When Karen and Aneil Mishra home-shopped in Okemos, Mich., in 2009, they restricted their search to new houses to minimize the effects of mold and dust on their family’s allergies. But they didn’t want to endure months of construction, which they had done for their last house in North Carolina.
The solution: They bought a 3-year-old model home.
The Mishras judged the house well-built and good-as-new, Karen recalls. So even though it had withstood a few years of foot traffic, they signed on the dotted line.
The model home begins its life as the builder’s showcase, the cabinet salesman’s sample and the architect’s prototype, all rolled into one. Eventually, though, it joins its peers down the block as a privately owned home.
Models range from modestly priced condos to high-design houses built for conventions such as The New American Home at the 2009 International Builders’ Show. The latter is an 8,800-square-foot house in Las Vegas that sold for about $3.5 million.
Should you consider buying a model home? It depends, say buyers and builders. Consider the pros and cons:
The pros
A good deal. Dollar per dollar, the model usually gives you more for your money than the same, equally adorned house down the street — except that few houses down the street are equally adorned. The builder must sell it to get it off his real estate tax roll so he is what Realtors call a “motivated seller.”
“We paid $270,000, which was $60,000 less than the list price,” says Karen Mishra. “And it has a lot of extras we wouldn’t have paid for or thought to include.”
“Absolutely, we got a good deal,” says Barbara McCandless, who bought a model town house in 2007 in Norfolk, Va., with her husband, Mike. “Window treatments, appliances and a $15,000 boat slip were included.”
Quickest route. Buying the model is one route to relatively new home, sans constructor delays. “We were new to the area and ready to buy,” says McCandless. “We didn’t want to have to wait.”
Building a new house from scratch takes months or years and taxes your decision-making skills. Today’s uncertain homebuilding market causes some builders to delay or even go belly-up before they complete their developments. But the model house is a done deal.
All the bells and whistles. The model, by definition, is the builder’s showcase. So it includes lots of add-ons.
“We got a built-in desk, finished basement, gorgeous landscaping and a gracious office with built-in shelves,” says Karen Mishra. “Except for my daughter’s room, which we painted the color she wanted, we liked the decorating.”
“It’s not uncommon for us to spend approximately $50,000 to $90,000 to decorate a 3,300-square-foot model,” says Saylor Stam of Ryland Homes, a Calabasas, Calif.-based builder that builds single-family and multifamily homes in 15 states. “It’s our living catalog, so it has all the bells and whistles.” That includes “decorator features” such as window seats that are not on the builder’s upgrade list.
If you like the furnishings, make an offer to the builder. He typically sells the stuff after the models close anyway. “We give the model buyers first dibs,” says Stam. “One single guy bought everything down to the towels on the rack.”
Familiar territory. As the model buyer, you are among the last to move to the neighborhood, so you are not the pioneer. You can see for yourself if the neighbors all use lawn herbicides, for example, or have a gentlemen’s agreement that discourages their use.
By the time you move into the model, the builder has probably turned over the reins of the homeowners’ association to the residents. By visiting its meetings and its Web site, you can learn about the association’s covenants and if their enforcement is rigid or relaxed.
The cons
The main drag. Typically the model is at the entrance of the development — good for the builder but bad for the buyer. “Ours is on the main road, so we have more traffic than we’d like,” says Karen Mishra.
In a condo building, the model is often on the ground floor, which can mean more noise, less security and a lousy view.
The McCandlesses’ townhouse is an exception to this rule. It has a desirable water view that the builder wanted to show off.
New but not new. The model home is billed as “new” by the builder but in fact may be several years old. The dishwasher may never have been used, but the flooring and walls have suffered some wear and tear from the home shoppers and the builder’s staff.
Make sure your contract with the builder includes some sprucing up. You can request fresh paint or new carpeting.
The waiting game. A builder may sell you a model before the development is sold out, but not be willing to close until he sells his last lot and the model’s job is done. This may take months.
To avoid timing turmoil, get an airtight contract that specifies dates. Otherwise, the fine print may taketh what the large print giveth.
Aging infrastructure. The model’s mechanicals — appliances, garage-door opener, sprinkler system, furnace, air conditioner — are no longer the latest and greatest. The Mishras’ kitchen appliances are black, while they would have preferred newer stainless-steel versions.
And, the mechanicals’ warranties are aging. Ryland rectifies this by extending warranties, but a smaller builder might not offer this perk.
Privacy, please. It’s hard to blend into the neighborhood when your house is forever known as “the model” to its neighbors. At least until the neighbors’ landscaping catches up, your house is the eye-catcher.
Some builders solve this problem by positioning their models one street into the development, visible from a main road but behind a string of “window lots” that they develop last. Then the window-lot homes’ fronts face into the development.
Not so for the Mishras’ house, which remains front-and-center. And the builder failed to remove it from his Web site after they moved in. “So people knocked on our door and asked to come in,” says Karen Mishra. “One man argued that he knew it was a model. No, I had to tell him, this is our house!”
