March 15, 2025 • 53 mins
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.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is the Plain English Real Estate Show with
your host, rowena Patton, a showthat focuses on the real estate
market in terms you can easilyunderstand.
Call Rowena now.
The number is 240-9962 or1-800-570-9962.
Now here's the English girl inthe mountains, the agent that I
(00:20):
would trust, rowena Patton.
Speaker 2 (00:22):
Hello and welcome to Real Estate News Radio.
I'm Rowena Patton, your trustedfriend in real estate, here to
help you build and manage wealththrough smart real estate
decisions, including buying,selling, remodeling and
financing.
Today we're diving intoBuilderCPOcom, a game changer
for new home buyers and buildersalike.
One of the biggest challengesbuyers face is timing their home
(00:45):
sale while juggling a new build.
With Builder CPO, we take thestress out of the equation by
unlocking the equity from theirexisting home within just 14
days of pressing the button.
And for builders, this meansgreater certainty, since most
know with 95% accuracy when ahome will be ready within two
(01:06):
weeks of completion.
It's a win-win that keeps dealsmoving and dreams on track.
We have a question from John,who works for a home builder.
Hi, John, and welcome to theshow.
Speaker 3 (01:17):
Hi Ro and thanks for having me on.
I'm observing a decline in newhome builds across the USA.
Observing a decline in new homebuilds across the USA In 2023,
there were approximately 1.5million housing starts, down
8.54% from the previous year.
I believe this trend isinfluenced by rising interest
rates and economic uncertaintiesaffecting builder confidence.
What are your thoughts on thissituation?
Speaker 2 (01:39):
You're absolutely right, john.
Elevated mortgage rates, whichhave hovered around 7%, have
dampened demand, leadingbuilders to adopt a more
cautious approach.
Additionally, recent tariffs onessential building materials
like steel and aluminum haveincreased construction costs,
further impacting the pace ofnew developments.
(02:01):
However, forecasts suggest apotential rebound, with new home
construction expected to reachabout 1.1 million units in 2025,
a 13.8% increase from 2024.
This anticipated growth couldhelp alleviate some of the
current housing shortages andstabilize the market.
(02:22):
2017 also saw the launch of thefull market value cash offer
that powers our builder CPOprogram.
The ability for the home buyerto get up to 70% of equity 14
days before they close on theirnew build home, and then a
second check once we clean uptheir old home, means that they
can close with a lot more ease,as they can press the big red
(02:45):
button for the closing 14 daysout from the closing.
95% of builders know, 14 daysout from requesting their CO,
that they can close on time.
This flips from 95% of buildersbeing uncertain about the
closing date beforehand.
Sorry for the long answer andjust to clarify for our
(03:06):
listeners CO, short forCertificate of Occupancy, is the
final approval that buildersreceive before new owners can
officially move into their home.
Speaker 3 (03:18):
Thanks for that, ro.
I'll definitely be looking intobuilder CPO.
Just last week we had a buyercancel their new home build and
lose their deposit because theycouldn't sell their existing
home in time.
They were expecting multipleoffers, still operating with the
mindset of a few years agowithout realizing how much the
market has flattened.
(03:38):
I'm going to reach out to themand see if this program could be
a solution for them.
Speaker 2 (03:43):
That's great, john.
Give us a call at 828-333-4483.
That's 828-333-4483.
We can help you around thecountry and you can call 24-7.
We can help builders and newhome buyers everywhere in the
country with this program and,of course, now we can help home
(04:05):
sellers and buyers everywheretoo, with my amazing, highly
trained partners around thecountry.
If we run high level solutionslike this, imagine what we do
when we are selling aconventional home listing.
Give us a call to get started,even just dipping your toe in at
828-333-4483, whether you areselling your home, second home
(04:25):
or building a new one.
Welcome back to the show.
If you've just tuned in, maybeyou just got in your car on a
Saturday morning.
Grab a coffee, take this in.
We're talking about building anew home which, let's face it,
most of us have had a dreamabout for a long time, and some
of us have been fortunate enoughto actually build our new home.
(04:47):
Talking about the crazy goodagents in our network, I want to
pull back the green curtain.
We're going to Oz today to justshare with you a class that we
did last week.
We do these three times a weekfor our agents.
We all get on and learntogether.
I learn so much from them and Iwant you to take a listen to
(05:10):
what we go through.
You know you don't often get asneak peek behind the scenes of
what real estate agents, who arehungry for learning, actually
do, so let's take a listen.
If your market has flattened orit'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 predictwhether there's going to be a
(05:31):
recession or not Guys, we'regoing into a recession.
Get over it already.
It's normal, right?
I was told yesterday on thewebinar to get a rant, so
apparently I'm really good withthe rant, so I'm not making any
apologies for my rant anymore.
Compared to this time two yearsago, is your market increased
(05:53):
or decreased?
So put your thumbs up.
If you feel like your markethas increased from two years ago
, put your thumbs up.
If you feel like your market isflat or decreased from two
years ago, yeah, everybody'sthumbs should be going up,
because I could go in right nowand show you the zip codes and
show you the price declines.
Right?
Is the spring coming?
Absolutely.
(06:14):
For most of us, especially ifwe're in the north, the spring
coming means more listings.
We're looking at a much biggerpicture than are there more
listings coming next month?
Right, there'll be a lot morelistings.
More listings coming next month?
Right, there'll be a lot morelistings for me coming next
month too.
A big part of why thoselistings are coming is because
what People see a recessioncoming right and they want to
get out at the height.
That's what happens inrecessions.
(06:36):
It's not bad for real estateagents at all.
All right, let's go back tobuilders, back to the builder
GPO.
So the builders are gettingcanceled contracts right now.
Why they're getting morecancellations than they've had
in eight years?
Why do you think that is?
These are people that have tosell the house to purchase their
new house.
Speaker 4 (06:57):
They have to be a contingent buyer.
Speaker 2 (06:59):
Right, because why?
What's going on with their oldhouse?
Why is the builder cancelingthe contract?
Do you think?
Speaker 4 (07:06):
They couldn't sell their existing house.
Speaker 2 (07:08):
Exactly so.
Joey and his wife and hisex-wife Deanna and his wife
Selena couldn't sell theirexisting house.
60 to 70% of people who arebuilding a new house have to
sell the house to move intotheir new build.
The others, you know, don'thave a house, they've already
sold it, or something like that.
(07:29):
As we flatten decline for thenext three to five years, right,
flatten decline means not asgood as two years ago, right?
So let's clarify what I'mtalking about.
This is perfectly normal.
What is happening?
It's designed to happen.
Clément Juglar, juglar, 1860,set it in place.
I'm doing a whole radio showabout this, by the way.
Builders are cancellingcontracts.
(07:51):
Do you think they're like that?
What do you think you might sayto a builder we can remove the
contingency.
There's kelly in utah.
Um, yes, we can remove thecontingency.
They'll go what, oh my?
So here's the funny thing.
So I do a discovery call fornew agents you've all all been
on it, I'm sure on new agents tothe program, tuesdays and
Thursdays, and now it's for thelisting engine as well and to go
(08:13):
through the listingpresentation and how you present
all of this.
So if any of you need more help, tuesdays and Thursdays at noon
EST.
So I had someone a couple ofmonths ago join who worked for,
worked for a developer and hesaid, oh gosh, I've got to get
out.
It was a one-on-one.
He said, oh, I've got to getoff the call now because I work
for a developer and I have tocancel a contract.
I'm like, wait what?
(08:34):
No, build a CPO, we can buy it.
We can have their money out intwo weeks and we can have them
smoothly go into your program.
It's all built that.
What we're doing, guys, iswe're changing this from just
any old other cash offer to whya cash offer is valuable.
We're solving a problem for ourniches.
(08:55):
We're solving a problem for ourniches CPOexpertscom forward
slash programs.
You can always find this there.
All of the programs are on here.
So here's the builder CPO.
So one of the biggest challenges, one of the biggest challenges
is hitting the move-in deadlineright.
Why do builders have problems?
(09:15):
Do you think what comes up thatcauses a builder to delay?
We've got the way for you to doit right, because we're going
to build you that list ofbuilders and, trust me, most of
the builders are going to meetwith you when you say I've got
hundreds of buyers on mydatabase.
I'm working with hundreds ofbuyers.
I'm meeting builders in thearea so I can match make you
with my buyers.
You're selling for them.
(09:35):
Why do builders not meet theirbuild time?
You'll buy a new build right Ina community or a custom home
builder, whatever it is.
It could be a $5 million newbuild and the majority of the
time you're having to sell yourhouse.
How do you know when to sellyour house?
So the builder says it's goingto be ready July 4th.
What percentage of the time doyou know?
(09:57):
Is it going to be ready July4th?
Have a guess when the buildersays it's going to be July 4th
and this is not a poke atbuilders- Greater than zero and
less than one.
I think you're right.
Honestly, maybe 5% hit it,maybe Maybe the massive home
builders.
But even the massive homebuilders why?
What happens when a port getsclosed down?
Have we seen port closures?
(10:18):
What happens with tariffs?
All of the above Builders areworried about tariffs right now.
This is an amazing group, by theway, that I learned so much
from.
And of course, then here is newconstruction.
This is just this morning.
Tara Harville is a top 1% agentin the country.
New construction pre -sale willhave a few builders that are
(10:38):
hesitant to do a pre-salebecause they don't want to price
a home that won't be completedfor six to nine months.
Do you think tariffs have gotanything to do with that?
We all know what's happeningwith tariffs, right?
Nobody's been living under arock.
Maybe you're not listening tothe news because it's so
terrifying right now.
So, besides doing a cost pluscontract, she says anybody have
a good clause that protects thebuilder.
(10:59):
Like if prices and materials goup more than X percent.
Right, here's your clause,right here.
Like if prices and materials goup 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.
Remember, I got full permissionto go on my rant.
They don't?
We think they know it, theydon't.
Half of these builders wereconstruction workers that were
(11:22):
working for builders five or tenyears ago.
They haven't experiencedtariffs 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, andit's all obvious when you read
(11:42):
it, but none of us would know itright.
So we've got all of thattraining for you.
We've got tariffs.
We've got ports.
We've got what else?
What slows construction down?
Come on, kelly, you're ourexpert here.
Speaker 5 (11:55):
Weather, weather Delivery.
Employment yeah.
Speaker 2 (11:58):
Immigration issues with employment yes, oh,
resources, resources bothmaterial and I'm not going to
say where I saw it, but theywere talking about ICE rounding
up people and the comment wasmade something like they're
rounding up all the constructionworkers and we know there's
(12:19):
some truth in that.
Right, so we've got, obviouslywe've got those issues right.
So it's another thing we should.
You know, maybe you can't getthe 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 tohomeowners guys?
How are homeowners gettingthrough this?
(12:39):
Do you think it's stressfulwhen you're building a new house
?
You're building a new house, soyou're excited, right?
It's stressful when you'rebuilding a new house.
You're building a new house, soyou're excited, right?
It's like when you're buying ahouse, 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 bybuilding a new home right Now?
Finally, you've made it.
You're 60 years old, you've gotall this cash.
(13:00):
I I don't know you've won onthe stock market, whatever.
You're 40 years old, you'rebuilding a new house.
How freaking cool is that?
You're getting out of yourcrappy old ranch that you've
always wanted to remodel.
Your wife is beating you aroundthe head because you haven't
earned enough money or whateverit is.
She hasn't earned enough money.
You haven't remodeled it.
You haven't done your honey-dolist.
Finally, you're building a newhouse.
(13:22):
How do you know when to list it?
Do we list it and hope for thebest?
You've got somebody coming toyou and you're like I want to
list my house, please.
The thing is, I'm building withKelly.
Kelly's a home builder.
I'm building with Kelly.
I don't know when to list myhouse.
What would you suggest?
Speaker 5 (13:38):
You have to determine how much time your typical
market takes in that city, in mycase, to sell.
Boom.
Now, I generally plan on about,I generally plan on about two
months.
But okay, I'm into the cash cpowhere they, where we can give
them up to like 90 days.
You can start that a littlemore in advance, because the
other thing that ties into thattoo is somewhere along the line
some builders are moreaggressive than others where
(13:59):
they want you to remove thecontingency to sell your house.
Yes, and you're always in a.
You're always running in abackup position because anybody
can come in behind you and putan opera on that new bill that
you're doing with your style,your personality, your love of
cabinets, your love ofeverything, and somebody can
come take that out fromunderneath you because you may
not be able to get thatcontingency off and that's going
(14:21):
to be they may.
You're're going to lose, you'regoing to go hard on your
deposits.
Within two weeks you're goingto have a 60-day time frame,
either at the beginning ortowards the end, to take your
contingency off, and it may besooner rather than later.
And most builds are going totake.
I've never had a build takeless than nine months.
Speaker 2 (14:39):
There's no way so, kelly, everything involved,
kelly, now do we think he'sgoing to do really well with
this program?
So, guys, you lose your deposit, right?
People haven't been concernedabout this because two, three
years ago, four years ago, whenthey made plans to build a new
house, because that's how, howlong these plans.
Some people have 10 yearsbefore they build a new house,
(14:59):
right, but they've always wantedto build a new house.
They're finally building a newhouse.
These plans have been thereforever and guess what?
Houses are selling at a click.
Right, two years ago, most of uswere 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, theepisodes that we've done about
Clermont-Juglar and how themarket is flattening Three and
(15:20):
three and a half to five and ahalf years.
I think it's already flattened.
Two years ago, almost everymarket in the country crested.
Two years ago.
Right, we've got three, four,five years down to the bottom.
Is it going to take longer andis it going to be harder to sell
houses based on that for thenext three to five years?
(15:41):
Put your thumbs up if you thinkit's going to be harder.
Put your thumbs up if you thinkit's going to be harder.
Put your thumbs up.
If you think it's going to beeasier.
Based on the fact we know we'regoing into a recessionary
period for the next three tofive years, are houses going to
sit longer or are houses goingto sell faster?
Are we going to go back to themultiple offers that we had two
years ago, based on the factthat we're in a recessionary
(16:01):
period?
I just want thumbs up or thumbsdown.
Which one Do we think housesare going to sit for longer?
Put your thumb up.
Do we think houses are going tosell faster in the recessionary
period coming up?
Put your thumb up.
Let me give you a stat on that.
Builders, for the last twoyears a year and a half have
been cancelling two to threetimes more contracts than they
(16:23):
were when we were gettingmultiple offers.
Does anybody see that as a signof anything?
And let me ask it a differentway Put your thumb up if you
think it's pretty likely.
Based on history, we're goinginto a recessionary period.
Okay, now we're cooking withgas.
In a recessionary period,houses take longer to sell, even
with everything else going on.
(16:44):
It's just fact, which meansthat and we're already seeing it
with builders.
Builders are cancellingcontracts at over two times what
they were a couple of years ago.
That means you've got a veryreceptive audience with builders
.
Do you think builders likecancelling the contract?
Of course not.
Do you like cancelling alisting contract or a sales
(17:05):
contract?
Of course not.
That's what it is for thebuilder.
The builder does not want tocancel that contract.
You have a tool, the builder'sCPO, right.
You have a program whereby youcan say Mr Builder, you don't
have to cancel, we can get you.
We can get them the majority oftheir money in 14 days.
(17:25):
What's more, two thirds of themare going to go make more money
than with conventional homesale and the reason for that is
because we go in and we do adeep clean to a full remodel.
They don't have to be in thehouse, we can.
They can get the majority oftheir equity close on your home.
Anybody think about the criticaldate that comes up in a builder
(17:46):
CPO.
So the builder's now buildingthe home.
Before we were talking aboutmaterial delays, labor shortages
, weather, difficult to builders, and now, of course, we've got
ICE going in, taking a bunch oftheir 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
(18:07):
saying they're going to close onJuly 4th.
We've already establishedprobably 5% of the time they'll
hit that date.
When do they know the date?
What is the turning point inthe builder trajectory?
I'll give you a clue.
It happens about a couple ofweeks before the new homeowners
can move in.
What is it that the buildergoes to get CO?
(18:30):
There comes Kelly again.
How are you so well versed inthis, kelly?
So you get a CO right, that'scalled a certificate of
occupancy.
Most of you, I hope, havelisted new construction homes so
you'll know it's a CO.
Two weeks before it's completethey request the CO.
In most markets you can requestthe CO two weeks before you're
(18:54):
due to get it, or it's probablyeven four weeks before.
Right, because the inspectorshave got to come out.
You're really requesting it todovetail how long it takes your
inspectors to come out.
Most of that time we canpinpoint those 14 days.
Why is that important, kelly?
What percentage of the builderscan give you a date two weeks
before you're supposed to move,ie the co date?
(19:16):
probably 95 95 it flips right,we go from 95, can't give you if
it seesaw flips, only fivepercent aren't going to hit the
date because something comes upat that.
So 95 of the time you, as theagent, the builder, can say, hey
, agent, you know I gave you uh,bob and sally to work with.
(19:38):
It's time for them to pressthat button.
Do you want to follow up withthem or do you want me to?
Does that sound compelling foryou for an offer to a builder?
Do you think most builderswould understand this or not?
When you go and meet with themand you go with your builder cpo
mug or flyer or whatever it isyou take as your giveaway, or we
have the flyers all built withthe bullet points on, would it
(20:00):
be compelling?
You're going to go and see 20,30 builders, however many you've
got locally, especially yourbuilders who are custom, because
most of them just cycle throughdifferent agents.
And remember, you're not goingas a real estate agent, just
like senior living, seniorliving, you're not going as a
real estate agent, you're goingas a senior living, cpo expert.
So now you're going as abuilder CPO expert to see the
(20:22):
builders.
Thumbs up if you think you getmore business.
If you go meet with 20 builders, okay, thumbs down if you think
you'll get less business andit's a complete waste of time.
If you go meet with builders,we've got the system to get you
the appointment right andthey're going to give you
referrals.
Guys, not only that, out ofthat 20 that you go and meet, do
you think you might pick one upthat's just starting to build a
new home and they think you'reso amazing that they're going to
(20:45):
give you that listing?
How many times do you thinkthat's going to happen?
At least once.
Right, that's what you're doingwith the builders, essentially.
Right, you're bringing them aprogram 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 pressthat button 14 days out.
(21:06):
So back in the day and this wasreally at the bottom of the
market, by the way I represented12 different developments.
I'd been an agent for maybe twoyears at that point.
How do you think I got thosedevelopments?
I hadn't written the book yet.
I probably didn't even have.
I may have had the radio show.
What I had is all the programsthat are in Find your Unique
Value Proposition.
(21:27):
Go read them.
I've got something different.
You get to steal all thedifferent.
All the programs are in Findyour Unique Value Proposition.
It's on the app.
The whole book is on the app infive minute bite size pieces.
It's all there for you, right?
So I would suggest that you alllook at your listing
presentation.
(21:47):
Little tip all those programsthat are in the book are in the
listing presentation that youall have.
The listing presentation alsohas in it the three options the
conventional sale, the certifiedpre-owned sale and the cash CPO
sale.
Three options Give your sellersoptions.
You're a consultant.
This will change your listings.
(22:09):
It will change your listings.
Success leaves clues.
All you've got to do is go doit.
When I say all you've got to dois go do it, I mean go meet the
builders, go meet thecommunities.
That's what happens when you goand see the builders.
The builder now knows you.
You're going to put the builderin your phone with builder next
to them, right?
You want a builder?
You've got them on speed dial.
(22:30):
If you want, you can put fourof them in a text message group
and go hey, I've got a clientthat wants to build a house.
They've only got 350.
Do any of you have any programsfor that?
Hey, I've got a client wants tobuild a $3 million house but
they need it built by July.
Do any of you have programs forthat?
There's all kinds of things youcan do with it.
You've got them on speed dial.
How many builders you've got onspeed dial?
How many builders you got onspeed dial right now?
(22:51):
Probably not that many.
Do we have enough homes rightnow for the market?
Okay, Put your thumb up if youthink we have enough homes.
If you look at the stats onthat, you may be saying that.
Whomever it was that put thethumb up for that because you're
seeing houses sit longer.
Put your thumb up again, if I'mright on that.
(23:12):
Like, what's making you thinkthere's enough houses out there
for people?
Is it because your market hasslowed down and houses are
taking longer to sell?
Let's try the other way around.
Who thinks there's a deficit ofhouses?
Is everybody crying out forbuilders to build more houses
because there's not enoughhouses for the people who want
to buy a home?
(23:32):
That's the true fact.
Why are builders not building?
Why are builders slowing down?
More regulation by thegovernment, more regulation Is
regulation with the currentpresident?
Is regulation going up or goingdown.
Put your thumb down if youthink it's going down.
Your thumb up if it's going up.
Regulation, you thinkregulation is going up.
Speaker 6 (23:53):
Kelly, they're trying to make it go down?
Speaker 2 (23:58):
Yeah, they're trying, they're talking, but they
haven't Right, but look atwhat's happening, especially in
areas like Joey's area.
Joey, are regulations going upin LA or going down from what
they were?
Speaker 4 (24:11):
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 (24:20):
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 italready, of course I forgot.
Speaker 4 (24:27):
I forgot it's.
It's a lot, it's a lot.
Speaker 2 (24:30):
It's thousands, so thousands of homes, thousands so
they're stripping, they'reputting requirements to strip a
lot.
It's a lot, it's thousands.
So thousands of homes, yeah,thousands.
So they're stripping.
They're putting requirements tostrip a lot of regulation.
So it used to take two andthree years to get permits in
where Joey lives.
How crazy is that?
Right?
So all the mayors are gettingtogether.
They're having round tables onthis.
That's happening all over thecountry, by the way.
The regulations there's a bigpush to remove regulations on
(25:02):
building.
What about interest rates?
Is that putting builders off?
What about the fact thatbuilders are being told we're
going into a recessionary period?
Good old Clément Juglarfollowers or any CPA ever.
By the way, don't listen toreal estate agents they're about
.
Is the market great?
Sure, the market's great.
Great for whom?
It's not a bad market becausewe're going into a recession.
That's the other thing to learn.
It's not a bad market at all.
(25:22):
It's freaking fantastic forinvestors and buyers.
Right, I've been priced out ofthe market.
A market correction isfantastic for investors and
buyers.
And, by the way, don't youthink that would be good for
your seller that's probablybuying a new house?
Don't you think it's amazingright now for a home seller?
Because they're still gettingto sell at pretty much the top
if they get out now.
What are you hearing there?
(25:42):
Urgency, right.
So the builders are still in arelatively good situation.
However, as the market isdeclining remember you don't
build a house tomorrow.
It takes you six months, right?
Or nine months, kelly's sayingin his market.
I think you're saying ninemonths, kelly.
In our market in Asheville it's18 months to build a house.
(26:04):
Don't ask me why.
Maybe it's permits, maybe it'sthe mountains.
You know the land isn't flat.
Yada, yada, yada.
18 freaking months.
Does the average builder knowwhat's going to Wait?
Average agent builder, anyone,a average senator, know what's
going to happen in the market in18 months?
Who thinks that builders don'tknow and a little nervous about
where the market's going to bein 18 months?
Remember most people have tosell the houses to buy their new
(26:26):
house.
Put your thumbs up if you thinkbuilders are a little nervous.
Do you think this is flippingprime time right now to go and
meet with builders?
Speaker 6 (26:35):
Yeah, I was going to tell you the builders are
nervous a little bit.
There's always uncertainty init.
But guess what?
They're not going to shut downtheir businesses just because of
it.
They have to make adjustments.
You don't see builders justshutting down.
Perry Holmes, dr Horton, allthese guys.
They're not just going to closeup shop and leave.
Houses are always going to bein demand.
My opinion is we're never goingto meet the demand that people
(27:01):
want.
Home building is always goingon as long as there's water to
support the space.
Speaker 2 (27:06):
You just said something killer there, kelly.
You said builders have and thisis big time for Joey.
You said builders have and thisis big time for Joey builders
have to make adjustments.
Do you think one key adjustmentmight 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 arecanceling more contracts.
(27:28):
They want to get the contractout, guys, so they can resell a
spec home, and even the spechomes 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 brandnew homes, gorgeous.
It's happening everywhere.
So do you think that thebuilder CPO might be an amazing
adjustment?
What do you think?
Speaker 4 (27:50):
A hundred percent.
Speaker 6 (27:52):
It's going to take uncertainty off of their plate
on a lot of options.
Yeah, john Carson, I live inFalmouth, massachusetts, which
is on Cape Cod Fantastic.
Speaker 2 (28:03):
So, joey, I'd like to go over to you.
Where are you at and where areyou helping people?
Speaker 4 (28:10):
Thanks, ro.
I'm here in California.
We're here in Los Angeles, tobe exact.
So, like you've mentionedearlier, when the market is slow
, it doesn't mean that we haveto slow down.
It's the best time for us toplant the seeds right now and
eventually, when the marketpicks up, it's the best way for
us to harvest.
It's harvest time is going tocome, for sure.
Yeah, so we just have to focus,and building relationship with
(28:34):
the builders is the best time todo at this point.
Speaker 2 (28:37):
Absolutely, and anybody listening today can go
and get their cash offer atcashcpocom.
That's cashcpocom.
Put your address in.
We're not going to bug you.
We're not going to force you tosell your house.
It's a great way to get yourfull market value cash offer.
Guess what?
It also gives you a house value.
That's way better than any ofthis automated nonsense, because
(29:00):
it's not as good as a realperson looking at it, and that's
what we'll do for you.
Chris, would you like to saywhere you are?
Speaker 7 (29:07):
I'm in the Bradenton, Sarasota area of Florida.
Speaker 2 (29:13):
I work with the senior communities and also just
traditional listings and buyersAwesome, we've got Kelly Denny
in Utah who is out there helpingbuyers and sellers.
Little inundated right now withhelping seniors Kelly.
Speaker 6 (29:31):
Yes.
Speaker 2 (29:31):
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 somequestions.
Welcome to the show, samantha.
Speaker 8 (29:45):
Hi Ro, Thanks for having me.
My husband and I are buildingour dream home and it's supposed
to be done in about four months, but we still haven't listed
our current home yet becausewe're scared it'll sell too
quickly and we'll be stuckwithout a place to live for
months.
How would Builder CPO help us?
Speaker 2 (30:00):
Great question, samantha.
With Builder CPO, you don'thave to list your home
prematurely.
Instead, you can lock in anoffer on your home but wait to
press the button until you needthe funds.
This way, you stay in yourcurrent home without stress and
when you're ready, you get yourequity in 14 days to complete
your new home purchase.
Speaker 8 (30:19):
Oh, wow.
That's amazing.
But what if the market shiftsin four months?
Could I still get a fair pricefor my current home?
Speaker 2 (30:27):
Absolutely.
We know markets can change, sothe offer is structured to be
competitive and fair, based onreal-time market conditions.
Plus, you're not locked inuntil you choose to activate the
sale.
Speaker 8 (30:41):
That makes sense.
Another thing I'm worried aboutis our builder pushing the
closing date back.
What happens if I press thebutton and then my new home
isn't ready in time?
Speaker 2 (30:50):
That's a common concern With Builder CPO.
You have flexibility.
You can set up a leasebackoption, meaning you can stay in
your home for a short periodeven after closing, giving you
breathing room in case of delays.
You can stay up to 90 days andeven longer, on a case-by-case
basis.
Speaker 8 (31:08):
That's a game changer .
I think we'll be looking intothis.
Thanks, Ro.
Speaker 2 (31:13):
You're so welcome, Samantha, and that's exactly why
this program exists to take thestress out of this process.
Welcome back to Real EstateNews Radio.
I'm Rowena Patton, and todaywe're diving into the world of
new home construction what'shappening with builders,
mortgage rates, material costsand buyer demand.
If you're thinking about buyinga new home or you're in the
(31:35):
building industry, this is amust listen.
Joining me today is Mark, aseasoned home builder, and Sarah
, a home buyer, who'sconsidering new construction.
Mark, let's start with you.
What are you seeing in theindustry right now?
Speaker 9 (31:50):
Hey, Ro, thanks for having me.
Well, it's been an interestingtime for builders.
Right now, total housing startsare at about 1.36 million,
which is actually down almost 4%from last year.
But there's a twist Singlefamily homes are up by about
6.5%, while multifamily startshave really slowed down.
So builders are still movingforward, but we're being much
(32:12):
more strategic about what andwhere we build.
Speaker 7 (32:15):
That's surprising, because I keep hearing there's a
housing shortage.
Why would builders slow down ifwe need more homes?
Speaker 2 (32:21):
Great question, Sarah .
The US is actually facing ahousing shortage of between 4
and 7 million homes, so you'dthink builders would be going
full speed ahead.
The issue is that high interestrates and rising costs have
made it harder for buyers toafford new homes, and that
affects builders.
That's why we're seeing fewermultifamily projects and more
(32:43):
focus on smaller, affordablesingle-family homes.
The median size of new homeshas dropped to 1,791 square feet
, down from almost 2,000 squarefeet just a few years ago.
Builders are adjusting to whatbuyers can afford.
Speaker 9 (33:03):
Exactly Ro, and it's not just home sizes.
Townhomes are becoming a biggerpart of the market.
Right now, about 17% ofsingle-family homes being built
are townhomes, compared to just10% a decade ago.
They're more affordable,require less land and can be
built faster, so they're a goodoption for buyers looking for
something new but morebudget-friendly.
Speaker 7 (33:25):
I've actually looked at townhomes because
single-family homes feel out ofreach.
But I've also heard thatbuilders are raising prices.
Are prices still going up orare they stabilizing?
Speaker 2 (33:36):
It depends.
We've actually seen median homeprices level out a bit down,
about 6.8% from their peak, butbuilders still have to cover
rising costs.
The big problem is tariffs andmaterial shortages.
Tariffs and material shortagesFor example tariffs on steel,
(33:57):
aluminum and even Canadianlumber have added $7,500 to
$10,000 to the cost of buildingan average home.
And labor shortages aren'thelping either.
Builders are paying more to getskilled workers, which drives
up costs.
Speaker 9 (34:10):
Yep, those costs really add up.
And here's another factorBuilders are having to offer
more incentives to get buyersinto homes.
A lot of builders are offeringthings like rate buy-downs,
paying closing costs or addingupgrades just to make it easier
for buyers to afford a home.
Speaker 7 (34:25):
That's good to know, because interest rates are
what's scaring me the most.
If I buy now, am I stuck with ahigh mortgage rate?
Speaker 2 (34:33):
If I buy now, am I stuck with a high mortgage rate?
Not necessarily.
Right now.
The average 30-year mortgagerate is around 6.65%, which is
high compared to a few years ago.
But many builders are workingwith lenders to offer temporary
rate buy-downs, meaning they'llcover part of your mortgage cost
for the first few years to keepyour payments lower.
When we sit down, we'll look atyour situation from all the
(34:55):
angles and look at what isavailable to you at that time.
That's my job.
Speaker 9 (35:00):
That's been a huge help for us, Ro.
If buyers are worried aboutrates, we say buy the home,
refinance later, because rateswon't stay high forever, but
home prices probably aren'tcoming down much more either.
Speaker 7 (35:12):
Okay, that makes sense, but I've also heard that
some builders are delayingprojects.
Are new homes taking longer tobuild?
Speaker 2 (35:21):
That's another great question.
On average, new homeconstruction takes about 7.3
months from start to finish, butwith labor shortages and supply
chain delays, it's been closerto eight or nine months.
In many areas.
Builders are trying to speedthings up, but delays can still
happen, especially when gettingpermits or inspections, which
vary by location.
(35:41):
In the mountains of WesternNorth 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 tookhim a few months to build.
He is the exception.
Speaker 9 (35:55):
That's why buyers need a backup plan.
I always tell buyers to have alittle flexibility, because even
with the best scheduling,delays happen.
But one way to take the stressout of the process is programs
like Builder CPO that letsbuyers access their home equity
within 14 days so they don't getstuck waiting for their old
home to sell before moving intothe new one.
Speaker 7 (36:14):
I was actually going to ask about that.
My biggest fear is selling myhome too early and not having a
place to live, or waiting toolong and losing my new build.
So Builder CPO helps with that.
Speaker 2 (36:27):
Exactly.
Here's how it works you securean offer on your current home
through Builder CPOpo and whenyou're ready, you press the
button to access your equitywithin 14 days.
That way, you have the moneyyou need for your down payment
and closing costs without thestress of timing your home sale
perfectly.
Once you move into your, youknow your new build home with
(36:48):
the majority of your equity.
We go to work on your old homeand do any cleanup necessary to
get your top dollar and then,when it sells, you get another
check.
Two-thirds of our sellersactually make more than with a
conventional listing and you'vegot the convenience of not
worrying about when your newhome might be ready.
That's actually really smart.
Speaker 7 (37:07):
I know someone who had to back out of a new
construction deal because theirhome didn't sell in time and
they lost their deposit.
Speaker 9 (37:13):
It happens all the time, but Builder CPO prevents
that by making sure buyers canmove forward without the
uncertainty of waiting on themarket.
Honestly, it makes me mad thatpeople are putting their
deposits in jeopardy.
There's no need when we havethis.
Speaker 2 (37:27):
Exactly, and the best part is buyers still keep the
upside if their home sells formore than expected, so it's a
win-win.
Speaker 7 (37:35):
I love that it seems like builders are really
adapting to the market.
Speaker 2 (37:40):
They are, and buyers should know that, even though
the market is shifting, thereare still great opportunities to
buy a new home.
With the right incentives,financing options and programs
like BuilderCPO, it's possibleto make the move without
unnecessary stress.
Speaker 9 (37:56):
Absolutely Ro, and for any buyers out there
thinking about new construction,talk to your builder about the
incentives and financingprograms available.
You might be surprised atwhat's being offered.
Speaker 7 (38:05):
This has been super helpful.
I was hesitant about newconstruction, but now I feel
like I have more options than Irealized.
Speaker 2 (38:13):
That's why we do this show.
If you're considering a newbuild, talk to your builder,
explore your financing optionsand check out BuilderCPOcom for
more details on how to make yourmove stress-free.
Welcome back to Real EstateNews Radio.
I'm Rowena Patton and we'recontinuing our deep dive into
new home construction.
(38:34):
We've covered how naturaldisasters are reshaping building
strategies across the country,but what about the challenges
that everyday buyers andbuilders are facing right now?
Today we are talking to James.
He's been in the middle ofbuilding his dream home and,
like so many others, he's hitsome unexpected roadblocks.
(38:54):
James, welcome to the show.
Speaker 10 (38:57):
Hey, Ro, thanks for having me.
I've been listening to the showfor years, but now I'm living
it.
My wife and I started buildinga home outside of Nashville and
we thought we had it all plannedout, but now, between material
shortages, delays and priceincreases, we're feeling a
little stuck.
I wanted to see if you had anyadvice for buyers in our
position.
Speaker 2 (39:18):
Oh, james, you are not alone.
Builders and buyers across thecountry are facing similar
struggles.
