Monday, February 13, 2012

Over priced upgrades

As I mentioned before after you sign your contract you have two weeks to make changes.  During this time I did research on a few of the upgrades and I found some really surprising results. As the title of this post suggests I discovered that the upgrades offered by Ryan Homes are well over priced.

The most blatant of over priced upgrades (that I discovered) was the appliances.  My wife and I had opted for the second highest level.  This upgrade was $3,300 for a GE profile oven, dishwasher and above the stove microwave.  When I looked up the price on Lowe's and Sears I could buy all three for $2,900.  That is a savings of $400, plus if I sell the very basic stove, oven and above the stove exhaust fan for 50% on Craig's list I could get $600, that'll bring my savings to $1000 easy!! Plus I can get any brand.  Needless to say we changed our upgrade to the basic package.  My wife and I also plan to hit the Memorial day sale and save even more.

The kitchen knobs are a similar story.  They charge $200 for knobs on the kitchen and bathroom cabinets.  The knobs they use are simple chrome knobs. I never counted the number of knobs but I would guess 40 in the entire house.  At $3 a piece (price at home depot) that would cost $120.  Knobs are super easy to install your grandmother can do it, all you need is a drill.  Plus, you can add style to your kitchen by choosing from hundreads of knobs at home depot instead of being forced to have the same knobs as all your neighbors.  You can also get light fixtures and faucet upgrades for cheaper than the upgrade (plus sell whatever they give you on Criag's list to make even more money).

The bigger ticket items such as granite counter tops also can be done cheaper than the upgrade itself.  The granite upgrade in our model (the Rome) is about $4,500.  I got an estimate from Home Depot for the same granite for $3,200 installed plus $900 to remove the old counter  tops.  In total I could save $400.  What is amazing here is Ryan homes already has to install the counter tops PLUS they don't have to remove old counter tops PLUS you already paid for basic counter tops in the price of the house, so you can just see the profit Ryan is making off their customers upgrades. Ridiculous huh!

You might be asking how can Ryan Homes charge such crazy prices for their upgrades.  They are relying on two things.  First they are hoping that their customers don't realize, either by ignorance or since Ryan prices their upgrades as one price, instead of the more familiar individual price or price per square foot you would see at a store.  Secondly and most importantly they hope that their customers need to roll the cost in to their mortgage.  The only way you can put the cost of the stove in to your mortgage is to buy it through Ryan Homes.  If you don't have a down payment that can cover doing these items on your own, then if you want them you have to pay the extra price.

If you already bought the upgrades you shouldn't worry too much, you probably added as much value to your home as you paid in the upgrade.  When you upgrade parts of the house it sells for more than the upgrade cost.  People who buy fixer upers, fix everything, and then sell make money because it cost less to upgrade most things than it adds to the home value. The same applies for new homes too except Ryan is making the profit instead of you, you most likely broke even.  But there is a few grand out there that you can save if you play it smart.  Finishing your basement (if it wasn't your incentive like it was ours) is also a good way to make save money.

Also, as far as I can tell it would be hard to upgrade the carpet after the house is built for less than the upgrade, but it is very close (Ryan I am sure is still making money on the upgrade because they don't have to pay to tear out old carpet).  It'll depend on the quality of the upgraded carpet which I haven't seen.  We have our flooring meeting on Friday, so I'll let you know after that.

Lastly,  I will say even with some price gouging for the upgrades Ryan Homes still seems priced well.  I am talking about a few thousand in savings at most by doing the upgrades after the house is built.


  1. just found your blog. What a great resourse. My wife and I are checking Ryan homes out for a possible build. Sounds like several of the upgrades you can do yourself or contract. Which upgrades would you recommend actually getting from Ryan homes?

  2. Expansions to the house (such as the morning room) can't be done afterwards so start with those that interest you. Adding in baths rooms (we added one to the basement) is probably an ok price, but I didn't research it. Granite countertops and carpets (depending on the type) can be done cheaper elsewhere. What might make it less of a good deal is the removal fee for the current countertop and carpet. You can remove it your self if you want and get the new stuff professionaly installed to make sure it looks good and save some money. I am about to put up crown moulding in most of the house and it seems I will save a bit there too, and that is after buying a miter saw to cut the stuff, but it will take me time (so that might not be worth to diy it if you like the crown moulding they have and are just doing one or two rooms).

