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SELLERS; IF YOU WANT IT, ASK FOR IT!

SELLERS; IF YOU WANT IT, ASK FOR IT!

“Ask, and it shall be given unto you.”  –  Jesus Christ

There’s nothing more frustrating to a ready, willing, and seemingly able buyer than to lose an offer to another buyer — especially since the seller was not specific (down to the letter) about what he expected to receive.

Sure, there’s the list price; but in today’s fast-paced market, a buyer/ prospect may offer thousands more than the list price and STILL not be the lucky buyer who gets the property!

That’s why sellers should be as specific as possible with buyers in what they want to receive and achieve in a successful offer.

Let’s tackle the major elements the seller should be prepared to address with serious buyers. I suggest that sellers (or their real estate agent) prepare a “Suggested Contract Requirement” sheet to give to buyers, outlining what they expect in the following:

Loan pre-approval
By now, it should go without saying that buyers without loan pre-approval shouldn’t be competing in the current market; but sadly, some are. That’s why it’s important for the seller to specify that buyers be pre-approved for loans ample enough to fund the purchase price, AND detail the type of loan and respective costs (if any) the seller would cover.

For example, a buyer might claim to be pre-approved for a mortgage of “x” amount. What she fails to disclose, however, is that it’s Veteran’s Administration (VA) financing and she expects the seller to cover her two discount points. On a $140,000 sales price (with zero down) that’s a hefty $2,800 for the seller.
Or what about the buyer who claims to have “cash” coming to him to fund the purchase (often coming from proceeds of an estate or settlement of a law suit.) The buyer’s funds are delayed. In order to close the sale, he must borrow the money, causing the seller a three-week delay in accessing his proceeds. Verifying the buyer’s funding (which is tougher to do in a “cash” sale) is vital for sidestepping potential delays for the seller.

Earnest Money
In the old, slower school of home buying a decade or more ago, buyers would offer a meager amount of earnest money or even a post-dated check with the idea that they could always up the ante if need be. In today’s market, more (rather than less) earnest money is advised in most situations. Not only does it subtly signify to the seller how financially motivated a buyer is, but can serve as a buyer’s first (and often only) shot at a strong first impression to the seller.
By letting prospective buyers know (in writing on the “Suggested Contract Requirement” sheet) the minimum amount of earnest money the seller is seeking, it places a strong buyer on equal footing with competitors. It also gives a heads-up that if you want a stronger foothold with the seller in this area, exceeding the suggested minimum amount is certainly in order! If a buyer structures an offer to include minimal contingencies like obtaining financing in a certain amount and the property appraising for at least the sales price, etc., earnest money would be at little risk of loss.

And what about contingencies? Should a seller require that buyers make all offers free of positively all contingencies if they’re serious about the property? Hardly. But keeping contingencies to a minimum (as we’ll see in Part II of this article) definitely gives buyers an added advantage over their competition and results in a smoother sale for you as a seller.

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IF YOU ARE A “FOR SALE BY OWNER” THEN YOU NEED TO KNOW THIS!

IF YOU ARE A “FOR SALE BY OWNER” THEN YOU NEED TO KNOW THIS!
“He is happiest, be he king or peasant who finds peace in his home.” –  Goethe

Many homeowners believe to maximize their home sale they should sell it themselves. At first glance, they feel selling a home is simple. Why would they pay a broker free for something they could do themselves? In fact, close to 25% of all the homes sold last year were sold For Sale by Owner (FSBO).

However, close to half of the FSBOs said they would hire a professional next time they sold. Thirty percent said they were unhappy with the results they achieved by choosing FSBO. Why?

Many FSBOs told us the time, paperwork and everyday responsibilities involved were not worth the amount of money they saved in commissions. For others, the financial savings were even more disappointing. By the time they figured the fees paid to consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing, advertising, they would have been better off to have paid the broker’s fee that would have included many of these charges.

Selling a home requires an intimate understanding of the real estate market. If the property is priced too high, it will sit and develop a reputation for being a problem property. If the property is priced too low, you will cost yourself serious money. Some FSBOs discovered that they lost money as a result of poor marketing decisions. In the final outcome, this far outweighed the commission they would have paid.

Before you decide to sell FSBO, consider these questions and weigh the consequences of assuming the responsibility versus employing a professional. A little time spent investigating now could pay off tenfold in the end.