Let's start with the big onedelays.
What's the biggest holdup onyour home?
Speaker 10 (39:29):
Well, at first everything was on track, but
then our builder told us thatwindows and appliances were
going to take way longer thanexpected.
Our move-in date keeps gettingpushed back, and now we're
scrambling to figure out if weneed to extend our lease or
crash with family.
Speaker 2 (39:44):
This is one of the biggest frustrations right now.
The supply chain disruptionsthat started a few years ago are
still affecting home buildingtoday.
Windows, garage doors, hvacsystems and even basic
electrical components can causemajor slowdowns.
Nationally, we've seen leadtimes for windows stretch from
(40:05):
four weeks to 16 weeks.
In some cases that's threeextra months of waiting.
Speaker 10 (40:11):
That sounds about right.
What can we do?
We're worried that if we don'tget into our homes soon,
interest rates might go up againand then our monthly payments
will be even higher.
Speaker 2 (40:22):
A valid concern.
One option is to talk to yourbuilder about material
substitutions.
Some builders have been able toget homes finished faster by
using alternative window brands,adjusting appliance packages or
tweaking floor plans toaccommodate what's available
sooner.
Have you asked about anyworkarounds?
Speaker 10 (40:42):
Yeah, we asked, but they said it might cost more and
honestly, with prices going upeverywhere, we don't want to add
to our budget.
Speaker 2 (40:50):
Understandable.
Here's the good news.
Some builders are offeringprice protection guarantees.
They lock in your price atcontract signing, even if there
are delays.
Have you checked if yourbuilder offers this?
Speaker 10 (41:02):
I haven't, but I will now.
What about interest rates?
If we get delayed and rates goup, we could end up paying a lot
more than we originally planned.
Speaker 2 (41:10):
That's where rate locks come in.
Some lenders offer extendedrate locks for new construction,
usually between 6 to 12 months.
This lets you secure your ratetoday and protect yourself from
increases.
Some even allow a one-time ratereduction if rates go down.
Before you close, definitelycheck with your lender on that.
Speaker 10 (41:31):
Okay, that would be a huge relief.
Another thing I wanted to askabout is hidden costs.
We budgeted carefully, but nowwe're seeing all these extra
charges, permits, impact fees,even higher costs for lumber
than we expected.
We feel like we're gettingnickel and dimed.
Is this normal?
Speaker 2 (41:50):
Unfortunately, yes, construction costs have been
fluctuating and many cities haveincreased permit and impact
fees.
Some areas have seen impactfees jump by 20% in the last
year alone.
Your best bet is to have yourbuilder give you a detailed
breakdown of every cost so thereare no surprises.
(42:10):
Also, look at your contract.
Some builders includeescalation clauses which allow
them to pass certain costincreases on to you.
If you have one of those, youmay need to negotiate.
Speaker 10 (42:23):
I'll have to double check our contract.
So do you think it's stillworth building right now, or
should we have just bought anexisting home?
Speaker 2 (42:30):
That's the million dollar question.
Here's the thing Buying anexisting home right now isn't
necessarily easier.
Inventory is still historicallylow, meaning you'd likely be
still dealing with high mortgagerates.
New construction lets you avoidthose bidding wars.
Customize your home and benefitfrom builder incentives like
(42:52):
closing cost assistance or ratebuy-downs.
And after all, building yourfirst new home has been a dream
for two decades.
Speaker 10 (43:01):
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 (43:09):
Historically new construction homes appreciate
well because they require fewerrepairs and are built to the
latest energy and safetystandards.
Right now, with the housingshortage still looming, demand
for well-built homes is likelyto remain strong.
If you're in a growing arealike Nashville, where companies
are expanding and people arerelocating, you're in a good
(43:32):
spot for long-term value.
Speaker 10 (43:34):
That's a relief.
One last thing If you were inour shoes, what's the best move
to get through this processsmoothly?
Speaker 2 (43:42):
James, if I were in your shoes, I'd do three things
Lock in your interest rate ASAPto protect against future hikes.
Push your builder for a cleartimeline and explore material
substitutions to keep thingsmoving.
Budget for unexpected costs anddelays.
A buffer of 5 to 10% can make ahuge difference in reducing
(44:05):
stress.
If you can stay flexible andproactive, you'll get through
this and before you know it,you'll be holding the keys to
your brand new home that youhave dreamed about since your
30s.
Speaker 10 (44:17):
That's exactly what I needed to hear.
Thanks so much, Ro.
We'll keep pushing forward andhopefully be in our house soon.
Speaker 2 (44:25):
You've got this, james, and for anyone listening
who's in the same boat, remembernew construction has its
challenges, but with the rightplanning and patience, it's one
of the best ways to get the homeyou truly want.
Now that we've heard from Jamesand his experience with
building a new home, I want totake a few minutes to talk about
the bigger picture.
(44:46):
If you're thinking about newconstruction, or you're a
builder trying to adjust totoday's market, what do you need
to know?
Let's break it down First.
Let's talk about the long-termoutlook for new home
construction.
Right now, even though housingstarts have dipped in some areas
, demand for new homes isn'tgoing anywhere.
The US is still short between 4and 7 million homes, meaning
(45:11):
builders will be playingcatch-up for years.
Even if the market feels alittle uncertain today,
long-term trends point to steadygrowth in new home construction
, especially in areas seeingstrong population growth like
Texas, florida and NorthCarolina.
That brings me to a keyquestion I hear all the time
Should I buy a new home now orwait?
(45:31):
And the answer depends on yoursituation.
If you're renting and waitingfor prices to drop, keep in mind
that even if home prices softenslightly, mortgage rates could
rise again, making homes just asexpensive, or even more
expensive, on a monthly basis.
What's more, if you're rentingand thinking about buying, I
want you to take your rent andmultiply by the time you might
(45:53):
wait.
For example, the average rentwill cost over $90,000 over
three years, and that money ispaying someone else's mortgage.
Even if the worst case scenariohappens and you did buy and
there was a drop in value,$90,000 is a pretty big cushion.
What's more, you have thefreedom of owning your own home
(46:14):
and all that goes with that.
And if you're worried aboutrates, remember that some
builders are offering rate buydowns, where they help lower
your interest rate for the firstfew years.
That's a huge opportunity forbuyers who are concerned about
affordability.
If you can lock in a lower ratetoday and refinance later when
rates drop, you could save tensof thousands of dollars over the
(46:35):
life of your loan.
Now let's talk about anotherissue in new construction that
isn't getting enough attentionpermitting and regulation delays
and, depending on where you'rebuilding, it can take months
just to get permits approved.
Some cities are faster thanothers, but in places like
California, the strict zoninglaws and environmental reviews
(46:57):
have slowed down constructionsignificantly.
In contrast, states like Texashave streamlined their building
processes, making it easier fornew homes to go up quickly.
What does this mean for buyers?
If you're building in an areawith a longer permitting process
, expect delays beforeconstruction even starts.
(47:18):
Builders are doing their bestto push things through, but this
is a reality in many markets.
If you're in a time crunch, youmay want to consider a spec
home, that's, a home that'salready under construction or
near completion.
Spec homes let you move in muchfaster than a custom build, and
often come with builderincentives.
(47:38):
Another important trend in newconstruction 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 floorplans.
More and more builders areintegrating solar panels, smart
thermostats and high-efficiencyHVAC systems.
That can save homeownersthousands in utility bills over
(48:00):
the years.
Some builders even offer energyefficiency guarantees, meaning
they'll estimate your monthlyenergy costs before you even
move in.
If energy efficiency isimportant to you, be sure to ask
about these features beforesigning a contract.
And here's something for my realestate investors out there New
construction can be a greatlong-term play.
(48:22):
If you're thinking about buyingan investment property, look at
areas where new developmentsare happening.
Many investors focus only onexisting homes, but new builds
can offer lower maintenancecosts, strong rental demand and
tax benefits that make them asmart choice.
Plus, in high growth areas,being an early buyer in a new
(48:43):
development could mean majorappreciation over time.
As an extra note for myinvestors out there around the
USA and in Canada, we justlaunched another new program,
the Flip CPO, which is designedto help investors buy a home
with just 10% down and no creditscore requirements Just a
necessity to be able to affordthe down payment, and you show
(49:04):
this through proof of funds.
Our funding partner upfrontsthe money for repairs and
improvements and the buyer isalso required to take a 10%
share in the repairs andimprovements.
The home is then listed and,after the funding partner's fee,
the investor gets the profits.
So what's the bottom line here?
The new construction market isshifting, but opportunities are
(49:27):
still out there.
Builders are adapting, withincentives, smarter designs and
more flexible financing options.
Buyers just need to bestrategic, shop around for the
best incentives, plan forpotential delays and think about
long-term value when making adecision.
At the end of the day, whetheryou're buying, selling or
(49:49):
building, it's all about beinginformed the more you understand
the market of the day.
Whether you're buying, sellingor building, it's all about
being informed.
The more you understand themarket, the better decisions
you'll make, and that's whywe're here to give you the
knowledge you need to navigatethis ever-changing real estate
landscape.
Spring is just around the cornerand with it comes the bustling
real estate season.
Many sellers believe thatwaiting for the trees to bloom
(50:12):
and the grass to green will maketheir homes more appealing.
However, this year presents aunique scenario that might make
you reconsider that strategy.
Traditionally, spring sees asurge in home listings, as
sellers aim to capitalize on thepleasant weather and heightened
buyer interest.
On the pleasant weather andheightened buyer interest, this
(50:34):
year, forecasts suggest an evenmore pronounced increase in
inventory.
For instance, in Florida, over360,000 single-family homes came
onto the market in 2024,marking a 9.5% increase compared
to 2023.
This trend is expected tocontinue, leading to a more
competitive market for sellers.
Let's consider the advantages oflisting now.
(50:55):
Listing your home before thespring rush can provide
significant benefits.
With fewer properties available, your home is more likely to
stand out to serious buyers.
Additionally, buyers who areactive during this period are
often motivated and ready tomake swift decisions, reducing
the time your property spends onthe market.
(51:16):
How about dispelling seasonalmyths?
A common misconception is thathomes show better when trees are
full and flowers are in bloom.
While curb appeal is important,serious buyers focus on the
property's fundamentalsstructure, layout and location
regardless of the season.
Moreover, listing in latewinter allows buyers to envision
(51:39):
the property without thedistraction of lush foliage,
providing a clear view of thehome's exterior and land.
What about current marketdynamics?
Recent data indicates that thehousing market is experiencing
shifts that could favour earlysellers.
Mortgage rates have fallen totheir lowest levels since
(52:00):
December, increasing buyers'purchasing power and motivation.
However, with the anticipatedinflux of listings in the coming
months, this window of reducedcompetition may be small.
While waiting for spring's fullbloom might seem advantageous,
the current market conditionssuggest otherwise.
By listing your home now, youcan leverage the lower
(52:21):
competition, attract seriousbuyers and potentially secure a
quicker and more favourable sale.
Remember, motivated buyers arelooking year round and the
absence of leaves on trees won'tdeter them from finding their
perfect home.
Thank you so much, guys.
It's always such a pleasure tobe with you on a Saturday.
(52:43):
Or, if you're listening to thepodcast, it could be years time,
who knows, be interesting tolook back at the facts and
figures that we always collecton these a year, two years or 10
years, or it could even bedecades later.
You know, the world of podcastsand our radio shows are
relatively new, obviously, so itwould be very, very interesting
(53:04):
to look back, wouldn't it?
Thanks again, guys.
Love the fact that so many ofyou 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.
(53:25):
We have people standing by.
They will take a message, getit right through to us and I'll
see you on the radio next week.
Speaker 1 (53:34):
This has been the Plain English Real Estate Show
with Rowena Patton.
Visit Rowena and post yourquestions at radioashvillecom or
call her at 828-210-1648.
