NEW HOMES: The Shrewd Homebuying Guide

The Deceptions of Model Homes

The first thing I'll say about a builder's model home is that it is probably not the best plan for you. Model homes are beautiful examples of marketing. They're intended to entice you to purchase. They appeal to emotion and cause unsuspecting purchasers to fall in love with their ploys and overlook their shortcomings. Builders and designers select models for their appeal, not for practicality. While a furnished model may be beautifully decorated and may give you a warm and cozy feeling, be sure to look at other plans too. You may find that a different plan better suits your family's needs. If the builder has other plans under construction, walk through them, regardless of the stage of construction. Try to get a feel for the layout, the flow of the plan and the size of the rooms. Visualize your furniture in place.

That's one of the problems with model homes. You see their furniture in it, not yours. And yours may not work. Measure. Check it out. I've known some builders who deliberately put smaller than normal pieces of furniture in their models just to create an illusion of spaciousness.

You should also be aware that the average home constructed will not look as good as the model. Regardless of how vehemently builders disagree, model homes get special attention during construction and receive frequent maintenance to keep them looking great. Even those builders who don't knowingly use different standards for their models will still get special consideration from the subcontractors who work on them.
Subs know when they're working on a model home and do their best work because they understand that appealing models generate future business.

Be aware of the builder's use of "decorator extras." Builders often add a number of features (extra trim, appliance upgrades, vaulted ceilings, decorator colors, wallpaper, flooring upgrades, ceiling fans, etc.) to enhance the appearance of what might otherwise be a plain and unappealing home. Although such extras may be listed in the brochure and may be pointed out by the sales personnel, the use of such features gives an unfair advantage to the appearance of model homes.

It's often difficult to visualize the home without the upgrades, so ask the builder if there is a similar or like plan under construction that you can use for comparison. Touring a home without all the upgrades will give you a better picture of what you may actually be buying. It's also a great idea to drive the neighborhood and look for occupied versions of the model. You may be able to return and speak to someone who already lives in the model plan and find out what they think of both the plan and the builder, and, if you're lucky, they'll invite you in.

Be careful, though, of adding too many "decorator extras" to your home. You'll sometimes pay a premium-such extras generally carry a much higher margin of profit than the home, itself-and unless you have no concern for the additional costs, these features should be considered for their added value. However, if there are some upgrades that you simply must have, there are a couple of ways you may be able to get them at a reduced cost. The first and most direct way is to negotiate the price with the builder. Since extras carry a higher margin, there is some room for bargaining. Depending upon the item, you could be able to get a reduction in price of 30% or more.

It may also be possible to add some of the features yourself, either during construction or after closing. Compare the prices quoted with those offered by local building supply stores. You could save hundreds of dollars or more by comparison shopping. Furthermore, some of the on-site workers may be eager to work after hours installing ceiling fans, garage door openers, landscape extras, or other such extras.

You'll need the builder's permission, of course, to do any work prior to closing, and you must be willing to risk losing your money for extras installed should you not consummate the sale. My general recommendation would be to avoid doing anything prior to closing that costs more than a couple of hundred dollars.