Real Estate News Radio with Rowena Patton

BuilderCPO: Unlocking Equity for Smoother Home Transitions

• Rowena Patton

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The delicate dance between selling your current home and closing on a new build has left countless homebuyers stressed, deposits lost, and dreams shattered. Today we're diving deep into BuilderCPO, a revolutionary solution that's changing the game for both buyers and builders alike.

What if you could unlock the equity from your existing home within just 14 days of pressing a button? That's exactly what BuilderCPO offers, removing the stress and uncertainty from one of life's most significant transitions. For builders, this means greater certainty and fewer canceled contracts—a serious concern as cancellations have doubled compared to recent years.

We explore the fascinating statistics behind the current new construction landscape, where approximately 1.5 million housing starts in 2023 represented an 8.54% decline from the previous year. With mortgage rates hovering around 7% and tariffs increasing material costs, the timing couldn't be better for innovative solutions like BuilderCPO.

The podcast takes you behind the curtain with a revealing look at how top real estate professionals are adapting to changing market conditions. You'll hear real-world examples of how the program works, including the critical "Certificate of Occupancy moment" when builders finally know with 95% certainty when a home will be ready—typically just 14 days before completion.

We also address the practical concerns of buyers like Samantha, who's worried about selling too early and being homeless or selling too late and losing her dream home. With flexible leaseback options and the ability to access equity quickly, BuilderCPO creates a smooth path forward for new construction buyers.

Whether you're considering building your dream home, selling your current property, or you're a builder looking to reduce cancellations, this episode provides invaluable insights into navigating today's complex real estate landscape. Ready to remove the contingency and move forward with confidence? Give us a call at 828-333-4483 to learn how BuilderCPO can make your transition seamless.

Speaker 1:

This is the Plain English Real Estate Show with your host, rowena Patton, a show that focuses on the real estate market in terms you can easily understand. Call Rowena now. The number is 240-9962 or 1-800-570-9962. Now here's the English girl in the mountains, the agent that I would trust, rowena Patton.

Speaker 2:

Hello and welcome to Real Estate News Radio. I'm Rowena Patton, your trusted friend in real estate, here to help you build and manage wealth through smart real estate decisions, including buying, selling, remodeling and financing. Today we're diving into BuilderCPOcom, a game changer for new home buyers and builders alike. One of the biggest challenges buyers face is timing their home sale while juggling a new build. With Builder CPO, we take the stress out of the equation by unlocking the equity from their existing home within just 14 days of pressing the button. And for builders, this means greater certainty, since most know with 95% accuracy when a home will be ready within two weeks of completion. It's a win-win that keeps deals moving and dreams on track. We have a question from John, who works for a home builder. Hi, John, and welcome to the show.

Speaker 3:

Hi Ro and thanks for having me on. I'm observing a decline in new home builds across the USA. Observing a decline in new home builds across the USA In 2023, there were approximately 1.5 million housing starts, down 8.54% from the previous year. I believe this trend is influenced by rising interest rates and economic uncertainties affecting builder confidence. What are your thoughts on this situation?

Speaker 2:

You're absolutely right, john. Elevated mortgage rates, which have hovered around 7%, have dampened demand, leading builders to adopt a more cautious approach. Additionally, recent tariffs on essential building materials like steel and aluminum have increased construction costs, further impacting the pace of new developments. However, forecasts suggest a potential rebound, with new home construction expected to reach about 1.1 million units in 2025, a 13.8% increase from 2024. This anticipated growth could help alleviate some of the current housing shortages and stabilize the market.

Speaker 2:

2017 also saw the launch of the full market value cash offer that powers our builder CPO program. The ability for the home buyer to get up to 70% of equity 14 days before they close on their new build home, and then a second check once we clean up their old home, means that they can close with a lot more ease, as they can press the big red button for the closing 14 days out from the closing. 95% of builders know, 14 days out from requesting their CO, that they can close on time. This flips from 95% of builders being uncertain about the closing date beforehand. Sorry for the long answer and just to clarify for our listeners CO, short for Certificate of Occupancy, is the final approval that builders receive before new owners can officially move into their home.

Speaker 3:

Thanks for that, ro. I'll definitely be looking into builder CPO. Just last week we had a buyer cancel their new home build and lose their deposit because they couldn't sell their existing home in time. They were expecting multiple offers, still operating with the mindset of a few years ago without realizing how much the market has flattened. I'm going to reach out to them and see if this program could be a solution for them.

Speaker 2:

That's great, john. Give us a call at 828-333-4483. That's 828-333-4483. We can help you around the country and you can call 24-7. We can help builders and new home buyers everywhere in the country with this program and, of course, now we can help home sellers and buyers everywhere too, with my amazing, highly trained partners around the country. If we run high level solutions like this, imagine what we do when we are selling a conventional home listing. Give us a call to get started, even just dipping your toe in at 828-333-4483, whether you are selling your home, second home or building a new one.

Speaker 2:

Welcome back to the show. If you've just tuned in, maybe you just got in your car on a Saturday morning. Grab a coffee, take this in. We're talking about building a new home which, let's face it, most of us have had a dream about for a long time, and some of us have been fortunate enough to actually build our new home. Talking about the crazy good agents in our network, I want to pull back the green curtain. We're going to Oz today to just share with you a class that we did last week. We do these three times a week for our agents. We all get on and learn together. I learn so much from them and I want you to take a listen to what we go through. You know you don't often get a sneak peek behind the scenes of what real estate agents, who are hungry for learning, actually do, so let's take a listen.