    The finished basement seems like it could be done for less, but looking online it seems like the price to have a contractor to come in and do it varies from city to city. You can do research on prices in your area. We got it for free for going with NVR mortgage (really it was probably already factored in to the price of the home).

    It really comes down to how much diy you are willing to do, and how much you want to be able to customize what you use. You get a lot more choices when you do it after it is built. Like we now have gorgeous handles in the kitchen, but chrome knobs were the only choice from Ryan Homes.

    Lastly I think the crown molding on the cabinets looks great. we had Ryan Homes put it up, it wasn't too much, I don't think you could easily do it for less (or how easy it is to find matching molding), but I did no research.

  3. I signed for a Ryan home on week ago, so I'm still within the two week window.

    The prices I have been given for the appliances are reasonable.

    In case someone wishes to check my work, I'm looking at the $2400 option Deluxe I, built-in microwave, double ovens. (This is for a Picasso townhouse.) The product model numbers with GE prices are:

    Oven: JTP55DPBB, $2400
    Dishwasher: GDF520PGDBB, $400
    Microwave: JVM1950DRBB, $400
    Cooktop: JP356BMBB, $850

    Thus, I'm paying $2400 to upgrade to appliances that cost $4050. (Of course, the price of standard appliances need to be subtracted from the $4050 to see if there's an implicit installation charge/markup.) I would guess that I'm being changed more than it costs Ryan Homes, but less than I would pay at retail prices.

    1. Jeffery,

      Were these upgrade GE Appliances for your home? I met today with my Customer Concierge but did not sign yet. She has to get a few things priced for me still; therefore, as far as I'm concerned I can still make changes. She said I could not, but nothing is signed! I was not told about upgrades on appliances. I was just told black or stainless steel.

  4. Jeffrey,

    Are you sure you're only paying $2,400 extra for all four of those items? What you are saying is contrary to what I experienced and what others I talked to experienced. If you're right then great for you, but if you are still in the two week window you might want to double check. What I have heard is that the price to upgrade is close to or more than the price of the upgraded item.

    I even had the project manager tell me that Ryan Homes charges more because that way you can roll it in to the mortgage.

  5. I'm confident that the upgrade is $2400. I'm typing this up with the upgrade sheet handy; the sales representative also let me borrow their appliance book.

    That said, I'm making no attempt to generalize, but just to provide a data point.

    1. Does Ryan Homes come with granite counter tops or is that an upgrade!

  6. I took another look through the upgrade sheet ... and sure enough, I had the total wrong.

    Basically, there's one upgrade for double ovens, while the appliance package upgrade is a separate charge. The upgrade papers are a bit misleading. It seems that choosing double options forces the selection of an appliance upgrade package. Thus, I'm paying $1700 + $2400 = $4100 to upgrade to units costing $4050.

    Now that I know this ... I might leave it. It's still inexpensive enough that I don't think I can come up with a better way of getting the same appliances in place, once you count shipping, installation, and most importantly, the cabinets being built around the selected units.

    But still, it's good to be aware of the fact that I'm not getting a bargain.


    I've similarly looked up my refrigerator options. I may end up paying $1000 to upgrade to a $1100 unit. But if I start with the cheaper and smaller fridge, the one I want won't fit in the space. I'm concluding the same thing here: it may be worth the money (to me), but it's clearly not a bargain.

  7. Just remember that your property taxes are based on the sale price of your home on a new build...So you are inflating your property taxes by buying all your appliances and upgrades from the builder.

  8. For our home the size of the locations for the appliances did not change depending on what appliance we got. For example a over oven hood vs over oven microwave did not change anything (except the appliance). Also the size of the fridge cutout did not change. If they tell you otherwise ask to look at the plans for the two options to verify they are accurate in their statement. Again the Ryan Homes agent works for Ryan Homes, not you. She doesn't care if you save money or not.