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Buying a Home from a Builder

Home builders offer a number of ways that you can buy a new home. They can build you a custom home, sell you a “spec” home, or sell you a model home. 

custom home can be built from scratch on land that you own or on land the builder owns, or from a planned community developer where the builder has permission to build as long as the design, plans and finishes follow building guidelines. A custom home is built to the client’s specifications and the builder handles all the details from site preparation to building and landscaping, similar to the duties of a general contractor, according to Homeadvisor.com

A “spec” home is a standing home that the builder has completed to showcase their skills. Spec homes are often only available from larger builders who can carry the cost of materials, labor and bank loans. A “spec” home may have decorating choices that you don’t want. You may be able to persuade a builder to repaint or upgrade a carpet or appliance, but they won’t make structural changes. More likely, the builder will concede further discounts than tear out existing work, but only if your offer is sufficient.

model home is often used as the builder’s onsite sales office. They typically feature upgrades to show the builder’s floorplans, finishes and other skills to advantage. The builder won’t offer the model until they’ve sold all their other inventory and are ready to move on to the next development. You could get the model at a good price and with more upgrades than other homes in the neighborhood or you could pay more than other similar homes because of the popularity of the development or because of the upgrades.  

Your Berkshire Hathaway HomeServices network professional’s role 

You can ask your Berkshire Hathaway HomeServices network professional for recommendations of home builders who have the best reputations and tour their model or spec homes together. If you go unaccompanied, be sure to sign the builder’s visitor log and put your agent’s name and contact information as well as your own. Be sure to tell your agent that you went shopping for new homes and what you saw so she can research information on both the builder and the community. Remember, builders won’t pay the agent’s commission if you bring them in after you’ve already toured the model or spec home, so don’t think you can introduce them later. 

Most builders have their own contracts, which are favorable to them more so than to you. Builders won’t negotiate price because of other homes in the subdivision, but count on your Berkshire Hathaway HomeServices network professional to help you negotiate free or at-cost upgrades like adding a fence or back yard sod. They can help you negotiate better terms, help you negotiate upgrades, see you through inspections, and make sure the builder performs as expected. 

Many builders refuse to negotiate price, because of other homes already sold in the neighborhood, but they will offer upgrades on appliances and finishes or to sod a backyard. If you have a change order after all the contracts are signed, don’t expect discounts. 

Some buyers feel that if they buy directly from the builder without involving their real estate professional that they’ll save paying for an agent’s commission, but the builder will pay as long as they are informed upfront before you start looking at homes. They won’t discount the price of your home if you represent yourself.