Speaker 2:

If your market has flattened or it's getting slower and we're seeing a lot of talk about this, by the way, even Trump has said, yeah, I don't want to predict whether there's going to be a recession or not Guys, we're going into a recession. Get over it already. It's normal, right? I was told yesterday on the webinar to get a rant, so apparently I'm really good with the rant, so I'm not making any apologies for my rant anymore. Compared to this time two years ago, is your market increased or decreased? So put your thumbs up. If you feel like your market has increased from two years ago, put your thumbs up. If you feel like your market is flat or decreased from two years ago, yeah, everybody's thumbs should be going up, because I could go in right now and show you the zip codes and show you the price declines. Right?

Speaker 2:

Is the spring coming? Absolutely. For most of us, especially if we're in the north, the spring coming means more listings. We're looking at a much bigger picture than are there more listings coming next month? Right, there'll be a lot more listings. More listings coming next month? Right, there'll be a lot more listings for me coming next month too. A big part of why those listings are coming is because what People see a recession coming right and they want to get out at the height. That's what happens in recessions. It's not bad for real estate agents at all. All right, let's go back to builders, back to the builder GPO. So the builders are getting canceled contracts right now. Why they're getting more cancellations than they've had in eight years? Why do you think that is? These are people that have to sell the house to purchase their new house.

Speaker 4:

They have to be a contingent buyer.

Speaker 2:

Right, because why? What's going on with their old house? Why is the builder canceling the contract? Do you think?

Speaker 4:

They couldn't sell their existing house.

Speaker 2:

Exactly so. Joey and his wife and his ex-wife Deanna and his wife Selena couldn't sell their existing house. 60 to 70% of people who are building a new house have to sell the house to move into their new build. The others, you know, don't have a house, they've already sold it, or something like that. As we flatten decline for the next three to five years, right, flatten decline means not as good as two years ago, right? So let's clarify what I'm talking about. This is perfectly normal. What is happening? It's designed to happen.

Speaker 2:

Clément Juglar, juglar, 1860, set it in place. I'm doing a whole radio show about this, by the way. Builders are cancelling contracts. Do you think they're like that? What do you think you might say to a builder we can remove the contingency. There's kelly in utah. Um, yes, we can remove the contingency. They'll go what, oh my? So here's the funny thing. So I do a discovery call for new agents you've all all been on it, I'm sure on new agents to the program, tuesdays and Thursdays, and now it's for the listing engine as well and to go through the listing presentation and how you present all of this. So if any of you need more help, tuesdays and Thursdays at noon EST.

Speaker 2:

So I had someone a couple of months ago join who worked for, worked for a developer and he said, oh gosh, I've got to get out. It was a one-on-one. He said, oh, I've got to get off the call now because I work for a developer and I have to cancel a contract. I'm like, wait what? No, build a CPO, we can buy it. We can have their money out in two weeks and we can have them smoothly go into your program. It's all built that. What we're doing, guys, is we're changing this from just any old other cash offer to why a cash offer is valuable. We're solving a problem for our niches. We're solving a problem for our niches CPOexpertscom forward slash programs. You can always find this there. All of the programs are on here. So here's the builder CPO.

Speaker 2:

So one of the biggest challenges, one of the biggest challenges is hitting the move-in deadline right. Why do builders have problems? Do you think what comes up that causes a builder to delay? We've got the way for you to do it right, because we're going to build you that list of builders and, trust me, most of the builders are going to meet with you when you say I've got hundreds of buyers on my database. I'm working with hundreds of buyers. I'm meeting builders in the area so I can match make you with my buyers. You're selling for them.

Speaker 2:

Why do builders not meet their build time? You'll buy a new build right In a community or a custom home builder, whatever it is. It could be a $5 million new build and the majority of the time you're having to sell your house. How do you know when to sell your house? So the builder says it's going to be ready July 4th. What percentage of the time do you know? Is it going to be ready July 4th? Have a guess when the builder says it's going to be July 4th and this is not a poke at builders- Greater than zero and less than one.

Speaker 2:

I think you're right. Honestly, maybe 5% hit it, maybe Maybe the massive home builders. But even the massive home builders why? What happens when a port gets closed down? Have we seen port closures? What happens with tariffs? All of the above Builders are worried about tariffs right now.

Speaker 2:

This is an amazing group, by the way, that I learned so much from. And of course, then here is new construction. This is just this morning. Tara Harville is a top 1% agent in the country. New construction pre -sale will have a few builders that are hesitant to do a pre-sale because they don't want to price a home that won't be completed for six to nine months.

Speaker 2:

Do you think tariffs have got anything to do with that? We all know what's happening with tariffs, right? Nobody's been living under a rock. Maybe you're not listening to the news because it's so terrifying right now. So, besides doing a cost plus contract, she says anybody have a good clause that protects the builder. Like if prices and materials go up more than X percent. Right, here's your clause, right here. Like if prices and materials go up more than X percent. Right, here's your clause, right here. If anybody wants the clause, it's going to be on the training. It's very simple. So you're all like, oh well, the builders have got this already, guys? No, they haven't.

Speaker 2:

Remember, I got full permission to go on my rant. They don't? We think they know it, they don't. Half of these builders were construction workers that were working for builders five or ten years ago. They haven't experienced tariffs or escalation clauses or what to do. Right, here's your clauses. We've got all of that for you. I mean, obviously, have them, you know, check it with their attorney. It's very clever, like, and it's all obvious when you read it, but none of us would know it right. So we've got all of that training for you. We've got tariffs. We've got ports. We've got what else? What slows construction down? Come on, kelly, you're our expert here.

Speaker 5:

Weather, weather Delivery. Employment yeah.