This is the Plain English Real Estate Show with
your host, rowena Patton, a showthat focuses on the real estate
market in terms you can easilyunderstand.
Call Rowena now.
The number is 240-9962 or1-800-570-9962.
Now here's the English girl inthe mountains, the agent that I
(00:20):
would trust, rowena Patton.
Speaker 2 (00:22):
Hello and welcome to Real Estate News Radio.
I'm Rowena Patton, your trustedfriend in real estate, here to
help you build and manage wealththrough smart real estate
decisions, including buying,selling, remodeling and
financing.
Today we're diving intoBuilderCPOcom, a game changer
for new home buyers and buildersalike.
One of the biggest challengesbuyers face is timing their home
(00:45):
sale while juggling a new build.
With Builder CPO, we take thestress out of the equation by
unlocking the equity from theirexisting home within just 14
days of pressing the button.
And for builders, this meansgreater certainty, since most
know with 95% accuracy when ahome will be ready within two
(01:06):
weeks of completion.
It's a win-win that keeps dealsmoving and dreams on track.
We have a question from John,who works for a home builder.
Hi, John, and welcome to theshow.
Speaker 3 (01:17):
Hi Ro and thanks for having me on.
I'm observing a decline in newhome builds across the USA.
Observing a decline in new homebuilds across the USA In 2023,
there were approximately 1.5million housing starts, down
8.54% from the previous year.
I believe this trend isinfluenced by rising interest
rates and economic uncertaintiesaffecting builder confidence.
What are your thoughts on thissituation?
Speaker 2 (01:39):
You're absolutely right, john.
Elevated mortgage rates, whichhave hovered around 7%, have
dampened demand, leadingbuilders to adopt a more
cautious approach.
Additionally, recent tariffs onessential building materials
like steel and aluminum haveincreased construction costs,
further impacting the pace ofnew developments.
(02:01):
However, forecasts suggest apotential rebound, with new home
construction expected to reachabout 1.1 million units in 2025,
a 13.8% increase from 2024.
This anticipated growth couldhelp alleviate some of the
current housing shortages andstabilize the market.
(02:22):
2017 also saw the launch of thefull market value cash offer
that powers our builder CPOprogram.
The ability for the home buyerto get up to 70% of equity 14
days before they close on theirnew build home, and then a
second check once we clean uptheir old home, means that they
can close with a lot more ease,as they can press the big red
(02:45):
button for the closing 14 daysout from the closing.
95% of builders know, 14 daysout from requesting their CO,
that they can close on time.
This flips from 95% of buildersbeing uncertain about the
closing date beforehand.
Sorry for the long answer andjust to clarify for our
(03:06):
listeners CO, short forCertificate of Occupancy, is the
final approval that buildersreceive before new owners can
officially move into their home.
Speaker 3 (03:18):
Thanks for that, ro.
I'll definitely be looking intobuilder CPO.
Just last week we had a buyercancel their new home build and
lose their deposit because theycouldn't sell their existing
home in time.
They were expecting multipleoffers, still operating with the
mindset of a few years agowithout realizing how much the
market has flattened.
(03:38):
I'm going to reach out to themand see if this program could be
a solution for them.
Speaker 2 (03:43):
That's great, john.
Give us a call at 828-333-4483.
That's 828-333-4483.
We can help you around thecountry and you can call 24-7.
We can help builders and newhome buyers everywhere in the
country with this program and,of course, now we can help home
(04:05):
sellers and buyers everywheretoo, with my amazing, highly
trained partners around thecountry.
If we run high level solutionslike this, imagine what we do
when we are selling aconventional home listing.
Give us a call to get started,even just dipping your toe in at
828-333-4483, whether you areselling your home, second home
(04:25):
or building a new one.
Welcome back to the show.
If you've just tuned in, maybeyou just got in your car on a
Saturday morning.
Grab a coffee, take this in.
We're talking about building anew home which, let's face it,
most of us have had a dreamabout for a long time, and some
of us have been fortunate enoughto actually build our new home.
(04:47):
Talking about the crazy goodagents in our network, I want to
pull back the green curtain.
We're going to Oz today to justshare with you a class that we
did last week.
We do these three times a weekfor our agents.
We all get on and learntogether.
I learn so much from them and Iwant you to take a listen to
(05:10):
what we go through.
You know you don't often get asneak peek behind the scenes of
what real estate agents, who arehungry for learning, actually
do, so let's take a listen.
If your market has flattened orit'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 predictwhether there's going to be a
(05:31):
recession or not Guys, we'regoing into a recession.
Get over it already.
It's normal, right?
I was told yesterday on thewebinar to get a rant, so
apparently I'm really good withthe rant, so I'm not making any
apologies for my rant anymore.
Compared to this time two yearsago, is your market increased
(05:53):
or decreased?
So put your thumbs up.
If you feel like your markethas increased from two years ago
, put your thumbs up.
If you feel like your market isflat or decreased from two
years ago, yeah, everybody'sthumbs should be going up,
because I could go in right nowand show you the zip codes and
show you the price declines.
Right?
Is the spring coming?
Absolutely.
(06:14):
For most of us, especially ifwe're in the north, the spring
coming means more listings.
We're looking at a much biggerpicture than are there more
listings coming next month?
Right, there'll be a lot morelistings.
More listings coming next month?
Right, there'll be a lot morelistings for me coming next
month too.
A big part of why thoselistings are coming is because
what People see a recessioncoming right and they want to
get out at the height.
That's what happens inrecessions.
(06:36):
It's not bad for real estateagents at all.
All right, let's go back tobuilders, back to the builder
GPO.
So the builders are gettingcanceled contracts right now.
Why they're getting morecancellations than they've had
in eight years?
Why do you think that is?
These are people that have tosell the house to purchase their
new house.
Speaker 4 (06:57):
They have to be a contingent buyer.
Speaker 2 (06:59):
Right, because why?
What's going on with their oldhouse?
Why is the builder cancelingthe contract?
Do you think?
Speaker 4 (07:06):
They couldn't sell their existing house.
Speaker 2 (07:08):
Exactly so.
Joey and his wife and hisex-wife Deanna and his wife
Selena couldn't sell theirexisting house.
60 to 70% of people who arebuilding a new house have to
sell the house to move intotheir new build.
The others, you know, don'thave a house, they've already
sold it, or something like that.
(07:29):
As we flatten decline for thenext three to five years, right,
flatten decline means not asgood as two years ago, right?
So let's clarify what I'mtalking about.
This is perfectly normal.
What is happening?
It's designed to happen.
Clément Juglar, juglar, 1860,set it in place.
I'm doing a whole radio showabout this, by the way.
Builders are cancellingcontracts.
(07:51):
Do you think they're like that?
What do you think you might sayto a builder we can remove the
contingency.
There's kelly in utah.
Um, yes, we can remove thecontingency.
They'll go what, oh my?
So here's the funny thing.
So I do a discovery call fornew agents you've all all been
on it, I'm sure on new agents tothe program, tuesdays and
Thursdays, and now it's for thelisting engine as well and to go
(08:13):
through the listingpresentation and how you present
all of this.
So if any of you need more help, tuesdays and Thursdays at noon
EST.
So I had someone a couple ofmonths ago join who worked for,
worked for a developer and hesaid, oh gosh, I've got to get
out.
It was a one-on-one.
He said, oh, I've got to getoff the call now because I work
for a developer and I have tocancel a contract.
I'm like, wait what?
(08:34):
No, build a CPO, we can buy it.
We can have their money out intwo weeks and we can have them
smoothly go into your program.
It's all built that.
What we're doing, guys, iswe're changing this from just
any old other cash offer to whya cash offer is valuable.
We're solving a problem for ourniches.
(08:55):
We're solving a problem for ourniches CPOexpertscom forward
slash programs.
You can always find this there.
All of the programs are on here.
So here's the builder CPO.
So one of the biggest challenges, one of the biggest challenges
is hitting the move-in deadlineright.
Why do builders have problems?
(09:15):
Do you think what comes up thatcauses a builder to delay?
We've got the way for you to doit right, because we're going
to build you that list ofbuilders and, trust me, most of
the builders are going to meetwith you when you say I've got
hundreds of buyers on mydatabase.
I'm working with hundreds ofbuyers.
I'm meeting builders in thearea so I can match make you
with my buyers.
You're selling for them.
(09:35):
Why do builders not meet theirbuild time?
You'll buy a new build right Ina community or a custom home
builder, whatever it is.
It could be a $5 million newbuild and the majority of the
time you're having to sell yourhouse.
How do you know when to sellyour house?
So the builder says it's goingto be ready July 4th.
What percentage of the time doyou know?
(09:57):
Is it going to be ready July4th?
Have a guess when the buildersays it's going to be July 4th
and this is not a poke atbuilders- Greater than zero and
less than one.
I think you're right.
Honestly, maybe 5% hit it,maybe Maybe the massive home
builders.
But even the massive homebuilders why?
What happens when a port getsclosed down?
Have we seen port closures?
(10:18):
What happens with tariffs?
All of the above Builders areworried about tariffs right now.
This is an amazing group, by theway, that I learned so much
from.
And of course, then here is newconstruction.
This is just this morning.
Tara Harville is a top 1% agentin the country.
New construction pre -sale willhave a few builders that are
(10:38):
hesitant to do a pre-salebecause they don't want to price
a home that won't be completedfor six to nine months.
Do you think tariffs have gotanything to do with that?
We all know what's happeningwith tariffs, right?
Nobody's been living under arock.
Maybe you're not listening tothe news because it's so
terrifying right now.
So, besides doing a cost pluscontract, she says anybody have
a good clause that protects thebuilder.
(10:59):
Like if prices and materials goup more than X percent.
Right, here's your clause,right here.
Like if prices and materials goup 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.
Remember, I got full permissionto go on my rant.
They don't?
We think they know it, theydon't.
Half of these builders wereconstruction workers that were
(11:22):
working for builders five or tenyears ago.
They haven't experiencedtariffs 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, andit's all obvious when you read
(11:42):
it, but none of us would know itright.
So we've got all of thattraining for you.
We've got tariffs.
We've got ports.
We've got what else?
What slows construction down?
Come on, kelly, you're ourexpert here.
Speaker 5 (11:55):
Weather, weather Delivery.
Employment yeah.
Speaker 2 (11:58):
Immigration issues with employment yes, oh,
resources, resources bothmaterial and I'm not going to
say where I saw it, but theywere talking about ICE rounding
up people and the comment wasmade something like they're
rounding up all the constructionworkers and we know there's
(12:19):
some truth in that.
Right, so we've got, obviouslywe've got those issues right.
So it's another thing we should.
You know, maybe you can't getthe 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 tohomeowners guys?
How are homeowners gettingthrough this?
(12:39):
Do you think it's stressfulwhen you're building a new house
?
You're building a new house, soyou're excited, right?
It's stressful when you'rebuilding a new house.
You're building a new house, soyou're excited, right?
It's like when you're buying ahouse, 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 bybuilding a new home right Now?
Finally, you've made it.
You're 60 years old, you've gotall this cash.
(13:00):
I I don't know you've won onthe stock market, whatever.
You're 40 years old, you'rebuilding a new house.
How freaking cool is that?
You're getting out of yourcrappy old ranch that you've
always wanted to remodel.
Your wife is beating you aroundthe head because you haven't
earned enough money or whateverit is.
She hasn't earned enough money.
You haven't remodeled it.
You haven't done your honey-dolist.
Finally, you're building a newhouse.
(13:22):
How do you know when to list it?
Do we list it and hope for thebest?
You've got somebody coming toyou and you're like I want to
list my house, please.
The thing is, I'm building withKelly.
Kelly's a home builder.
I'm building with Kelly.
I don't know when to list myhouse.
What would you suggest?
