Buying New Homes
There are two types of new homes, one is an “inventory home” and one is a “to be built home”. There is a vast difference yet they are both new homes.
An “inventory home” is a home that the Builder has built as a speculative home and he is betting that a Buyer will come along and buy the home. REALTORS call these homes “spec homes”, short for speculative. Another type of new home is a “to be built home” meaning that after signing a contract with you, the Builder will begin the construction of your new home.
Consider an “inventory home”. What you see is usually what you get. If the stage of construction is at an early stage, you may get to choose carpet, other floor materials, cabinets and anything that has not already been ordered for the home. Generally speaking, if the home is well under construction, you may only get to choose carpet. Cabinets and bricks or stone, for instance, are ordered at the very early stage since it takes a while to get them. At any rate, this is a good way to buy a new home. Whether or not you get to choose anything, you probably will see a discount on the purchase. Many times, your Realtor may know of a “special deal” for you on an inventory home. It is customary for a Builder to reduce prices when he has only a few homes left in the neighborhood and is ready to move on to his next neighborhood.
Remember, the agent in the model home works as an employee of the Builder and has no obligation to a buyer other than making the buyer aware of the offering as the Builder dictates to him. This is where your Buyer Agent can help you structure your offer rather than allowing the Builder’s employee to structure it for you. After all, your Buyer Agent is representing you and the Builder will pay your Realtor to bring his/her buyers to his homes for sale. What a deal for you!
Now, let’s consider a “to be built home”. This means that you will sign a contract with a Builder to have one of his floor plans built for you. The desire to build one’s own home is great among most buyers and, often, building one home is enough. It starts out to be fun but it is difficult at different times during construction. It is never a good idea to have conflict with your Builder, so having a Buyer Agent representing you will make the transaction much easier for a Buyer and will keep peace between the Buyer and Builder.
When building your home, the temptation to upgrade everything is very strong. One has to use extreme caution in this area and a Buyer Agent can advise on upgrades that will actually put a homeowner in a stronger position when selling the home. Buyers often do not think of selling a home that they are still building but life does have strange paths for us to travel so why not safeguard future profits by having a few things that are important and still maintain an an assurance of having equity in the home at the time of a future sale.
Building a home will not come with sale prices or discounts. One will pay full price for a “to be built” home. If money is no concern, building a home is a lot of fun. However, for most people, price is a very important factor. In all honesty, there are home trends just like there are trends in automobiles, clothing, electronics and everything we buy. What is really “hot” today, will be dated in ten years, so relax and realize that you can have a beautiful new home today without having to have everything that is trendy today.
The major difference in an “inventory home” and a “to be built home” is the price and being able to make choices.