Speaker 2:

Immigration issues with employment yes, oh, resources, resources both material and I'm not going to say where I saw it, but they were talking about ICE rounding up people and the comment was made something like they're rounding up all the construction workers and we know there's some truth in that. Right, so we've got, obviously we've got those issues right. So it's another thing we should. You know, maybe you can't get the workers to complete the house. That is why 95% of the time, the house is not going to be complete at the date. What would you suggest to homeowners guys? How are homeowners getting through this? Do you think it's stressful when you're building a new house? You're building a new house, so you're excited, right? It's stressful when you're building a new house. You're building a new house, so you're excited, right? It's like when you're buying a house, you're excited. I'm buying a house. Well, what if this happens? And what if that happens? You can take a lot of that. What if the Boolean code out by building a new home right Now? Finally, you've made it.

Speaker 2:

You're 60 years old, you've got all this cash. I I don't know you've won on the stock market, whatever. You're 40 years old, you're building a new house. How freaking cool is that? You're getting out of your crappy old ranch that you've always wanted to remodel. Your wife is beating you around the head because you haven't earned enough money or whatever it is. She hasn't earned enough money. You haven't remodeled it. You haven't done your honey-do list. Finally, you're building a new house. How do you know when to list it? Do we list it and hope for the best? You've got somebody coming to you and you're like I want to list my house, please. The thing is, I'm building with Kelly. Kelly's a home builder. I'm building with Kelly. I don't know when to list my house. What would you suggest?

Speaker 5:

You have to determine how much time your typical market takes in that city, in my case, to sell. Boom. Now, I generally plan on about, I generally plan on about two months. But okay, I'm into the cash cpo where they, where we can give them up to like 90 days. You can start that a little more in advance, because the other thing that ties into that too is somewhere along the line some builders are more aggressive than others where they want you to remove the contingency to sell your house.

Speaker 5:

Yes, and you're always in a. You're always running in a backup position because anybody can come in behind you and put an opera on that new bill that you're doing with your style, your personality, your love of cabinets, your love of everything, and somebody can come take that out from underneath you because you may not be able to get that contingency off and that's going to be they may. You're're going to lose, you're going to go hard on your deposits. Within two weeks you're going to have a 60-day time frame, either at the beginning or towards the end, to take your contingency off, and it may be sooner rather than later. And most builds are going to take. I've never had a build take less than nine months.

Speaker 2:

There's no way so, kelly, everything involved, kelly, now do we think he's going to do really well with this program? So, guys, you lose your deposit, right? People haven't been concerned about this because two, three years ago, four years ago, when they made plans to build a new house, because that's how, how long these plans. Some people have 10 years before they build a new house, right, but they've always wanted to build a new house. They're finally building a new house. These plans have been there forever and guess what? Houses are selling at a click.

Speaker 2:

Right, two years ago, most of us were getting multiple offers. You've got to have trust, guys, in the market. Just go look at Clermont-Juglar. Look at any of the series, the episodes that we've done about Clermont-Juglar and how the market is flattening Three and three and a half to five and a half years. I think it's already flattened. Two years ago, almost every market in the country crested. Two years ago. Right, we've got three, four, five years down to the bottom.

Speaker 2:

Is it going to take longer and is it going to be harder to sell houses based on that for the next three to five years? Put your thumbs up if you think it's going to be harder. Put your thumbs up if you think it's going to be harder. Put your thumbs up. If you think it's going to be easier. Based on the fact we know we're going into a recessionary period for the next three to five years, are houses going to sit longer or are houses going to sell faster? Are we going to go back to the multiple offers that we had two years ago, based on the fact that we're in a recessionary period? I just want thumbs up or thumbs down. Which one Do we think houses are going to sit for longer? Put your thumb up. Do we think houses are going to sell faster in the recessionary period coming up? Put your thumb up.

Speaker 2:

Let me give you a stat on that. Builders, for the last two years a year and a half have been cancelling two to three times more contracts than they were when we were getting multiple offers. Does anybody see that as a sign of anything? And let me ask it a different way Put your thumb up if you think it's pretty likely. Based on history, we're going into a recessionary period. Okay, now we're cooking with gas. In a recessionary period, houses take longer to sell, even with everything else going on. It's just fact, which means that and we're already seeing it with builders. Builders are cancelling contracts at over two times what they were a couple of years ago. That means you've got a very receptive audience with builders.

Speaker 2:

Do you think builders like cancelling the contract? Of course not. Do you like cancelling a listing contract or a sales contract? Of course not. That's what it is for the builder. The builder does not want to cancel that contract.

Speaker 2:

You have a tool, the builder's CPO, right. You have a program whereby you can say Mr Builder, you don't have to cancel, we can get you. We can get them the majority of their money in 14 days. What's more, two thirds of them are going to go make more money than with conventional home sale and the reason for that is because we go in and we do a deep clean to a full remodel. They don't have to be in the house, we can. They can get the majority of their equity close on your home.

Speaker 2:

Anybody think about the critical date that comes up in a builder CPO. So the builder's now building the home. Before we were talking about material delays, labor shortages, weather, difficult to builders, and now, of course, we've got ICE going in, taking a bunch of their workers away. That's true, fact, just fact. I'm not being political. They just are right. If all of that is happening, you've got your builder now is saying they're going to close on July 4th. We've already established probably 5% of the time they'll hit that date.

