• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Stick-built vs. production builder

Status
Not open for further replies.

Doug in NC

Thread Starter
Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Have you noticed a difference over time (re-sales), in what stick-built homes sell for vs. what "production" builder homes sell for? You know the production builders: John Crosland, Pulte, Fortis, Comstock, etc.. I have been in many production builder homes and it is difficult to tell the difference these days from their outward appearance. Production builders offer many of the same upgrades that a custom builder could offer, but at lower prices of course.

I was comparing homes in 2 neighborhoods that are only about a mile apart. The apparent preferred neighborhood has slightly younger homes, is slightly closer to town, and offers stick-built homes. The other neighborhood was built by a production builder, and homes seem to be selling for significantly less. Lots are similar in size and amenities are similar between the two neighborhoods. Just wondering what other appraisers think about it. I was recently asked the difference between stick-built and production builder homes. Although I have never taken the time to do a study on this, I have always been under the impression that you get what you pay for. What do you think?
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Doug

unfamiliar with the Builders you reference, not from my state and also not familiar with your "term" - production builder; are you refering to modular (built in premium weather conditions) type homes that are factory built :?:

here we have several variations of custom builders and also a variation on modular built & installed companies.

one thing I will agree with; is you will get what you pay for, if you elect to cut corners, it will show up later on in the life of the dwelling.

8)
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
I believe both homes you refer to are "stick built". The "production builders" build for less because volume. Volume purchasing of materials. volume purchasing of contractors (they are never out of work). The difference in more in the frame of "custom built" and "tract home" building. The 'tract home" is a cookie cutter addition with numerous "same plan" properties and numerous options for upgrades. The "custom home" is exactly that, custom built with separately contracted improvements, upgrades and not many of the homes have the same plan in the same area. You should compare "like/kind" with like/kind properties. Have you ever noticed the tract home addition 5-7 years down the road. The exterior siding shows much more wear and the paint is fading becasue they used inferior products and paint. The same goes for the inside. The tract home can hae some nice upgrades, but the framing, slab, roof are all minimum grade materials. The vinyl flooring always wears quicker. The tract home almost always has the cheap "Home Depot fiberglass shower" and the appliances are usually bargain basement appliances. The "custom built" can have some of these lower qaulity items, but usually you can tell the difference in this area. In my area, the lower quality home does not have six panel doors or any crown moldings. It is best to use similar style homes in appaising these type properties.

I just appraised a Fox & Jacobs home for FHA. It was 3,600 SF and the sales price was $138,000. Basically, you can buy a 2,000 Sf home from another builder for about the same price. I had to use "fair" quality in the cost approach and this is a brick and vinyl sided home. Fortunately, we have other builders in the area (Lennar, Texas Big Homes) that sell similar quailty homes. But you can drive trhough the 5-10 year old Fox & Jacov neighborhood and the homes look much older than other 5-10 year old homes.

I hope this opinion adds insight and does not muddle the view of others.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
What I can't stand is when the production builder has its own subdivision in the middle of nowwhere with no new or even slightly new competing builder homes for miles.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
A very few years ago, even the Realtors would tell you the difference. The bigger production line style builders houses were close to obvious in lower quality materials and workmansip. There are some subdivisions that are slowly turning into slums as the houses fall apart. Now, it's really hard to find anything under $200,000 that has what used to be considered "average" quality construction. Seems the only ones that know the difference anymore are the home inspectors and a few appraisers.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Yes, No, and Maybe. It depends on who you are comparing (or is it whom?). KB homes and Fox and Jacobs are at the low end of the totum pole, while D. R. Horton and Weekley build some very nice custom quality homes. Both are "production" builders. Conversely, there are "custom" builders that build cheap and some that build $$$$ customs. I try to compare apples with apples. For example, in a subdivisional area, I use homes within that subdivision. It may vary in terms of builders in that subdivision, but the basic quality is constant. Conversely, in an area of individually built homes, I stay out of the adjoining subdivision for comparables. One of the most interesting things is that I have seen Centex and F&J use the exact same floor plan in the same subdivision and have a $25K-30K difference in sales price due to differences in interior finish.

The bottom line is that it all depends on buyer preferences and the finish-out of the home. The fact that a home is built by a low volume 'custom builder' doesn't mean that the quality is any different from a 'production builder'.
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Doug I like your description "Production Builders". Insurance Companies call them TRACT BUILDERS" Here we have a KB Home complex, there is a friendly bet between REALATORS as to number years before this is a slum most are saying 3-5 years. Resale of a home LESS THAN ONE year old 84,900 purchase price REALATOR is hoping but not expecting to get the 79,900 price she put on it. Yes I am fortunate I have many HONEST REALATORS to work with here. TOWLE Brothers a "production builder" who only do HIGH END homes have a Cease & Dicist order in New Hampshire. I think there is a big difference between them & Custom Home builders Doug U may wanna see what Insurance companies Rates R for a builder who builds five or less homes These are considered Cutom Builders & the rates of a Tract Builder / Production Builder (If next year there able to get insurance) When doing a Tract/Production Builder & they give u a hard time about given out information ask how many CONSTRUCTION DEFECT CLAIMS they have pending.
 

Doug in NC

Thread Starter
Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
It really gets tough when there are tract/production builders in the same neighborhood. I can think of 2-3 instances. This is when it really gets tough. You will see $15-20K difference in sale prices but they look the same on the outside. Difficult to explain when you are trying to use them as comparables, when you haven't seen them on the inside.
 

EDWARD BERRY

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Doug,

Our M&S is similar to your area.

Out tract builder's houses at first would resell at an increase, but never at the same sf/$ than a better quality builders house(size for size)

However, after a few years the Realtors and general public forgot that they were tract houses and now (15-20 years ) later we see the values converge($/SF).

ed in arkansas
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
just another note on this subject I think a lot of the 20 30 K difference is in the way they can get one financed. The sales pitch given to the customer & the Buyer not being knowledgeable. We had one here the people bought from one Tract builder (Admitting paying more) But liked the Trailer they worked out of. & the girl that was doing the selling. Those are the Exact reasons they paid more for the Home. & In house financing.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks