Tips for Buying a Home in an Infill Development in Urban Neighborhoods

infill developments
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The major goals of many urban infill developments are threefold:

  1. To ensure that the new projects fit within the existing confines of the neighborhood.
  2. That the project enhances the area.
  3. That the increased density is supported by community services.

Some critics oppose infill development because they believe it may lead to gentrification -- changing the overall character and makeup of the neighborhood -- which is why the successful infill developments blend rather than change.

For example, nobody wants to come back from a trip to discover the rat-hole house next door is now a mini-mansion. You might not like a rat-hole house next door but you probably would not appreciate a million-dollar home that seems out of place for your community. That's why there tend to be heated debates whenever a developer wants to add a bunch of homes in the city. Neighbors worry that their community will change for the worse.

Types of Home Buyers for Infill Developments

The target audience for many infill developments are first-time home buyers, empty-nesters and those wishing to move back into the city and downsize, and these types of home buyers are often attracted to new homes. New homes offer many amenities such as no need for home improvement projects, no repairs or upgrades and less maintenance in the early years; everything is sparkling new and ready to move into.

Part of the appeal is buyers don't have to move into the suburbs to own a new home. They can enjoy all of the benefits of new home construction while not giving up the desire to live within an urban environment, close to where they work, and near restaurants, movie theaters, places for social gathering and shopping.

The Downside of Infill Developments

Before construction can begin, builders need to buy the land. They look for vacant lots and under-developed parcels. Often there is a reason these lots are vacant or not utilized. This under-utilized land might be situated under a freeway, at a busy intersection, near the train, under a flight path, next to a landfill; in other words, in an undesirable area.

If you're thinking about buying a new home in such a location, consider the drawbacks when it comes time to sell. Your home, even though newer than others in the same community, might be worth less due to its location. Remember the real estate mantra: location, location, location.

Before Contacting the Home Builder of an Infill Development

The practice of forcing home buyers to register through a Realtor is common practice in many parts of the country. In defense of the home builders, they spend a lot of money on marketing to try to attract a home buyer, and if they don't have to pay an agent a commission for bringing a buyer to them, they make more money, which is one of the primary reasons to run a business, to make a profit. This is why many builders, although not all, will refuse to let an agent represent you if you have contacted the builder without your agent present.

Some home builders might not pay a cooperating commission to any brokerage under any circumstances, but you should still ask your agent first as that is typically an uncommon practice. Let your agent register you with the builder before you go to an open house, call the builder, or stop by the construction lot. This will ensure that your agent can work on your behalf. You should always try to obtain your own representation when buying new construction.

How an Agent Can Help You to Buy a Home in an Infill Development

The builder will probably hand you glossy marketing brochures, touting the benefits of living in the new community. Your agent, on the other hand, can help you to understand the cons of buying in the neighborhood, to give you a separate perspective. Your agent can also get a feel for the development and let you know how your home might appear to future home buyers many years from now. What looks new and shiny to you today could appear dull and dingy in 5 or 10 years.

Your agent can help you to select upgrades, and advise you as to whether you might save a little money by installing some of your own upgrades or buying your own appliances, separate from the mark-up charged by the builder. Much of a builder's profit margin can be built into the upgrades. Some upgrades might not add much to the value of your home, and your agent can advise you based on her experience and knowledge of the marketplace.

Agents can ask the tough questions for you such as:

  • What happens if the project doesn't sell out?
  • Is there a guarantee that the builder won't discount future sales in the development?
  • What do you need to know about the HOA?
  • Are you free to use your own mortgage lender for financing?
  • Does the builder have any complaints filed against the company?

Remember, builders are selling you a product, but your agent is providing a service, and that service is paid for by the builder. We don't know an agent alive who won't suggest that you obtain a home inspection, too. Yes, even new construction can be defective.

At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.