Tips for Buying a Model Home Straight from the Builder

Builders showcase their talents through a model home, using it as a marketing tool to lure in prospective buyers. Much of the builder�s budget goes toward model homes and their presentation, which means these homes often come accessorized and customized to the nines. It�s not uncommon for model homes to have breathtaking landscaping, pricey hardwood floors, fireplaces, and other appealing upgrades. Though model homes are technically �used,� no one has ever inhabited them. Consequently, the purchase of model homes is usually a fairly good deal for the buyer. In this post, we�ll provide tips on buying a model home and discuss some of the pros and cons.

Dealing with the Builder

The more information you have from the builder about the model home, the less likely you will be to regret the purchase later. To learn the specifics of the model home purchase, you should request a list of upgrades to the basic version of the floorplan and their associated values from the builder. Usually, builders will discount the market value of a model home in order to get a fast sale when a development is almost sold out of production homes. In addition, you can�t assume that everything you see in a model home is included in the purchase price. Ask the sales consultant or builder to list exactly what is included in the sale price in the purchase agreement. You might also want to ask for a list of the repairs the builder will perform prior to the occupancy date. Finally, because model homes are often linked to one another with walkways, ask the builder how they will be handled.

Terms of Model Home Purchases

Model home purchases will have much more complex terms than production homes. Your builder might ask for a purchase-leaseback agreement, for example. A purchase-leaseback agreement requires the buyer to close escrow on the home by a particular date but also accept a monthly rental payment from the builder until they are done using it as a marketing tool. This payment generally includes principal, interest, insurance, taxes, maintenance, and utilities expenses until you move in.

Benefits of Buying a Model Home

Model homes often have upgraded features and floorplans that greatly increase their market value. Builders usually hire interior decorators to beautify the interior, which saves buyers the time and expense of having to do so after they move in. Finally, model homes are also commonly deeply discounted because builders want to sell them as quickly as possible.

Pitfalls of Model Home Purchases

Before you make your decision, be sure to consider the pitfalls of a model home. For one, don�t forget that the home you�re buying is, for all intents and purposes, used. Hundreds of people have passed through the home, and the carpeting and floors may be worse for the wear. The heating or cooling system may also be worn down or broken from having to be on almost 24 hours a day during open houses. Secondly, model homes are often not in ideal locations, a fact that buyers frequently overlook because they are dazzled by the aesthetic appeal of the home. Finally, buyers need to remember the importance of warranties when purchasing a model home. Ask the builder for specifics about warranties on all appliances included with the home and the construction warranty on the home itself.