawn sprinkler system, and sod;
(36) Floor coverings carpet etc. installed in the home;
(37) Bath mirrors, interior door handles & hardware installed; (38) Builders walk thru touch-ups and punch list created;
(39) Home closing or final construction loan modification.
Lot & Construction Cost
Increases Moving Entry Level
& Some Move Up Buyers Out of
the Immediate Omaha Area
Bedroom communities surrounding Omaha now offering incentives to woo entry level and move up new construction home buyers to their areas
T h e c o s t o f l o t s a n d b u i l d i n g m a t e r i a l s i s driving many to communities such as Louisville and Springfield
Gonzales staff writer for the OWH, an area home builder’s listing agent was quoted as saying his builder “has had better luck finding affordable land to build on in bedroom communities such as Yutan and Louisville.” The article went on to say “In the Cass County town of Louisville, city leaders have turned to rebates and discounts to coax newcomers into building there. Constructing a 1,800-square-foot home, for instance, can reap about $4,000 in savings for a new resident.”
For those of you who recently have or currently are working with buyers considering new construction; should those buyers be approved for a purchase price around or under $200,000 their options slim down quickly if they’re considering new construction. Even the $200K to $250K new home buyers are finding they have less options when it comes to areas to build in today than in past.
Increased prices for new construction homes is not a bad thing; but for some buyers it does create issues; limited inventory in their price range. If buyers do not have available inventory to choose from it eventually creates a stall point in the housing cycle. If you recall back to your real estate classes the housing market is typically described as cyclical. In that cycle there are buyers starting out, sellers/buyers moving up and sellers/buyers downsizing. If there is a stall point in a part of that cycle it creates a drag on the market. Nothing harmful thus far to our market today other than a small fall of in total sales from last year to this; but thankfully more available lots in small communities outside of the immediate Omaha area has provided a solution for the time being. But whether in surrounding smaller communities or in the greater Omaha metro area, more development needs to take place.
Buyers in the greater Omaha area in the past have had a tendency to move or upgrade homes while trying to remain in or somewhat near to their original home or apartment’s area. A
young to early mid-twenties aged couple starting out in a $125K split entry home near 85th
and Maple would be considered to be in the NW corridor. As their family grows, so does their need for a bigger home. They contact their Realtor® and you begin helping them search for a home. Often times they will want to remain in or near their familiar NW area for a variety of reasons; from kid’s schools, to close proximity to work, or their place worship. There are always exceptions to the rule but most buyers particularly with families start out looking where they’re familiar and comfortable. Now with less available inventory in some existing areas and fewer options available in some price ranges in new construction buyers may be left with 3-choices:
Remain where they are until they can afford more home 1.
Begin making improvements to their existing home to make 2.
it suit their needs
Begin exploring other areas away from their familiar 3.
comfort zone
With communities like Louisville incentivizing buyers to build new at least a percentage of beginning or move up new home buyers are likely seriously considering option-3. In next week’s article we’ll discuss some of the factors that helped create this new market scenario.