Speaker 5 (13:38):
You have to determine how much time your typical
market takes in that city, in mycase, to sell.
Boom.
Now, I generally plan on about,I generally plan on about two
months.
But okay, I'm into the cash cpowhere they, where we can give
them up to like 90 days.
You can start that a littlemore in advance, because the
other thing that ties into thattoo is somewhere along the line
some builders are moreaggressive than others where
(13:59):
they want you to remove thecontingency to sell your house.
Yes, and you're always in a.
You're always running in abackup position because anybody
can come in behind you and putan opera on that new bill that
you're doing with your style,your personality, your love of
cabinets, your love ofeverything, and somebody can
come take that out fromunderneath you because you may
not be able to get thatcontingency off and that's going
(14:21):
to be they may.
You're're going to lose, you'regoing to go hard on your
deposits.
Within two weeks you're goingto have a 60-day time frame,
either at the beginning ortowards the end, to take your
contingency off, and it may besooner rather than later.
And most builds are going totake.
I've never had a build takeless than nine months.
Speaker 2 (14:39):
There's no way so, kelly, everything involved,
kelly, now do we think he'sgoing to do really well with
this program?
So, guys, you lose your deposit, right?
People haven't been concernedabout this because two, three
years ago, four years ago, whenthey made plans to build a new
house, because that's how, howlong these plans.
Some people have 10 yearsbefore they build a new house,
(14:59):
right, but they've always wantedto build a new house.
They're finally building a newhouse.
These plans have been thereforever and guess what?
Houses are selling at a click.
Right, two years ago, most of uswere 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, theepisodes that we've done about
Clermont-Juglar and how themarket is flattening Three and
(15:20):
three and a half to five and ahalf years.
I think it's already flattened.
Two years ago, almost everymarket in the country crested.
Two years ago.
Right, we've got three, four,five years down to the bottom.
Is it going to take longer andis it going to be harder to sell
houses based on that for thenext three to five years?
(15:41):
Put your thumbs up if you thinkit's going to be harder.
Put your thumbs up if you thinkit's going to be harder.
Put your thumbs up.
If you think it's going to beeasier.
Based on the fact we know we'regoing into a recessionary
period for the next three tofive years, are houses going to
sit longer or are houses goingto sell faster?
Are we going to go back to themultiple offers that we had two
years ago, based on the factthat we're in a recessionary
(16:01):
period?
I just want thumbs up or thumbsdown.
Which one Do we think housesare going to sit for longer?
Put your thumb up.
Do we think houses are going tosell faster in the recessionary
period coming up?
Put your thumb up.
Let me give you a stat on that.
Builders, for the last twoyears a year and a half have
been cancelling two to threetimes more contracts than they
(16:23):
were when we were gettingmultiple offers.
Does anybody see that as a signof anything?
And let me ask it a differentway Put your thumb up if you
think it's pretty likely.
Based on history, we're goinginto a recessionary period.
Okay, now we're cooking withgas.
In a recessionary period,houses take longer to sell, even
with everything else going on.
(16:44):
It's just fact, which meansthat and we're already seeing it
with builders.
Builders are cancellingcontracts at over two times what
they were a couple of years ago.
That means you've got a veryreceptive audience with builders
.
Do you think builders likecancelling the contract?
Of course not.
Do you like cancelling alisting contract or a sales
(17:05):
contract?
Of course not.
That's what it is for thebuilder.
The builder does not want tocancel that contract.
You have a tool, the builder'sCPO, right.
You have a program whereby youcan say Mr Builder, you don't
have to cancel, we can get you.
We can get them the majority oftheir money in 14 days.
(17:25):
What's more, two thirds of themare going to go make more money
than with conventional homesale and the reason for that is
because we go in and we do adeep clean to a full remodel.
They don't have to be in thehouse, we can.
They can get the majority oftheir equity close on your home.
Anybody think about the criticaldate that comes up in a builder
(17:46):
CPO.
So the builder's now buildingthe home.
Before we were talking aboutmaterial delays, labor shortages
, weather, difficult to builders, and now, of course, we've got
ICE going in, taking a bunch oftheir 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
(18:07):
saying they're going to close onJuly 4th.
We've already establishedprobably 5% of the time they'll
hit that date.
When do they know the date?
What is the turning point inthe builder trajectory?
I'll give you a clue.
It happens about a couple ofweeks before the new homeowners
can move in.
What is it that the buildergoes to get CO?
(18:30):
There comes Kelly again.
How are you so well versed inthis, kelly?
So you get a CO right, that'scalled a certificate of
occupancy.
Most of you, I hope, havelisted new construction homes so
you'll know it's a CO.
Two weeks before it's completethey request the CO.
In most markets you can requestthe CO two weeks before you're
(18:54):
due to get it, or it's probablyeven four weeks before.
Right, because the inspectorshave got to come out.
You're really requesting it todovetail how long it takes your
inspectors to come out.
Most of that time we canpinpoint those 14 days.
Why is that important, kelly?
What percentage of the builderscan give you a date two weeks
before you're supposed to move,ie the co date?
(19:16):
probably 95 95 it flips right,we go from 95, can't give you if
it seesaw flips, only fivepercent aren't going to hit the
date because something comes upat that.
So 95 of the time you, as theagent, the builder, can say, hey
, agent, you know I gave you uh,bob and sally to work with.
(19:38):
It's time for them to pressthat button.
Do you want to follow up withthem or do you want me to?
Does that sound compelling foryou for an offer to a builder?
Do you think most builderswould understand this or not?
When you go and meet with themand you go with your builder cpo
mug or flyer or whatever it isyou take as your giveaway, or we
have the flyers all built withthe bullet points on, would it
(20:00):
be compelling?
You're going to go and see 20,30 builders, however many you've
got locally, especially yourbuilders who are custom, because
most of them just cycle throughdifferent agents.
And remember, you're not goingas a real estate agent, just
like senior living, seniorliving, you're not going as a
real estate agent, you're goingas a senior living, cpo expert.
So now you're going as abuilder CPO expert to see the
(20:22):
builders.
Thumbs up if you think you getmore business.
If you go meet with 20 builders, okay, thumbs down if you think
you'll get less business andit's a complete waste of time.
If you go meet with builders,we've got the system to get you
the appointment right andthey're going to give you
referrals.
Guys, not only that, out ofthat 20 that you go and meet, do
you think you might pick one upthat's just starting to build a
new home and they think you'reso amazing that they're going to
(20:45):
give you that listing?
How many times do you thinkthat's going to happen?
At least once.
Right, that's what you're doingwith the builders, essentially.
Right, you're bringing them aprogram 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 pressthat button 14 days out.
(21:06):
So back in the day and this wasreally at the bottom of the
market, by the way I represented12 different developments.
I'd been an agent for maybe twoyears at that point.
How do you think I got thosedevelopments?
I hadn't written the book yet.
I probably didn't even have.
I may have had the radio show.
What I had is all the programsthat are in Find your Unique
Value Proposition.
(21:27):
Go read them.
I've got something different.
You get to steal all thedifferent.
All the programs are in Findyour Unique Value Proposition.
It's on the app.
The whole book is on the app infive minute bite size pieces.
It's all there for you, right?
So I would suggest that you alllook at your listing
presentation.
(21:47):
Little tip all those programsthat are in the book are in the
listing presentation that youall have.
The listing presentation alsohas in it the three options the
conventional sale, the certifiedpre-owned sale and the cash CPO
sale.
Three options Give your sellersoptions.
You're a consultant.
This will change your listings.
(22:09):
It will change your listings.
Success leaves clues.
All you've got to do is go doit.
When I say all you've got to dois go do it, I mean go meet the
builders, go meet thecommunities.
That's what happens when you goand see the builders.
The builder now knows you.
You're going to put the builderin your phone with builder next
to them, right?
You want a builder?
You've got them on speed dial.
(22:30):
If you want, you can put fourof them in a text message group
and go hey, I've got a clientthat wants to build a house.
They've only got 350.
Do any of you have any programsfor that?
Hey, I've got a client wants tobuild a $3 million house but
they need it built by July.
Do any of you have programs forthat?
There's all kinds of things youcan do with it.
You've got them on speed dial.
How many builders you've got onspeed dial?
How many builders you got onspeed dial right now?
(22:51):
Probably not that many.
Do we have enough homes rightnow for the market?
Okay, Put your thumb up if youthink we have enough homes.
If you look at the stats onthat, you may be saying that.
Whomever it was that put thethumb up for that because you're
seeing houses sit longer.
Put your thumb up again, if I'mright on that.
(23:12):
Like, what's making you thinkthere's enough houses out there
for people?
Is it because your market hasslowed down and houses are
taking longer to sell?
Let's try the other way around.
Who thinks there's a deficit ofhouses?
Is everybody crying out forbuilders to build more houses
because there's not enoughhouses for the people who want
to buy a home?
(23:32):
That's the true fact.
Why are builders not building?
Why are builders slowing down?
More regulation by thegovernment, more regulation Is
regulation with the currentpresident?
Is regulation going up or goingdown.
Put your thumb down if youthink it's going down.
Your thumb up if it's going up.
Regulation, you thinkregulation is going up.
Speaker 6 (23:53):
Kelly, they're trying to make it go down?
Speaker 2 (23:58):
Yeah, they're trying, they're talking, but they
haven't Right, but look atwhat's happening, especially in
areas like Joey's area.
Joey, are regulations going upin LA or going down from what
they were?
Speaker 4 (24:11):
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 (24:20):
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 italready, of course I forgot.
Speaker 4 (24:27):
I forgot it's.
It's a lot, it's a lot.
Speaker 2 (24:30):
It's thousands, so thousands of homes, thousands so
they're stripping, they'reputting requirements to strip a
lot.
It's a lot, it's thousands.
So thousands of homes, yeah,thousands.
So they're stripping.
They're putting requirements tostrip a lot of regulation.
So it used to take two andthree years to get permits in
where Joey lives.
How crazy is that?
Right?
So all the mayors are gettingtogether.
They're having round tables onthis.
That's happening all over thecountry, by the way.
The regulations there's a bigpush to remove regulations on
(25:02):
building.
What about interest rates?
Is that putting builders off?
What about the fact thatbuilders are being told we're
going into a recessionary period?
Good old Clément Juglarfollowers or any CPA ever.
By the way, don't listen toreal estate agents they're about
.
Is the market great?
Sure, the market's great.
Great for whom?
It's not a bad market becausewe're going into a recession.
That's the other thing to learn.
It's not a bad market at all.
(25:22):
It's freaking fantastic forinvestors and buyers.
Right, I've been priced out ofthe market.
A market correction isfantastic for investors and
buyers.
And, by the way, don't youthink that would be good for
your seller that's probablybuying a new house?
Don't you think it's amazingright now for a home seller?
Because they're still gettingto sell at pretty much the top
if they get out now.
What are you hearing there?
(25:42):
Urgency, right.
So the builders are still in arelatively good situation.
However, as the market isdeclining remember you don't
build a house tomorrow.
It takes you six months, right?
Or nine months, kelly's sayingin his market.
I think you're saying ninemonths, kelly.
In our market in Asheville it's18 months to build a house.
(26:04):
Don't ask me why.
Maybe it's permits, maybe it'sthe mountains.
You know the land isn't flat.
Yada, yada, yada.
18 freaking months.
Does the average builder knowwhat's going to Wait?
Average agent builder, anyone,a average senator, know what's
going to happen in the market in18 months?
Who thinks that builders don'tknow and a little nervous about
where the market's going to bein 18 months?
Remember most people have tosell the houses to buy their new
(26:26):
house.
Put your thumbs up if you thinkbuilders are a little nervous.
Do you think this is flippingprime time right now to go and
meet with builders?
Speaker 6 (26:35):
Yeah, I was going to tell you the builders are
nervous a little bit.