Speaker 2:

When do they know the date? What is the turning point in the builder trajectory? I'll give you a clue. It happens about a couple of weeks before the new homeowners can move in. What is it that the builder goes to get CO? There comes Kelly again. How are you so well versed in this, kelly? So you get a CO right, that's called a certificate of occupancy. Most of you, I hope, have listed new construction homes so you'll know it's a CO. Two weeks before it's complete they request the CO. In most markets you can request the CO two weeks before you're due to get it, or it's probably even four weeks before. Right, because the inspectors have got to come out. You're really requesting it to dovetail how long it takes your inspectors to come out. Most of that time we can pinpoint those 14 days. Why is that important, kelly? What percentage of the builders can give you a date two weeks before you're supposed to move, ie the co date?

Speaker 2:

probably 95 95 it flips right, we go from 95, can't give you if it seesaw flips, only five percent aren't going to hit the date because something comes up at that. So 95 of the time you, as the agent, the builder, can say, hey, agent, you know I gave you uh, bob and sally to work with. It's time for them to press that button. Do you want to follow up with them or do you want me to? Does that sound compelling for you for an offer to a builder? Do you think most builders would understand this or not? When you go and meet with them and you go with your builder cpo mug or flyer or whatever it is you take as your giveaway, or we have the flyers all built with the bullet points on, would it be compelling? You're going to go and see 20, 30 builders, however many you've got locally, especially your builders who are custom, because most of them just cycle through different agents. And remember, you're not going as a real estate agent, just like senior living, senior living, you're not going as a real estate agent, you're going as a senior living, cpo expert. So now you're going as a builder CPO expert to see the builders. Thumbs up if you think you get more business. If you go meet with 20 builders, okay, thumbs down if you think you'll get less business and it's a complete waste of time. If you go meet with builders, we've got the system to get you the appointment right and they're going to give you referrals. Guys, not only that, out of that 20 that you go and meet, do you think you might pick one up that's just starting to build a new home and they think you're so amazing that they're going to give you that listing? How many times do you think that's going to happen? At least once. Right, that's what you're doing with the builders, essentially. Right, you're bringing them a program that can take all of their much of their mess away, because now their buyers don't have to worry. They're just going to press that button 14 days out.

Speaker 2:

So back in the day and this was really at the bottom of the market, by the way I represented 12 different developments. I'd been an agent for maybe two years at that point. How do you think I got those developments? I hadn't written the book yet. I probably didn't even have. I may have had the radio show.

Speaker 2:

What I had is all the programs that are in Find your Unique Value Proposition. Go read them. I've got something different. You get to steal all the different. All the programs are in Find your Unique Value Proposition. It's on the app. The whole book is on the app in five minute bite size pieces. It's all there for you, right? So I would suggest that you all look at your listing presentation. Little tip all those programs that are in the book are in the listing presentation that you all have. The listing presentation also has in it the three options the conventional sale, the certified pre-owned sale and the cash CPO sale. Three options Give your sellers options. You're a consultant. This will change your listings. It will change your listings.

Speaker 2:

Success leaves clues. All you've got to do is go do it. When I say all you've got to do is go do it, I mean go meet the builders, go meet the communities. That's what happens when you go and see the builders. The builder now knows you. You're going to put the builder in your phone with builder next to them, right? You want a builder? You've got them on speed dial. If you want, you can put four of them in a text message group and go hey, I've got a client that wants to build a house. They've only got 350. Do any of you have any programs for that? Hey, I've got a client wants to build a $3 million house but they need it built by July. Do any of you have programs for that? There's all kinds of things you can do with it. You've got them on speed dial. How many builders you've got on speed dial? How many builders you got on speed dial right now? Probably not that many.

Speaker 2:

Do we have enough homes right now for the market? Okay, Put your thumb up if you think we have enough homes. If you look at the stats on that, you may be saying that. Whomever it was that put the thumb up for that because you're seeing houses sit longer. Put your thumb up again, if I'm right on that. Like, what's making you think there's enough houses out there for people? Is it because your market has slowed down and houses are taking longer to sell? Let's try the other way around. Who thinks there's a deficit of houses? Is everybody crying out for builders to build more houses because there's not enough houses for the people who want to buy a home? That's the true fact. Why are builders not building? Why are builders slowing down? More regulation by the government, more regulation Is regulation with the current president? Is regulation going up or going down. Put your thumb down if you think it's going down. Your thumb up if it's going up. Regulation, you think regulation is going up.

Speaker 6:

Kelly, they're trying to make it go down?

Speaker 2:

Yeah, they're trying, they're talking, but they haven't Right, but look at what's happening, especially in areas like Joey's area. Joey, are regulations going up in LA or going down from what they were?

Speaker 4:

Like Kelly said, they're trying to uh to bring it down. Yeah, a lot of things big time, a lot of a lot of red tapes absolutely.

Speaker 2:

You may have heard there've been some fires right that burn thousands. How many did it burn, joey? Do we know? We've forgotten about it already, of course I forgot.

Speaker 4:

I forgot it's. It's a lot, it's a lot.

Speaker 2:

It's thousands, so thousands of homes, thousands so they're stripping, they're putting requirements to strip a lot.

Speaker 2:

It's a lot, it's thousands. So thousands of homes, yeah, thousands. So they're stripping. They're putting requirements to strip a lot of regulation. So it used to take two and three years to get permits in where Joey lives. How crazy is that? Right? So all the mayors are getting together. They're having round tables on this. That's happening all over the country, by the way. The regulations there's a big push to remove regulations on building.

Speaker 2:

What about interest rates? Is that putting builders off? What about the fact that builders are being told we're going into a recessionary period? Good old Clément Juglar followers or any CPA ever. By the way, don't listen to real estate agents they're about.

