cautions about not depending on a close date….about not locking in rates too early….and about not scheduling moves and life changes around the initial contract close date. The shift began in Spring 2020 causing some major price increases to the builders for supplies which has had to be passed on to the contract pricing. Under normal conditions when building in neighborhoods, one would expect a gradual uptick in house prices which would be understood and adjusted for in appraisals. But this is not the case under the “new normal”. Under the “new normal”, the increased price of homes in subdivisions cannot be matched by current appraisal guidelines. Under the current guidelines, appraisers have to consider what “sold” in the last 6 months to 1 year depending on recent sales of the area. What sold in the last 6 months to 1 year cannot justify the cost of building in 2021. Appraisal guidelines do not take into consideration the cost to build scenario any more. That leads to a dilemma: How can a builder build a home for a buyer at today’s costs and be assured that it will appraise for the purchase price and how can the cost difference vs appraised value be accommodated? Not only that, but what price increases during the build will the builder incur and how will those increases be handled. The bottom line is that a builder cannot afford to build and then have to sell for less than it cost. Builders are having to make hard decisions like: Do I go ahead and build and not price nor place on market until prices stabilize? Do I stop building until prices stabilize? Do I hold firm on purchase price when appraised value doesn’t match and expect buyer(s) to pay the difference? Will prices stabilize? Yes, it’s a new and changing world in new construction under this “new normal”! No one has all the answers and everyone is facing the challenges the best way possible as we forge ahead. Beverly Hardy Cell: 478-951-7140 beverlyhardy@cbfreerealty.com Christi King Cell: 478-662-4285 christihking@cbfreerealty.com 19

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