There's always uncertainty init.
But guess what?
They're not going to shut downtheir businesses just because of
it.
They have to make adjustments.
You don't see builders justshutting down.
Perry Holmes, dr Horton, allthese guys.
They're not just going to closeup shop and leave.
Houses are always going to bein demand.
My opinion is we're never goingto meet the demand that people
(27:01):
want.
Home building is always goingon as long as there's water to
support the space.
Speaker 2 (27:06):
You just said something killer there, kelly.
You said builders have and thisis big time for Joey.
You said builders have and thisis big time for Joey builders
have to make adjustments.
Do you think one key adjustmentmight 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 arecanceling more contracts.
(27:28):
They want to get the contractout, guys, so they can resell a
spec home, and even the spechomes 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 brandnew homes, gorgeous.
It's happening everywhere.
So do you think that thebuilder CPO might be an amazing
adjustment?
What do you think?
Speaker 4 (27:50):
A hundred percent.
Speaker 6 (27:52):
It's going to take uncertainty off of their plate
on a lot of options.
Yeah, john Carson, I live inFalmouth, massachusetts, which
is on Cape Cod Fantastic.
Speaker 2 (28:03):
So, joey, I'd like to go over to you.
Where are you at and where areyou helping people?
Speaker 4 (28:10):
Thanks, ro.
I'm here in California.
We're here in Los Angeles, tobe exact.
So, like you've mentionedearlier, when the market is slow
, it doesn't mean that we haveto slow down.
It's the best time for us toplant the seeds right now and
eventually, when the marketpicks up, it's the best way for
us to harvest.
It's harvest time is going tocome, for sure.
Yeah, so we just have to focus,and building relationship with
(28:34):
the builders is the best time todo at this point.
Speaker 2 (28:37):
Absolutely, and anybody listening today can go
and get their cash offer atcashcpocom.
That's cashcpocom.
Put your address in.
We're not going to bug you.
We're not going to force you tosell your house.
It's a great way to get yourfull market value cash offer.
Guess what?
It also gives you a house value.
That's way better than any ofthis automated nonsense, because
(29:00):
it's not as good as a realperson looking at it, and that's
what we'll do for you.
Chris, would you like to saywhere you are?
Speaker 7 (29:07):
I'm in the Bradenton, Sarasota area of Florida.
Speaker 2 (29:13):
I work with the senior communities and also just
traditional listings and buyersAwesome, we've got Kelly Denny
in Utah who is out there helpingbuyers and sellers.
Little inundated right now withhelping seniors Kelly.
Speaker 6 (29:31):
Yes.
Speaker 2 (29:31):
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 somequestions.
Welcome to the show, samantha.
Speaker 8 (29:45):
Hi Ro, Thanks for having me.
My husband and I are buildingour dream home and it's supposed
to be done in about four months, but we still haven't listed
our current home yet becausewe're scared it'll sell too
quickly and we'll be stuckwithout a place to live for
months.
How would Builder CPO help us?
Speaker 2 (30:00):
Great question, samantha.
With Builder CPO, you don'thave to list your home
prematurely.
Instead, you can lock in anoffer on your home but wait to
press the button until you needthe funds.
This way, you stay in yourcurrent home without stress and
when you're ready, you get yourequity in 14 days to complete
your new home purchase.
Speaker 8 (30:19):
Oh, wow.
That's amazing.
But what if the market shiftsin four months?
Could I still get a fair pricefor my current home?
Speaker 2 (30:27):
Absolutely.
We know markets can change, sothe offer is structured to be
competitive and fair, based onreal-time market conditions.
Plus, you're not locked inuntil you choose to activate the
sale.
Speaker 8 (30:41):
That makes sense.
Another thing I'm worried aboutis our builder pushing the
closing date back.
What happens if I press thebutton and then my new home
isn't ready in time?
Speaker 2 (30:50):
That's a common concern With Builder CPO.
You have flexibility.
You can set up a leasebackoption, meaning you can stay in
your home for a short periodeven after closing, giving you
breathing room in case of delays.
You can stay up to 90 days andeven longer, on a case-by-case
basis.
Speaker 8 (31:08):
That's a game changer .
I think we'll be looking intothis.
Thanks, Ro.
Speaker 2 (31:13):
You're so welcome, Samantha, and that's exactly why
this program exists to take thestress out of this process.
Welcome back to Real EstateNews Radio.
I'm Rowena Patton, and todaywe're diving into the world of
new home construction what'shappening with builders,
mortgage rates, material costsand buyer demand.
If you're thinking about buyinga new home or you're in the
(31:35):
building industry, this is amust listen.
Joining me today is Mark, aseasoned home builder, and Sarah
, a home buyer, who'sconsidering new construction.
Mark, let's start with you.
What are you seeing in theindustry right now?
Speaker 9 (31:50):
Hey, Ro, thanks for having me.
Well, it's been an interestingtime for builders.
Right now, total housing startsare at about 1.36 million,
which is actually down almost 4%from last year.
But there's a twist Singlefamily homes are up by about
6.5%, while multifamily startshave really slowed down.
So builders are still movingforward, but we're being much
(32:12):
more strategic about what andwhere we build.
Speaker 7 (32:15):
That's surprising, because I keep hearing there's a
housing shortage.
Why would builders slow down ifwe need more homes?
Speaker 2 (32:21):
Great question, Sarah .
The US is actually facing ahousing shortage of between 4
and 7 million homes, so you'dthink builders would be going
full speed ahead.
The issue is that high interestrates and rising costs have
made it harder for buyers toafford new homes, and that
affects builders.
That's why we're seeing fewermultifamily projects and more
(32:43):
focus on smaller, affordablesingle-family homes.
The median size of new homeshas dropped to 1,791 square feet
, down from almost 2,000 squarefeet just a few years ago.
Builders are adjusting to whatbuyers can afford.
Speaker 9 (33:03):
Exactly Ro, and it's not just home sizes.
Townhomes are becoming a biggerpart of the market.
Right now, about 17% ofsingle-family homes being built
are townhomes, compared to just10% a decade ago.
They're more affordable,require less land and can be
built faster, so they're a goodoption for buyers looking for
something new but morebudget-friendly.
Speaker 7 (33:25):
I've actually looked at townhomes because
single-family homes feel out ofreach.
But I've also heard thatbuilders are raising prices.
Are prices still going up orare they stabilizing?
Speaker 2 (33:36):
It depends.
We've actually seen median homeprices level out a bit down,
about 6.8% from their peak, butbuilders still have to cover
rising costs.
The big problem is tariffs andmaterial shortages.
Tariffs and material shortagesFor example tariffs on steel,
(33:57):
aluminum and even Canadianlumber have added $7,500 to
$10,000 to the cost of buildingan average home.
And labor shortages aren'thelping either.
Builders are paying more to getskilled workers, which drives
up costs.
Speaker 9 (34:10):
Yep, those costs really add up.
And here's another factorBuilders are having to offer
more incentives to get buyersinto homes.
A lot of builders are offeringthings like rate buy-downs,
paying closing costs or addingupgrades just to make it easier
for buyers to afford a home.
Speaker 7 (34:25):
That's good to know, because interest rates are
what's scaring me the most.
If I buy now, am I stuck with ahigh mortgage rate?
Speaker 2 (34:33):
If I buy now, am I stuck with a high mortgage rate?
Not necessarily.
Right now.
The average 30-year mortgagerate is around 6.65%, which is
high compared to a few years ago.
But many builders are workingwith lenders to offer temporary
rate buy-downs, meaning they'llcover part of your mortgage cost
for the first few years to keepyour payments lower.
When we sit down, we'll look atyour situation from all the
(34:55):
angles and look at what isavailable to you at that time.
That's my job.
Speaker 9 (35:00):
That's been a huge help for us, Ro.
If buyers are worried aboutrates, we say buy the home,
refinance later, because rateswon't stay high forever, but
home prices probably aren'tcoming down much more either.
Speaker 7 (35:12):
Okay, that makes sense, but I've also heard that
some builders are delayingprojects.
Are new homes taking longer tobuild?
Speaker 2 (35:21):
That's another great question.
On average, new homeconstruction takes about 7.3
months from start to finish, butwith labor shortages and supply
chain delays, it's been closerto eight or nine months.
In many areas.
Builders are trying to speedthings up, but delays can still
happen, especially when gettingpermits or inspections, which
vary by location.
(35:41):
In the mountains of WesternNorth 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 tookhim a few months to build.
He is the exception.
Speaker 9 (35:55):
That's why buyers need a backup plan.
I always tell buyers to have alittle flexibility, because even
with the best scheduling,delays happen.
But one way to take the stressout of the process is programs
like Builder CPO that letsbuyers access their home equity
within 14 days so they don't getstuck waiting for their old
home to sell before moving intothe new one.
Speaker 7 (36:14):
I was actually going to ask about that.
My biggest fear is selling myhome too early and not having a
place to live, or waiting toolong and losing my new build.
So Builder CPO helps with that.
Speaker 2 (36:27):
Exactly.
Here's how it works you securean offer on your current home
through Builder CPOpo and whenyou're ready, you press the
button to access your equitywithin 14 days.
That way, you have the moneyyou need for your down payment
and closing costs without thestress of timing your home sale
perfectly.
Once you move into your, youknow your new build home with
(36:48):
the majority of your equity.
We go to work on your old homeand do any cleanup necessary to
get your top dollar and then,when it sells, you get another
check.
Two-thirds of our sellersactually make more than with a
conventional listing and you'vegot the convenience of not
worrying about when your newhome might be ready.
That's actually really smart.
Speaker 7 (37:07):
I know someone who had to back out of a new
construction deal because theirhome didn't sell in time and
they lost their deposit.
Speaker 9 (37:13):
It happens all the time, but Builder CPO prevents
that by making sure buyers canmove forward without the
uncertainty of waiting on themarket.
Honestly, it makes me mad thatpeople are putting their
deposits in jeopardy.
There's no need when we havethis.
Speaker 2 (37:27):
Exactly, and the best part is buyers still keep the
upside if their home sells formore than expected, so it's a
win-win.
Speaker 7 (37:35):
I love that it seems like builders are really
adapting to the market.
Speaker 2 (37:40):
They are, and buyers should know that, even though
the market is shifting, thereare still great opportunities to
buy a new home.
With the right incentives,financing options and programs
like BuilderCPO, it's possibleto make the move without
unnecessary stress.
Speaker 9 (37:56):
Absolutely Ro, and for any buyers out there
thinking about new construction,talk to your builder about the
incentives and financingprograms available.
You might be surprised atwhat's being offered.
Speaker 7 (38:05):
This has been super helpful.
I was hesitant about newconstruction, but now I feel
like I have more options than Irealized.
Speaker 2 (38:13):
That's why we do this show.
If you're considering a newbuild, talk to your builder,
explore your financing optionsand check out BuilderCPOcom for
more details on how to make yourmove stress-free.
Welcome back to Real EstateNews Radio.
I'm Rowena Patton and we'recontinuing our deep dive into
new home construction.
(38:34):
We've covered how naturaldisasters are reshaping building
strategies across the country,but what about the challenges
that everyday buyers andbuilders are facing right now?
Today we are talking to James.
He's been in the middle ofbuilding his dream home and,
like so many others, he's hitsome unexpected roadblocks.
(38:54):
James, welcome to the show.
Speaker 10 (38:57):
Hey, Ro, thanks for having me.
I've been listening to the showfor years, but now I'm living
it.
My wife and I started buildinga home outside of Nashville and
we thought we had it all plannedout, but now, between material
shortages, delays and priceincreases, we're feeling a
little stuck.
I wanted to see if you had anyadvice for buyers in our
position.
Speaker 2 (39:18):
Oh, james, you are not alone.
Builders and buyers across thecountry are facing similar
struggles.
Let's start with the big onedelays.