Speaker 2:

Is the market great? Sure, the market's great. Great for whom? It's not a bad market because we're going into a recession. That's the other thing to learn. It's not a bad market at all. It's freaking fantastic for investors and buyers. Right, I've been priced out of the market. A market correction is fantastic for investors and buyers. And, by the way, don't you think that would be good for your seller that's probably buying a new house? Don't you think it's amazing right now for a home seller? Because they're still getting to sell at pretty much the top if they get out now. What are you hearing there? Urgency, right. So the builders are still in a relatively good situation.

Speaker 2:

However, as the market is declining remember you don't build a house tomorrow. It takes you six months, right? Or nine months, kelly's saying in his market. I think you're saying nine months, kelly. In our market in Asheville it's 18 months to build a house. Don't ask me why. Maybe it's permits, maybe it's the mountains. You know the land isn't flat. Yada, yada, yada. 18 freaking months. Does the average builder know what's going to Wait? Average agent builder, anyone, a average senator, know what's going to happen in the market in 18 months? Who thinks that builders don't know and a little nervous about where the market's going to be in 18 months? Remember most people have to sell the houses to buy their new house. Put your thumbs up if you think builders are a little nervous. Do you think this is flipping prime time right now to go and meet with builders?

Speaker 6:

Yeah, I was going to tell you the builders are nervous a little bit. There's always uncertainty in it. But guess what? They're not going to shut down their businesses just because of it. They have to make adjustments. You don't see builders just shutting down. Perry Holmes, dr Horton, all these guys. They're not just going to close up shop and leave. Houses are always going to be in demand. My opinion is we're never going to meet the demand that people want. Home building is always going on as long as there's water to support the space.

Speaker 2:

You just said something killer there, kelly. You said builders have and this is big time for Joey. You said builders have and this is big time for Joey builders have to make adjustments. Do you think one key adjustment might be the builder CPO program? The market's declining. It's flatter than it was, houses are taking a bit longer to sell, builders already are canceling more contracts. They want to get the contract out, guys, so they can resell a spec home, and even the spec homes are taking long to sell. I've got a spec home right now. We got the CO two weeks ago. We've had two showings brand new homes, gorgeous. It's happening everywhere. So do you think that the builder CPO might be an amazing adjustment? What do you think?

Speaker 4:

A hundred percent.

Speaker 6:

It's going to take uncertainty off of their plate on a lot of options. Yeah, john Carson, I live in Falmouth, massachusetts, which is on Cape Cod Fantastic.

Speaker 2:

So, joey, I'd like to go over to you. Where are you at and where are you helping people?

Speaker 4:

Thanks, ro. I'm here in California. We're here in Los Angeles, to be exact. So, like you've mentioned earlier, when the market is slow, it doesn't mean that we have to slow down. It's the best time for us to plant the seeds right now and eventually, when the market picks up, it's the best way for us to harvest. It's harvest time is going to come, for sure. Yeah, so we just have to focus, and building relationship with the builders is the best time to do at this point.

Speaker 2:

Absolutely, and anybody listening today can go and get their cash offer at cashcpocom. That's cashcpocom. Put your address in. We're not going to bug you. We're not going to force you to sell your house. It's a great way to get your full market value cash offer. Guess what? It also gives you a house value. That's way better than any of this automated nonsense, because it's not as good as a real person looking at it, and that's what we'll do for you. Chris, would you like to say where you are?

Speaker 7:

I'm in the Bradenton, Sarasota area of Florida.

Speaker 2:

I work with the senior communities and also just traditional listings and buyers Awesome, we've got Kelly Denny in Utah who is out there helping buyers and sellers. Little inundated right now with helping seniors Kelly.

Speaker 6:

Yes.

Speaker 2:

That's awesome, great stuff, guys. Thank you so much. Now we've got a special guest, samantha, who's currently building a new home and has some questions. Welcome to the show, samantha.

Speaker 8:

Hi Ro, Thanks for having me. My husband and I are building our dream home and it's supposed to be done in about four months, but we still haven't listed our current home yet because we're scared it'll sell too quickly and we'll be stuck without a place to live for months. How would Builder CPO help us?

Speaker 2:

Great question, samantha. With Builder CPO, you don't have to list your home prematurely. Instead, you can lock in an offer on your home but wait to press the button until you need the funds. This way, you stay in your current home without stress and when you're ready, you get your equity in 14 days to complete your new home purchase.

Speaker 8:

Oh, wow. That's amazing. But what if the market shifts in four months? Could I still get a fair price for my current home?

Speaker 2:

Absolutely. We know markets can change, so the offer is structured to be competitive and fair, based on real-time market conditions. Plus, you're not locked in until you choose to activate the sale.

Speaker 8:

That makes sense. Another thing I'm worried about is our builder pushing the closing date back. What happens if I press the button and then my new home isn't ready in time?

Speaker 2:

That's a common concern With Builder CPO. You have flexibility. You can set up a leaseback option, meaning you can stay in your home for a short period even after closing, giving you breathing room in case of delays. You can stay up to 90 days and even longer, on a case-by-case basis.

Speaker 8:

That's a game changer. I think we'll be looking into this. Thanks, Ro.

Speaker 2:

You're so welcome, Samantha, and that's exactly why this program exists to take the stress out of this process. Welcome back to Real Estate News Radio. I'm Rowena Patton, and today we're diving into the world of new home construction what's happening with builders, mortgage rates, material costs and buyer demand. If you're thinking about buying a new home or you're in the building industry, this is a must listen. Joining me today is Mark, a seasoned home builder, and Sarah, a home buyer, who's considering new construction. Mark, let's start with you. What are you seeing in the industry right now?

Speaker 9:

Hey, Ro, thanks for having me. Well, it's been an interesting time for builders. Right now, total housing starts are at about 1.36 million, which is actually down almost 4% from last year. But there's a twist Single family homes are up by about 6.5%, while multifamily starts have really slowed down. So builders are still moving forward, but we're being much more strategic about what and where we build.

Speaker 7:

That's surprising, because I keep hearing there's a housing shortage. Why would builders slow down if we need more homes?

Speaker 2:

Great question, Sarah. The US is actually facing a housing shortage of between 4 and 7 million homes, so you'd think builders would be going full speed ahead. The issue is that high interest rates and rising costs have made it harder for buyers to afford new homes, and that affects builders. That's why we're seeing fewer multifamily projects and more focus on smaller, affordable single-family homes. The median size of new homes has dropped to 1,791 square feet, down from almost 2,000 square feet just a few years ago. Builders are adjusting to what buyers can afford.

Speaker 9:

Exactly Ro, and it's not just home sizes. Townhomes are becoming a bigger part of the market. Right now, about 17% of single-family homes being built are townhomes, compared to just 10% a decade ago. They're more affordable, require less land and can be built faster, so they're a good option for buyers looking for something new but more budget-friendly.

Speaker 7:

I've actually looked at townhomes because single-family homes feel out of reach. But I've also heard that builders are raising prices. Are prices still going up or are they stabilizing?

Speaker 2:

It depends. We've actually seen median home prices level out a bit down, about 6.8% from their peak, but builders still have to cover rising costs. The big problem is tariffs and material shortages. Tariffs and material shortages For example tariffs on steel, aluminum and even Canadian lumber have added $7,500 to $10,000 to the cost of building an average home. And labor shortages aren't helping either. Builders are paying more to get skilled workers, which drives up costs.

Speaker 9:

Yep, those costs really add up. And here's another factor Builders are having to offer more incentives to get buyers into homes. A lot of builders are offering things like rate buy-downs, paying closing costs or adding upgrades just to make it easier for buyers to afford a home.

Speaker 7:

That's good to know, because interest rates are what's scaring me the most. If I buy now, am I stuck with a high mortgage rate?

Speaker 2:

If I buy now, am I stuck with a high mortgage rate? Not necessarily. Right now. The average 30-year mortgage rate is around 6.65%, which is high compared to a few years ago. But many builders are working with lenders to offer temporary rate buy-downs, meaning they'll cover part of your mortgage cost for the first few years to keep your payments lower. When we sit down, we'll look at your situation from all the angles and look at what is available to you at that time. That's my job.

Speaker 9:

That's been a huge help for us, Ro. If buyers are worried about rates, we say buy the home, refinance later, because rates won't stay high forever, but home prices probably aren't coming down much more either.

Speaker 7:

Okay, that makes sense, but I've also heard that some builders are delaying projects. Are new homes taking longer to build?

Speaker 2:

That's another great question. On average, new home construction takes about 7.3 months from start to finish, but with labor shortages and supply chain delays, it's been closer to eight or nine months. In many areas. Builders are trying to speed things up, but delays can still happen, especially when getting permits or inspections, which vary by location. In the mountains of Western North Carolina it's common for it to take 18 months. One of my builders, Joe Shively, has a beautiful home listed with me right now that only took him a few months to build. He is the exception.

Speaker 9:

That's why buyers need a backup plan. I always tell buyers to have a little flexibility, because even with the best scheduling, delays happen. But one way to take the stress out of the process is programs like Builder CPO that lets buyers access their home equity within 14 days so they don't get stuck waiting for their old home to sell before moving into the new one.

Speaker 7:

I was actually going to ask about that. My biggest fear is selling my home too early and not having a place to live, or waiting too long and losing my new build. So Builder CPO helps with that.

Speaker 2:

Exactly. Here's how it works you secure an offer on your current home through Builder CPOpo and when you're ready, you press the button to access your equity within 14 days. That way, you have the money you need for your down payment and closing costs without the stress of timing your home sale perfectly. Once you move into your, you know your new build home with the majority of your equity. We go to work on your old home and do any cleanup necessary to get your top dollar and then, when it sells, you get another check. Two-thirds of our sellers actually make more than with a conventional listing and you've got the convenience of not worrying about when your new home might be ready. That's actually really smart.

Speaker 7:

I know someone who had to back out of a new construction deal because their home didn't sell in time and they lost their deposit.

Speaker 9:

It happens all the time, but Builder CPO prevents that by making sure buyers can move forward without the uncertainty of waiting on the market. Honestly, it makes me mad that people are putting their deposits in jeopardy. There's no need when we have this.

Speaker 2:

Exactly, and the best part is buyers still keep the upside if their home sells for more than expected, so it's a win-win.

Speaker 7:

I love that it seems like builders are really adapting to the market.

Speaker 2:

They are, and buyers should know that, even though the market is shifting, there are still great opportunities to buy a new home. With the right incentives, financing options and programs like BuilderCPO, it's possible to make the move without unnecessary stress.

Speaker 9:

Absolutely Ro, and for any buyers out there thinking about new construction, talk to your builder about the incentives and financing programs available. You might be surprised at what's being offered.

Speaker 7:

This has been super helpful. I was hesitant about new construction, but now I feel like I have more options than I realized.

Speaker 2:

That's why we do this show. If you're considering a new build, talk to your builder, explore your financing options and check out BuilderCPOcom for more details on how to make your move stress-free. Welcome back to Real Estate News Radio. I'm Rowena Patton and we're continuing our deep dive into new home construction. We've covered how natural disasters are reshaping building strategies across the country, but what about the challenges that everyday buyers and builders are facing right now? Today we are talking to James. He's been in the middle of building his dream home and, like so many others, he's hit some unexpected roadblocks. James, welcome to the show.

