Should You Buy a Model Home?
When a new subdivision is being constructed, builders typically show a model home to prospective buyers. A model house is often filled with amenities and offered at relatively low prices, but there are downsides to consider before buying one.
Benefits of a Model Home
Most buyers of homes in a new subdivision need to wait for their houses to be built, but a model home is in move-in condition. Model houses may have granite countertops and top-of-the-line appliances to attract buyers. In some cases, the furniture is included in the deal.
Buyers of new homes sometimes find that the natural process of settling causes noises and cracks that require repairs. Those problems will have been addressed before a model house is sold.
Drawbacks of a Model Home
Sometimes builders rush and cut corners to finish the construction of model homes so they can start showing them to prospective buyers quickly. Always have a model home inspected, and find out if any complaints or lawsuits have been filed against the builder.
Even though no one has lived in the model home, it may have experienced wear and tear. Construction workers may have used it as an office, and dozens of potential buyers may have walked through and touched every inch of the interior.
Newly built houses typically come with a 10-year warranty. Model homes may have been shown to prospective buyers for months or years before being sold. That means you may not get the full builder’s warranty, and warranties on appliances may have expired. The builder might be willing to provide extended warranties.
Homeowners insurance rates are often discounted for new construction. If you buy a model house that was built over two years ago, you might not get a discount, even if no one has lived there.
Furthermore, model homes are often located near the front of a subdivision. They may be close to busy intersections, pools, tennis courts or other high-traffic areas.
Shopping for a Model Home
The construction company might have built several model homes with a variety of layouts and features. Look at them all and choose the one that’s best for you.
Sales agents represent the builder. When you view a model home, bring your own real estate agent to make sure you fully understand the pros and cons and aren’t rushed into making a decision.
The purchase contract for a model home is designed to protect the interests of the builder and may be long and complicated. Have it reviewed by a real estate attorney before you sign.
A builder may have a preferred lender and may even recommend a lender that’s owned by the construction company. Shop around to see if you can get better terms from another lender.
Think Carefully Before Buying a Model House
A model home may be in excellent condition, filled with amenities and offered at a bargain price. Before you decide to buy one, research the builder, have the home inspected and ask your real estate agent for advice.