What's the biggest holdup onyour home?
Speaker 10 (39:29):
Well, at first everything was on track, but
then our builder told us thatwindows and appliances were
going to take way longer thanexpected.
Our move-in date keeps gettingpushed back, and now we're
scrambling to figure out if weneed to extend our lease or
crash with family.
Speaker 2 (39:44):
This is one of the biggest frustrations right now.
The supply chain disruptionsthat started a few years ago are
still affecting home buildingtoday.
Windows, garage doors, hvacsystems and even basic
electrical components can causemajor slowdowns.
Nationally, we've seen leadtimes for windows stretch from
(40:05):
four weeks to 16 weeks.
In some cases that's threeextra months of waiting.
Speaker 10 (40:11):
That sounds about right.
What can we do?
We're worried that if we don'tget into our homes soon,
interest rates might go up againand then our monthly payments
will be even higher.
Speaker 2 (40:22):
A valid concern.
One option is to talk to yourbuilder about material
substitutions.
Some builders have been able toget homes finished faster by
using alternative window brands,adjusting appliance packages or
tweaking floor plans toaccommodate what's available
sooner.
Have you asked about anyworkarounds?
Speaker 10 (40:42):
Yeah, we asked, but they said it might cost more and
honestly, with prices going upeverywhere, we don't want to add
to our budget.
Speaker 2 (40:50):
Understandable.
Here's the good news.
Some builders are offeringprice protection guarantees.
They lock in your price atcontract signing, even if there
are delays.
Have you checked if yourbuilder offers this?
Speaker 10 (41:02):
I haven't, but I will now.
What about interest rates?
If we get delayed and rates goup, we could end up paying a lot
more than we originally planned.
Speaker 2 (41:10):
That's where rate locks come in.
Some lenders offer extendedrate locks for new construction,
usually between 6 to 12 months.
This lets you secure your ratetoday and protect yourself from
increases.
Some even allow a one-time ratereduction if rates go down.
Before you close, definitelycheck with your lender on that.
Speaker 10 (41:31):
Okay, that would be a huge relief.
Another thing I wanted to askabout is hidden costs.
We budgeted carefully, but nowwe're seeing all these extra
charges, permits, impact fees,even higher costs for lumber
than we expected.
We feel like we're gettingnickel and dimed.
Is this normal?
Speaker 2 (41:50):
Unfortunately, yes, construction costs have been
fluctuating and many cities haveincreased permit and impact
fees.
Some areas have seen impactfees jump by 20% in the last
year alone.
Your best bet is to have yourbuilder give you a detailed
breakdown of every cost so thereare no surprises.
(42:10):
Also, look at your contract.
Some builders includeescalation clauses which allow
them to pass certain costincreases on to you.
If you have one of those, youmay need to negotiate.
Speaker 10 (42:23):
I'll have to double check our contract.
So do you think it's stillworth building right now, or
should we have just bought anexisting home?
Speaker 2 (42:30):
That's the million dollar question.
Here's the thing Buying anexisting home right now isn't
necessarily easier.
Inventory is still historicallylow, meaning you'd likely be
still dealing with high mortgagerates.
New construction lets you avoidthose bidding wars.
Customize your home and benefitfrom builder incentives like
(42:52):
closing cost assistance or ratebuy-downs.
And after all, building yourfirst new home has been a dream
for two decades.
Speaker 10 (43:01):
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 (43:09):
Historically new construction homes appreciate
well because they require fewerrepairs and are built to the
latest energy and safetystandards.
Right now, with the housingshortage still looming, demand
for well-built homes is likelyto remain strong.
If you're in a growing arealike Nashville, where companies
are expanding and people arerelocating, you're in a good
(43:32):
spot for long-term value.
Speaker 10 (43:34):
That's a relief.
One last thing If you were inour shoes, what's the best move
to get through this processsmoothly?
Speaker 2 (43:42):
James, if I were in your shoes, I'd do three things
Lock in your interest rate ASAPto protect against future hikes.
Push your builder for a cleartimeline and explore material
substitutions to keep thingsmoving.
Budget for unexpected costs anddelays.
A buffer of 5 to 10% can make ahuge difference in reducing
(44:05):
stress.
If you can stay flexible andproactive, you'll get through
this and before you know it,you'll be holding the keys to
your brand new home that youhave dreamed about since your
30s.
Speaker 10 (44:17):
That's exactly what I needed to hear.
Thanks so much, Ro.
We'll keep pushing forward andhopefully be in our house soon.
Speaker 2 (44:25):
You've got this, james, and for anyone listening
who's in the same boat, remembernew construction has its
challenges, but with the rightplanning and patience, it's one
of the best ways to get the homeyou truly want.
Now that we've heard from Jamesand his experience with
building a new home, I want totake a few minutes to talk about
the bigger picture.
(44:46):
If you're thinking about newconstruction, or you're a
builder trying to adjust totoday's market, what do you need
to know?
Let's break it down First.
Let's talk about the long-termoutlook for new home
construction.
Right now, even though housingstarts have dipped in some areas
, demand for new homes isn'tgoing anywhere.
The US is still short between 4and 7 million homes, meaning
(45:11):
builders will be playingcatch-up for years.
Even if the market feels alittle uncertain today,
long-term trends point to steadygrowth in new home construction
, especially in areas seeingstrong population growth like
Texas, florida and NorthCarolina.
That brings me to a keyquestion I hear all the time
Should I buy a new home now orwait?
(45:31):
And the answer depends on yoursituation.
If you're renting and waitingfor prices to drop, keep in mind
that even if home prices softenslightly, mortgage rates could
rise again, making homes just asexpensive, or even more
expensive, on a monthly basis.
What's more, if you're rentingand thinking about buying, I
want you to take your rent andmultiply by the time you might
(45:53):
wait.
For example, the average rentwill cost over $90,000 over
three years, and that money ispaying someone else's mortgage.
Even if the worst case scenariohappens and you did buy and
there was a drop in value,$90,000 is a pretty big cushion.
What's more, you have thefreedom of owning your own home
(46:14):
and all that goes with that.
And if you're worried aboutrates, remember that some
builders are offering rate buydowns, where they help lower
your interest rate for the firstfew years.
That's a huge opportunity forbuyers who are concerned about
affordability.
If you can lock in a lower ratetoday and refinance later when
rates drop, you could save tensof thousands of dollars over the
(46:35):
life of your loan.
Now let's talk about anotherissue in new construction that
isn't getting enough attentionpermitting and regulation delays
and, depending on where you'rebuilding, it can take months
just to get permits approved.
Some cities are faster thanothers, but in places like
California, the strict zoninglaws and environmental reviews
(46:57):
have slowed down constructionsignificantly.
In contrast, states like Texashave streamlined their building
processes, making it easier fornew homes to go up quickly.
What does this mean for buyers?
If you're building in an areawith a longer permitting process
, expect delays beforeconstruction even starts.
(47:18):
Builders are doing their bestto push things through, but this
is a reality in many markets.
If you're in a time crunch, youmay want to consider a spec
home, that's, a home that'salready under construction or
near completion.
Spec homes let you move in muchfaster than a custom build, and
often come with builderincentives.
(47:38):
Another important trend in newconstruction 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 floorplans.
More and more builders areintegrating solar panels, smart
thermostats and high-efficiencyHVAC systems.
That can save homeownersthousands in utility bills over
(48:00):
the years.
Some builders even offer energyefficiency guarantees, meaning
they'll estimate your monthlyenergy costs before you even
move in.
If energy efficiency isimportant to you, be sure to ask
about these features beforesigning a contract.
And here's something for my realestate investors out there New
construction can be a greatlong-term play.
(48:22):
If you're thinking about buyingan investment property, look at
areas where new developmentsare happening.
Many investors focus only onexisting homes, but new builds
can offer lower maintenancecosts, strong rental demand and
tax benefits that make them asmart choice.
Plus, in high growth areas,being an early buyer in a new
(48:43):
development could mean majorappreciation over time.
As an extra note for myinvestors out there around the
USA and in Canada, we justlaunched another new program,
the Flip CPO, which is designedto help investors buy a home
with just 10% down and no creditscore requirements Just a
necessity to be able to affordthe down payment, and you show
(49:04):
this through proof of funds.
Our funding partner upfrontsthe money for repairs and
improvements and the buyer isalso required to take a 10%
share in the repairs andimprovements.
The home is then listed and,after the funding partner's fee,
the investor gets the profits.
So what's the bottom line here?
The new construction market isshifting, but opportunities are
(49:27):
still out there.
Builders are adapting, withincentives, smarter designs and
more flexible financing options.
Buyers just need to bestrategic, shop around for the
best incentives, plan forpotential delays and think about
long-term value when making adecision.
At the end of the day, whetheryou're buying, selling or
(49:49):
building, it's all about beinginformed the more you understand
the market of the day.
Whether you're buying, sellingor building, it's all about
being informed.
The more you understand themarket, the better decisions
you'll make, and that's whywe're here to give you the
knowledge you need to navigatethis ever-changing real estate
landscape.
Spring is just around the cornerand with it comes the bustling
real estate season.
Many sellers believe thatwaiting for the trees to bloom
(50:12):
and the grass to green will maketheir homes more appealing.
However, this year presents aunique scenario that might make
you reconsider that strategy.
Traditionally, spring sees asurge in home listings, as
sellers aim to capitalize on thepleasant weather and heightened
buyer interest.
On the pleasant weather andheightened buyer interest, this
(50:34):
year, forecasts suggest an evenmore pronounced increase in
inventory.
For instance, in Florida, over360,000 single-family homes came
onto the market in 2024,marking a 9.5% increase compared
to 2023.
This trend is expected tocontinue, leading to a more
competitive market for sellers.
Let's consider the advantages oflisting now.
(50:55):
Listing your home before thespring rush can provide
significant benefits.
With fewer properties available, your home is more likely to
stand out to serious buyers.
Additionally, buyers who areactive during this period are
often motivated and ready tomake swift decisions, reducing
the time your property spends onthe market.
(51:16):
How about dispelling seasonalmyths?
A common misconception is thathomes show better when trees are
full and flowers are in bloom.
While curb appeal is important,serious buyers focus on the
property's fundamentalsstructure, layout and location
regardless of the season.
Moreover, listing in latewinter allows buyers to envision
(51:39):
the property without thedistraction of lush foliage,
providing a clear view of thehome's exterior and land.
What about current marketdynamics?
Recent data indicates that thehousing market is experiencing
shifts that could favour earlysellers.
Mortgage rates have fallen totheir lowest levels since
(52:00):
December, increasing buyers'purchasing power and motivation.
However, with the anticipatedinflux of listings in the coming
months, this window of reducedcompetition may be small.
While waiting for spring's fullbloom might seem advantageous,
the current market conditionssuggest otherwise.
By listing your home now, youcan leverage the lower
(52:21):
competition, attract seriousbuyers and potentially secure a
quicker and more favourable sale.
Remember, motivated buyers arelooking year round and the
absence of leaves on trees won'tdeter them from finding their
perfect home.
Thank you so much, guys.
It's always such a pleasure tobe with you on a Saturday.
(52:43):
Or, if you're listening to thepodcast, it could be years time,
who knows, be interesting tolook back at the facts and
figures that we always collecton these a year, two years or 10
years, or it could even bedecades later.
You know, the world of podcastsand our radio shows are
relatively new, obviously, so itwould be very, very interesting
(53:04):
to look back, wouldn't it?
Thanks again, guys.
Love the fact that so many ofyou 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.
(53:25):
We have people standing by.
They will take a message, getit right through to us and I'll
see you on the radio next week.
Speaker 1 (53:34):
This has been the Plain English Real Estate Show
with Rowena Patton.
Visit Rowena and post yourquestions at radioashvillecom or
call her at 828-210-1648.
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