Speaker 10:

Hey, Ro, thanks for having me. I've been listening to the show for years, but now I'm living it. My wife and I started building a home outside of Nashville and we thought we had it all planned out, but now, between material shortages, delays and price increases, we're feeling a little stuck. I wanted to see if you had any advice for buyers in our position.

Speaker 2:

Oh, james, you are not alone. Builders and buyers across the country are facing similar struggles. Let's start with the big one delays. What's the biggest holdup on your home?

Speaker 10:

Well, at first everything was on track, but then our builder told us that windows and appliances were going to take way longer than expected. Our move-in date keeps getting pushed back, and now we're scrambling to figure out if we need to extend our lease or crash with family.

Speaker 2:

This is one of the biggest frustrations right now. The supply chain disruptions that started a few years ago are still affecting home building today. Windows, garage doors, hvac systems and even basic electrical components can cause major slowdowns. Nationally, we've seen lead times for windows stretch from four weeks to 16 weeks. In some cases that's three extra months of waiting.

Speaker 10:

That sounds about right. What can we do? We're worried that if we don't get into our homes soon, interest rates might go up again and then our monthly payments will be even higher.

Speaker 2:

A valid concern. One option is to talk to your builder about material substitutions. Some builders have been able to get homes finished faster by using alternative window brands, adjusting appliance packages or tweaking floor plans to accommodate what's available sooner. Have you asked about any workarounds?

Speaker 10:

Yeah, we asked, but they said it might cost more and honestly, with prices going up everywhere, we don't want to add to our budget.

Speaker 2:

Understandable. Here's the good news. Some builders are offering price protection guarantees. They lock in your price at contract signing, even if there are delays. Have you checked if your builder offers this?

Speaker 10:

I haven't, but I will now. What about interest rates? If we get delayed and rates go up, we could end up paying a lot more than we originally planned.

Speaker 2:

That's where rate locks come in. Some lenders offer extended rate locks for new construction, usually between 6 to 12 months. This lets you secure your rate today and protect yourself from increases. Some even allow a one-time rate reduction if rates go down. Before you close, definitely check with your lender on that.

Speaker 10:

Okay, that would be a huge relief. Another thing I wanted to ask about is hidden costs. We budgeted carefully, but now we're seeing all these extra charges, permits, impact fees, even higher costs for lumber than we expected. We feel like we're getting nickel and dimed. Is this normal?

Speaker 2:

Unfortunately, yes, construction costs have been fluctuating and many cities have increased permit and impact fees. Some areas have seen impact fees jump by 20% in the last year alone. Your best bet is to have your builder give you a detailed breakdown of every cost so there are no surprises. Also, look at your contract. Some builders include escalation clauses which allow them to pass certain cost increases on to you. If you have one of those, you may need to negotiate.

Speaker 10:

I'll have to double check our contract. So do you think it's still worth building right now, or should we have just bought an existing home?

Speaker 2:

That's the million dollar question. Here's the thing Buying an existing home right now isn't necessarily easier. Inventory is still historically low, meaning you'd likely be still dealing with high mortgage rates. New construction lets you avoid those bidding wars. Customize your home and benefit from builder incentives like closing cost assistance or rate buy-downs. And after all, building your first new home has been a dream for two decades.

Speaker 10:

That's what we were hoping for. What about resale value? Will new homes hold their value, or are we taking a risk?

Speaker 2:

Historically new construction homes appreciate well because they require fewer repairs and are built to the latest energy and safety standards. Right now, with the housing shortage still looming, demand for well-built homes is likely to remain strong. If you're in a growing area like Nashville, where companies are expanding and people are relocating, you're in a good spot for long-term value.

Speaker 10:

That's a relief. One last thing If you were in our shoes, what's the best move to get through this process smoothly?

Speaker 2:

James, if I were in your shoes, I'd do three things Lock in your interest rate ASAP to protect against future hikes. Push your builder for a clear timeline and explore material substitutions to keep things moving. Budget for unexpected costs and delays. A buffer of 5 to 10% can make a huge difference in reducing stress. If you can stay flexible and proactive, you'll get through this and before you know it, you'll be holding the keys to your brand new home that you have dreamed about since your 30s.

Speaker 10:

That's exactly what I needed to hear. Thanks so much, Ro. We'll keep pushing forward and hopefully be in our house soon.

Speaker 2:

You've got this, james, and for anyone listening who's in the same boat, remember new construction has its challenges, but with the right planning and patience, it's one of the best ways to get the home you truly want. Now that we've heard from James and his experience with building a new home, I want to take a few minutes to talk about the bigger picture. If you're thinking about new construction, or you're a builder trying to adjust to today's market, what do you need to know? Let's break it down First. Let's talk about the long-term outlook for new home construction. Right now, even though housing starts have dipped in some areas, demand for new homes isn't going anywhere. The US is still short between 4 and 7 million homes, meaning builders will be playing catch-up for years. Even if the market feels a little uncertain today, long-term trends point to steady growth in new home construction, especially in areas seeing strong population growth like Texas, florida and North Carolina. That brings me to a key question I hear all the time Should I buy a new home now or wait? And the answer depends on your situation. If you're renting and waiting for prices to drop, keep in mind that even if home prices soften slightly, mortgage rates could rise again, making homes just as expensive, or even more expensive, on a monthly basis. What's more, if you're renting and thinking about buying, I want you to take your rent and multiply by the time you might wait. For example, the average rent will cost over $90,000 over three years, and that money is paying someone else's mortgage. Even if the worst case scenario happens and you did buy and there was a drop in value, $90,000 is a pretty big cushion. What's more, you have the freedom of owning your own home and all that goes with that. And if you're worried about rates, remember that some builders are offering rate buy downs, where they help lower your interest rate for the first few years. That's a huge opportunity for buyers who are concerned about affordability. If you can lock in a lower rate today and refinance later when rates drop, you could save tens of thousands of dollars over the life of your loan.

