Ah, the fabled model home—the first one built in a subdivision, the builder’s crowning jewel, the one packed from floorboards to rooftop with awesome features and too-cool-for-school extras. They’re an oh-so-seductive tool to tempt buyers into not only purchasing one of their homes, but also to shell out for some of those good-looking upgrades. But do you really want to live in one? For real?
As construction winds down and developers pull up stakes, they’re often eager to sell off those prototype domiciles. Some prospective buyers lie in wait until this time comes, ready to pounce at this upscale abode—and maybe score a deal at the same time. Other buyers are turned off by the thought of living in a slightly used home that was the first of its type and has been trampled through by dozens, maybe hundreds, maybe thousands of prospective buyers. Could it have gone up too fast to be quality construction?
So let’s take a look at both sides of the model home equation, shall we?
Convenience: You’re getting a move-in ready, never-occupied home with loads of upgrades—and you don’t even have to wait for it to be built.
“Models are already decorated and may have color on the walls, great fixtures, lush landscaping, and so on,” says David Schneider, a Realtor® and interior designer in Southern California.
And because you may be able to purchase the furnishings at a discount, you might not have to haul your tired sofa across town and into your new house.
A perfect layout: Unsurprisingly, builders will style a model with all the latest features buyers want to see, according to Matthew Gaudet-Walters, sales representative for Walters Homes in Barnegat, NJ. Open layout? Granite countertops? Pro-level kitchen appliances? You’re likely to find them and more.
No ‘settling’ repairs: A bit of settling is to be expected when buying new construction. Along with those creaks and cracks, there may be some minor repairs needed within the first year, too. But guess what? That’s not your problem!
“Any repairs to a model home as a result of settling have already been dealt with by the builder,” says Gaudet-Walters.
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The warranty clock has already started: New homes come with a standard 10-year warranty from the builder. But since a model home has been around for a few months or even years, that time is subtracted from your warranty coverage. Also, most appliances have a one-year warranty that may have already expired by the time the model is put up for sale.
“Buyers should ask their builder to include a one-year warranty on mechanicals and appliances, and to reset the builder’s warranty before committing to buy a model home,” Schneider says.
Loss of new home discount: Typically, a new home yields a discount on your homeowner insurance rate for the first five years after it’s built. Buy a model that’s 2 years old, and you’re cutting into some sweet discount time.
It’s not really new: There’s no getting around the fact that a model home—while technically never lived in—is still used.
Along with often serving as the on-site office for builders, scores of families have walked through it and you can pretty much assume that virtually every imaginable surface—from the closet light switches to the toilets—have been touched. Repeatedly.
“Buyers often forget that a model home isn’t the same thing as a new build,” says Bruce Albion, a Realtor at Re/Max Town and Country and a real estate attorney in Atlanta, GA.
Quality could suffer: We’re not saying your living room floor is going to cave in, but model home finishes are often built for flashy looks rather than quality, Albion says.
“The builder may have rushed building the particular model so that prospective consumers could get a glimpse of what the homes would look like,” he says. “So from the cosmetic side, everything can appear great; but behind the walls, it might not be as sound or as high a quality as other homes in the area.”
There’s a lot of traffic: Models are usually located at the front of the subdivision—that’s the whole idea—and if it’s a corner model, that exposure to an exterior street often has significantly more traffic. A neighborhood pool or tennis courts are often near the entry, too, meaning extra noise and traffic in the area.
The bottom line
There will always be pros and cons when buying any home, but “the pros definitely outweigh the cons when it comes to buying a model home,” says Gaudet-Walters.
So it all comes down to the basics. When considering a model home, ask yourself these questions: Does this floor plan really work? Will I save considerable money by not having to upgrade?
And be sure not to be completely wooed by those uber-cool features we’ve been telling you about. Builders tend to point to the upgrades in a model home as a reason to charge more, Albion says.
“These are the equivalent of overpriced mud flaps, trunk mats, floor mats, and rims on new cars intended to double the average profit on a car,” he says.
“Insist on a significant discount when buying a dolled-up used home,” he adds. “Models should be sold at a substantially lower price than other homes inside the subdivision, because they are not brand new. That’s one of the things that makes them such an appealing prospect. If not, you’ll be overpaying.”