New Homes in Baton Rouge by DiDan Contractors, L.L.C.
Whether you are relocating or just searching for information about new homes in Baton Rouge, we encourage you to contact us to assist you in your efforts. Browse through our
houseplans to find a plan that best suits your needs. We also welcome you to provide us with your own houseplan to build and/or lot to build on, and we will work with you to draw up a construction contract to suit your individual needs. If you do not already have a lot and do not find a suitable lot available in one of the
subdivisions featured on this website, then please contact us so that we may discuss your location needs and assist you in finding a lot on which to build.
The remainder of this page is dedicated to providing a general understanding of some concepts relative to new home construction for those of you who are new to the home buying experience.
DiDan classifies its new homes into two general categories, namely spec homes and custom homes.
Custom Homes
There are quite a few different arrangements that can be made between a builder and a home buyer concerning a custom home, so please contact us to discuss what your needs are and how we can help you accomplish your goal. No matter what arrangements are made, a custom home builder and a custom home buyer need to come to an extremely clear understanding of what is expected of each. Therefore, the custom built home contract requires extensive and detailed communication before the project begins to make sure that the contract is properly individualized to express the responsibilities of each party and to eliminate as many uncertainties as possible. Some custom home buyers want to be involved in every stage of the construction process which requires a product quality or aesthetic descision to be made while others just want to decide a few key aspects of the homes such as interior and exterior colors, tile or wood floor selections, and countertop selections. Obviously, many descisions must be made regarding the products that will be used in the construction process. During the intitial discussions between the builder and the buyer, the builder should be able to describe the products that the builder uses along with the alternative options available along with the benefits and drawbacks of each so that the buyer is able to make an informed decision regarding those products. Once a plan is chosen by a custom home buyer, DiDan prepares an estimate using DiDan's standard building products and subcontractors (unless the buyer specifies prior to the estimate that certain products shall be included in the project). We will then go over the estimate with the buyer to determine if there are any items that the buyer would like to modify. A buyer may wish to upgrade the quality of certain items and/or simplify certain aspects of the estimate to control costs. The most efficient way that we can accomodate such modifications is to set "allowances" for particular items or categories of construction costs. For example, if a buyer indicates that he or she would like to personally select all knobs and handles for the cabinets and the door knobs, along with the towel rings, the towel bars, the tissue paper holders, and the robe hooks in the bathrooms, then we will look to the estimate to see the total costs for all hardware items for the house, and we set an allowance for the hardware based on that item of the estimate. A buyer may then choose all of the hardware items and if the total is higher than the allowance, then the buyer will pay the difference either to DiDan or directly to the supplier of the item. If the total for the hardware items selected by the buyer is less than the allowance, then the buyer saves money on the costs of constuction. As noted above, custom home building involves a great deal of communication so please contact us to discuss your custom home.
Spec Homes
Our "spec homes" are homes that we begin to build prior to entering into any contract with a buyer. Spec homes are built according to design specifications that are not selected by the buyer, but rather, by the builder in hopes that a buyer will desire the home being built and thereafter purchase the home. With spec homes, DiDan must first make a determination of whether there is a need for housing in a specific area. Then, DiDan must purchase a lot or group of lots in that area that we know will be suitable for the housing demand for the area. DiDan must then anticipate what kind of home a home buyer might want in the area and then we match or modify an architect's house plan to each of the lots while taking into consideration such factors as the zoning ordinances affecting the property, the subdivision restrictions affecting the property, the plan size ranges expected throughout the subdivision, the average sales price per square foot for comparable houses in the vicinity, and the target market of potential home buyers. We then begin construction. Some of our spec homes are completed prior to entering into a purchase agreement with a buyer, while others are under contract prior to completion. If we enter into a purchase agreement after we have chosen a plan for a specific lot but before construction is completed, the spec home is then referred to as a pre-sold home.
Investment Property
Many investors are purchasing property in Baton Rouge at the two distinct times of the year which yield the best return on investment- before the fall semester of college and before the end of the year. The influx of college students during the summer prior to the fall semester creates a significant demand on the housing market, and this makes sense because it is the ideal time to purchase a new home for a college student. More and more students, along with their parents, understand that they can purchase a home and make money year after year during college instead of paying rent. These same students are renting out a room or two in their new home to other students or friends and using the rental income to pay part of, all of, or more than the mortgage note. New homes appreciate over time and this appreciation coupled with years of building equity by paying off a mortgage instead of paying rent turns a new home for a college student into a unique investment opportunity instead of a cost. Investors who do not have children attending college also find the summer months most beneficial in finding tenants for their properties.
Due to the new tax benefits made available through Go Zone legislation, the other significant buying period for investors is before the end of the year. For more information, please read Go Zone information and references (link not available at this time) and consult with your accountant and attorney.
Absorption Rate
The number of lots that we decide to purchase for spec home construction depends upon further speculation based upon the past absorption rate of homes comparable to our spec homes to help us determine an anticipated absorption rate. The anticipated absorption rate simply refers the number of homes expected to be sold in a specific location over a specific time period (i.e., an average of two houses per month in subdivision A during the year 200X), and this expectation is based upon historical market data coupled with other market factors such as population increases/decreases, etc. In our experience, actual absorption rates are significantly higher during particular times of the year. Traditionally, winter months are the slowest months in terms of real estate sales, and sales start picking back up in the spring. By a significant margin, we have experienced more new home sales in the summer months than any other period. Many buyers want to be moved into their homes before the beginning of the school year, and then overall sales start to decline again in the fall. Further explanation of the summer sales strength is provided in the section under investment property.