Speaker 2:

Now let's talk about another issue in new construction that isn't getting enough attention permitting and regulation delays and, depending on where you're building, it can take months just to get permits approved. Some cities are faster than others, but in places like California, the strict zoning laws and environmental reviews have slowed down construction significantly. In contrast, states like Texas have streamlined their building processes, making it easier for new homes to go up quickly. What does this mean for buyers? If you're building in an area with a longer permitting process, expect delays before construction even starts. Builders are doing their best to push things through, but this is a reality in many markets. If you're in a time crunch, you may want to consider a spec home, that's, a home that's already under construction or near completion. Spec homes let you move in much faster than a custom build, and often come with builder incentives.

Speaker 2:

Another important trend in new construction is the rise of energy efficient and smart homes. If you're building a home today, you'll want to think beyond just square footage and floor plans. More and more builders are integrating solar panels, smart thermostats and high-efficiency HVAC systems. That can save homeowners thousands in utility bills over the years. Some builders even offer energy efficiency guarantees, meaning they'll estimate your monthly energy costs before you even move in. If energy efficiency is important to you, be sure to ask about these features before signing a contract.

Speaker 2:

And here's something for my real estate investors out there New construction can be a great long-term play. If you're thinking about buying an investment property, look at areas where new developments are happening. Many investors focus only on existing homes, but new builds can offer lower maintenance costs, strong rental demand and tax benefits that make them a smart choice. Plus, in high growth areas, being an early buyer in a new development could mean major appreciation over time. As an extra note for my investors out there around the USA and in Canada, we just launched another new program, the Flip CPO, which is designed to help investors buy a home with just 10% down and no credit score requirements Just a necessity to be able to afford the down payment, and you show this through proof of funds. Our funding partner upfronts the money for repairs and improvements and the buyer is also required to take a 10% share in the repairs and improvements. The home is then listed and, after the funding partner's fee, the investor gets the profits. So what's the bottom line here?

Speaker 2:

The new construction market is shifting, but opportunities are still out there. Builders are adapting, with incentives, smarter designs and more flexible financing options. Buyers just need to be strategic, shop around for the best incentives, plan for potential delays and think about long-term value when making a decision. At the end of the day, whether you're buying, selling or building, it's all about being informed the more you understand the market of the day. Whether you're buying, selling or building, it's all about being informed. The more you understand the market, the better decisions you'll make, and that's why we're here to give you the knowledge you need to navigate this ever-changing real estate landscape.

Speaker 2:

Spring is just around the corner and with it comes the bustling real estate season. Many sellers believe that waiting for the trees to bloom and the grass to green will make their homes more appealing. However, this year presents a unique scenario that might make you reconsider that strategy. Traditionally, spring sees a surge in home listings, as sellers aim to capitalize on the pleasant weather and heightened buyer interest. On the pleasant weather and heightened buyer interest, this year, forecasts suggest an even more pronounced increase in inventory. For instance, in Florida, over 360,000 single-family homes came onto the market in 2024, marking a 9.5% increase compared to 2023. This trend is expected to continue, leading to a more competitive market for sellers.

Speaker 2:

Let's consider the advantages of listing now. Listing your home before the spring rush can provide significant benefits. With fewer properties available, your home is more likely to stand out to serious buyers. Additionally, buyers who are active during this period are often motivated and ready to make swift decisions, reducing the time your property spends on the market. How about dispelling seasonal myths? A common misconception is that homes show better when trees are full and flowers are in bloom. While curb appeal is important, serious buyers focus on the property's fundamentals structure, layout and location regardless of the season. Moreover, listing in late winter allows buyers to envision the property without the distraction of lush foliage, providing a clear view of the home's exterior and land.

Speaker 2:

What about current market dynamics? Recent data indicates that the housing market is experiencing shifts that could favour early sellers. Mortgage rates have fallen to their lowest levels since December, increasing buyers' purchasing power and motivation. However, with the anticipated influx of listings in the coming months, this window of reduced competition may be small. While waiting for spring's full bloom might seem advantageous, the current market conditions suggest otherwise. By listing your home now, you can leverage the lower competition, attract serious buyers and potentially secure a quicker and more favourable sale. Remember, motivated buyers are looking year round and the absence of leaves on trees won't deter them from finding their perfect home.

Speaker 2:

Thank you so much, guys. It's always such a pleasure to be with you on a Saturday. Or, if you're listening to the podcast, it could be years time, who knows, be interesting to look back at the facts and figures that we always collect on these a year, two years or 10 years, or it could even be decades later. You know, the world of podcasts and our radio shows are relatively new, obviously, so it would be very, very interesting to look back, wouldn't it? Thanks again, guys. Love the fact that so many of you listen every week. It's much appreciated. And give us a call 828-333-4483. That's 828-333-4483. You can call us anytime, 24-7. We have people standing by. They will take a message, get it right through to us and I'll see you on the radio next week.

Speaker 1:

This has been the Plain English Real Estate Show with Rowena Patton. Visit Rowena and post your questions at radioashvillecom or call her at 828-210-1648.

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Rowena Patton, NC, FL, DC, CA

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