Buying a Model Home.

Asked by Judy, Cupertino, CA Tue Mar 13, 2012

Buying a model home from the builder. is it a great buy comparing to other homes yet to be built? How to negotiate? What are the pros and cons of the model home?

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Ruth and Per…, Agent, Los Gatos, CA
Wed Apr 25, 2012
Hi Judy

It depends whether you would like to see and buy a finished product like a Model home or
to be built home. Model homes tend to be staged well, and command a Premium, as when
the Builders sells one, he has to enlist a Stager again for the next model home.

Of course the Appliances and Furnishings can be negotiated. Trust you are working with an Agent.

A model home generally sees more wear and tear, than a "to be built home". It may also
have the Best Location or the Worst location in the tract.

Also, in a to be built home you can choose, colors, floors, appliances, upgrades etc.
An excellent Realtor should be able to negotiate the price down.

Also, it may become necessary to use Builder financing as the tract builds out, and later after
over 50% of the tract is done one can then get Financing from the Open market.

Good luck.
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David Herren, Agent, Atlanta, GA
Sat Mar 17, 2012
As you can see from the answers below there are too many variables to consider when purchasing a model home to give a one size fits all answer. You really need the advise of a Realtor who is knowledgeable about yours and surrounding developments.
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Bud Zeller, Agent, Folsom, CA
Tue Mar 13, 2012
Your "Buyer Broker/ Agent" is your best resource for assistance because of single agency regulations owed to you per due dilligence, fiducary obligations, etc!
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Terri Vellios, Agent, Campbell, CA
Tue Mar 13, 2012
Greetings Judy,

Another consideration is if furniture and appliances are included what is the value of the personal property? That may need to come off the top of the contract price and possibly paid separately as your lender may not give it value and that could affect your appraisal.

If you have an agent they will be able to negotiate for you. If not understand the sales agents at the community are paid to get the best price for the builder. There is value to a buyer but how much depends on a personal level.

All the best to you.
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Christopher…, Agent, Santa Clara, CA
Tue Mar 13, 2012
Whatever you're thinking is probably correct. The biggest advantage in buying the model is you have a chance to see the finished product and can get an accurate sense of how the space works with furnishings and decor. If it appeals to you, it's probably right for you.

On the other hand, buying the model limits or eliminates options with respect to finish materials and design unless you are willing to invest in alterations. Again, if it works for you already, it may be the right home.

In terms of negotiation, the builder and you are at the whims of an evolving market. The current price of the existing model should reflect the current threshold of what the builder thinks he can get today leveraging the emotional pull of a finished, staged, move-in condition home. By the time the future builds are done, if unsold at the time, they will fetch market level pricing, which will be more or less than the model home price. No one can predict the future but the current value trend in our better Santa Clara county markets is moving upward.

Your biggest consideration is knowing your alternatives and timing. In other words, If you've looked at enough inventory to know, in the current window, you cannot get something bigger and/or better for the same price and the move-in date works for you, do the deal.

If you want a better price, ask. The builder will say yes or no, based on what they think their alternatives are. If the project is selling fast and/or the builder is financially healthy the probability is lower they will move on the price. There are other factors as well but those are the main ones.

Savvy negotiators know how to have conversations which uncover factors they can leverage in a price negotiation. If you want a good deal, more times than not, you can get there by working with an experienced real estate agent who you like and trust and who can demonstrate real skill in representing their clients. Find one of those and you should be fine.

Chris Hawkins
Intero Real Estate Services
Los Altos Office
(408) 568-8123
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Grace Hanamo…, Agent, Cupertino, CA
Tue Mar 13, 2012
Hi Judy and thanks for your post.

Typically, a model home has three specific things going for it that you might consider:

1. Better location and a slightly bigger lot (in most instances, although not always). If this is the condominium, then there is no lot size.
2. All of the available options and upgrades are in the home
3. Decorator interiors and colors and appointments (many of which are NOT available to buyers of other units in the community)

Now the downside...

1. About a million people have trampled through the home, opened and banged doors, tried out everything, leaned on raining, put handprints on walls, flushed toilets, etc...
2. It's the "oldest" home in the community (models are built first, so they are actually older than the other homes that were not constructed until after the sales contract was formed)
3. When you think about it, model homes are hardly "new homes" in today's market where selling a community can take more than a year to complete.

So, my suggestion is that hopefully you're working with an experienced new homes Realtor to represent you. This person may be able to make a deal on the home, but if there is still a great deal of interest in the community, the ability to negotiate may be severely hampered. If you're doing all of the negotiations, you should be able to negotiate repainting the interiors, replacing some carpeting on places like the stairs or refinishing worn and damaged floors, but beyond that may be difficult.

Good luck! Work with a Realtor to help you. If you have already gone to the community without a Realtor, then you will, in most cases, be unable to bring an agent into the transaction now.

Grace Morioka
Area Pro Realty-People's Choice
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Mike Contini…, Agent, San Ramon, CA
Tue Mar 13, 2012
Buying a model home can be a great thing. Generally the home is fully upgraded with all the extras that you may not get in one of the standard homes. The only negative I can think of for buying a model home is that there have probably been a lot of people that have viewed the home so there may be slight wear and tear on the flooring and cabinets.
There is always room to negotiate price. If you are working with an agent they should be able to help you with that process.

Mike Continillo
Villa Properties
Cell: 925-519-0794
Fax: 408-557-0364
DRE License #01479723
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Thomas Feng, Agent, Cupertino, CA
Tue Mar 13, 2012
Hi Judy, to answer your question it is not a great buy when compared to other homes.

The reason for this is that when most people buy new construction homes they like to customize what goes into the home. When you buy the model home you are buying what is already there and not creating it yourself. Some home builders will allow you to change some things but probably for a fee.

Negotiating on a model home is not always possible as well. It depends on the demand just like when you bid on any home from a seller. If they have multiple offers you probably will not be able to negotiate the price down.

If you are thinking about buying new construction homes check out my blog on the common pitfalls when buying new construction at…

My Santa Clara home buyers blog also features weekly real estate news, weekly new listings photos, school info, and weekly market reports!

If you have any questions give me a call at (408) 840-3852 or shoot me an email at
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