I Saved $60,000 Buying My House After Switching Strategies—And Made Money From ‘Incentives’ When I Moved

IN today’s housing market, where prices have soared and inventory remains scarce, the dream of owning a home can seem out of reach for many.

Geanna Diaz, public relations specialist at New Jerseyfound himself struggling with these same challenges.

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With a limited selection of older, expensive homes in her area, Diaz feared she would never own a home.

“As a millennial who has lived in New Jersey my entire life, I began to see how unattainable homeownership would be for me,” Diaz said. Realtor.com.

Despite their diligent savings for a down payment, the dream of owning a home seemed increasingly difficult.

“I saved and saved and saved, only to see the American dream slip away in a housing market that has been impossible to achieve if you live in the tri-state area,” she says.

CHANGE OF LUCK

Her luck began to change when Diaz, who works remotely, decided to explore housing options outside of her home state.

The search she conducted led her to Leland, North Caroline – a thriving area just 20 minutes from Wilmington.

The move to Leland was transformative, according to Realtor.com.

When Diaz started looking for a home in September 2023, the median list price for an existing home in Leland was $397,450.

However, she successfully purchased a new 1,500-square-foot, three-bedroom, two-bathroom ranch-style home for $339,999.

Not only did this save $57,451 compared to existing homes, but it also promised lower maintenance and repair costs in the long run.

NEW NEW NEW

The trend Diaz experienced is becoming more and more common.

As of May 2024, the median sales price for new homes nationwide was $417,400, compared to $424,500 for existing single-family homes, according to the US Census Bureau and the National Association of Realtors.

This represents a rare time when new homes are cheaper than existing homes – an occurrence that has happened only twice since 1982.

Realtor.com economist Ralph McLaughlin attributes this shift to several factors.

Rising values ​​of existing homes due to inventory shortages have led builders to adapt by offering new construction at more reasonable prices.

I saved and saved and saved, only to see the American dream slip away in a housing market that has been impossible to achieve if you live in the tri-state area.

Geanna DiazRealtor.com

Additionally, many builders face a surplus of unsold homes, a byproduct of slowing buyer activity during periods of high mortgage rates.

To attract buyers, builders are also offering significant incentives, such as $10,000 toward closing costs and an appliance package that Diaz received.

These incentives are helping buyers like Diaz capitalize on the benefits of new construction.

NOT WITHOUT ITS FAULTS

Despite the advantages, new construction presents challenges.

Diaz faced problems with incomplete painting, misaligned kitchen cabinets and other oversights by the builder.

However, your real estate agent was instrumental in resolving these issues, ensuring that the final product met your expectations.

“The biggest lesson I learned as a first-time homeowner is that nothing can be brand new or perfect,” admits Diaz.

“I had high expectations of ‘new construction,’ which would mean spotless. But I learned that there will always be some obstacles along the way.”

Despite the obstacles, Diaz is thrilled with his decision.

“The biggest advantage of purchasing a newly built home was the feeling of accomplishment,” she says.

Her journey not only fulfilled her dream of owning a home, but also deepened her appreciation for the sacrifices made by her parents and the obstacles faced by many in her community.

For those navigating today’s complex real estate market, Diaz’s story offers hope and vision.

New construction, with its potential cost benefits and customization options, is proving to be a viable alternative for many buyers struggling with the high prices and limited choices of existing homes.

As a millennial who has lived in New Jersey my entire life, I began to see how unattainable homeownership would be for me.

Geanna DiazRealtor.com

TAXES

In 2017, North Carolina overhauled its sales and use tax regulations for construction projects, introducing a binary system that left many contractors perplexed, according to the NCBar Blog.

Department of Revenue Directive SD-18-1 was intended to clarify the new rules, but the distinctions between Real Estate Contracts (RPCs) and Repair, Maintenance, and Installation Services (RMIs) remain complex.

Construction projects in North Carolina can be taxed under two main categories: Real Estate Contracts (RPCs) and Repair, Maintenance, and Installation Services (RMIs).

Each category comes with its own tax implications.

The main difference between RPCs and RMIs lies in who takes responsibility for sales tax.

In RPCs, the tax on materials is borne by the service provider, and no additional tax is charged to the customer.

In contrast, RMIs require the end customer to pay sales tax on both the service and associated goods.

For service providers, correctly categorizing a project as RPC or RMI is crucial for tax compliance and accuracy.

Using the appropriate forms – Form E-589CI for RPCs and Form E-595E for RMIs – ensures proper tax treatment and can protect against potential audits.

Despite the clarity provided by Directive SD-18-1, the complexity of these rules means that contractors must remain vigilant and informed to effectively navigate North Carolina’s construction tax landscape.