Questions To Consider

  • Do I have the time, energy, know how, and ability to devote a full forced effort to sell my home?
  • One of the keys to selling your home effectively and profitably is complete accessibility. Many homes sit on the market much longer than necessary because the owner isn’t available to show the property. Realize that a certain amount of time each day is necessary to sell your home.
  • Am I prepared to deal with an onslaught of buyers who perceive FSBOs as targets for “low balling”?
  • Another challenge of selling a home is screening unqualified prospects and dealing with “low ballers.” It often goes unnoticed that much time, effort and expertise is required to spot these people quickly. Settling for a “low ball” bid is usually worse than paying broker commissions.
  • Am I offering financing options to the buyer? Am I prepared to answer questions about financing?
  • One of the keys to selling, whether it’s a home, a car.. anything, is to have all the necessary information the prospective buyer needs and to offer them options. Think about the last time your purchased something of value, did you make a decision before you had “all your ducks in a row?” By offering financing options, you give the home-buyer the ability to work on their terms. You’ll open up the possibility of selling your home quicker and more profitably. A professional real estate agent will have a complete team for you to profit from… lenders… title reps… inspection companies… they’ll be completely at your disposal.
  • Do I fully understand the legal ramifications and all the necessary steps required in selling a home?
  • Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your state’s disclosure laws. Are you completely informed of all the steps necessary to sell real estate? If not, you may want to consider consulting with a professional.
  • Am I capable of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented?
  • Ask yourself: “Am I well-versed in legalese? Am I prepared to handle disputes with buyers?” To avoid any disputes, it is wise to put all negotiations and agreements in writing. Many home sales have been lost due to misrepresentations of what was negotiated.
  • Have I contacted the necessary professionals… title, inspector (home and pest), attorney, and escrow company?
  • Are you familiar with top inspectors and escrow companies? Don’t randomly select inspectors, attorneys, and title reps. Like any profession, there are inadequate individuals who will slow, delay and possibly even cost you the transaction. Be careful!

My hope with this report has been to educate you and help you avoid the pitfalls many FSBOs go through. I hope you found the ideas valuable and if there is every any way I can be of service to you or anyone you care about, please contact my office. Your initial consultation is always completely free and you’re under no obligation of any kind. I’d love to hear from you!

Sincerely,
Jocelyne Grandjean-Brown
RE/MAX Professionals
352-870-9929

WHAT EVERY NEW HOME MUST HAVE

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WHAT EVERY NEW HOME MUST HAVE

“He who asks a question is a fool for five minutes; he who does not ask a question remains a fool forever.”  –  Chinese Proverb

Are you thinking of building your home? There is something you are going to need whether you realize it or not, because every new home has to have one – a building plan. Did you know that you can pick and choose your own set of plans, quickly and easily, using the Internet?

Building plans are typically found in home magazines, but now you can go to a new site, Allplans.com, and find the largest database of home plans in the country. Boasting over 15,000 building plans, with over 24,000 more plans to be added over the next six months, Allplans offers home plans directly from the nation’s top home designers, the same designers and plans that the custom and volume builders use.

Picking your own plans assures that you and your builder will build the home you really want. If a builder buys a set of plans, he or she can use the same set of plans to build the same home dozens of times. The advantage for the builder to use the same plans over and over is that he or she can estimate and control costs more easily and repeat the best ways to finish out the plan’s idiosyncratic details. The advantage of using the builder’s plans is not as good for the home buyer.

When you choose from among your builder’s inventory of plans, you have less inventory from which to choose. You may also see your home again and again in the same subdivision or town. That could spoil the fun in owning a custom-built home, or a customized volume-builder home.

Using your own set of plans won’t cost you any more money as far as the builder is concerned, so there’s no reason not to pick out your own plans. “About 80 percent of home plans sold are to individuals,” says Ron Lester, marketing director for Allplans. “and 80 percent of those plans are sold to women. Women control the pocketbooks and they are also typically the design person of the family.”

Allplans.com is the brainchild of Bob Chatham, owner of Chatham Home planning in Mobile, Alabama. He and his staff realized over two years ago that there was a growing shift of buyers seeking information about new homes toward the Web. The company digitized the plans they already had on hand, and promoted the idea to other designers. The site has a partnership with the American Institute of Building Design’s (AIBD.) and offers home plan digitalization services to the organization’s 1,400 members. Allplans.com is now the go-to site for independent access to the top home designers in the country, which number approximately 6,000 nationwide.

Home plans are easy to search at Allplans.com. The inventory is not organized by designer but by the type of home, such as Colonial, Contemporary, Traditional, or Tudor; square footage; number of stories, and; number of bedrooms and bathrooms. The site guides you to homes of your interest level, and then if you find the plan of your dreams, you can buy it online. The plans are overnighted for next business day delivery.

Note: Before you buy home plans, be sure to show the plan you have in mind to your builder online, so you both can make sure that the plan suits your building site as well as the building specifications of the division or neighborhood where you will be living.

WHAT DID I FORGET TO CHOOSE FOR MY NEW HOME?

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WHAT DID I FORGET TO CHOOSE FOR MY NEW HOME?

“Bureaucrats: they are dead at 30 and buried at 60. They are like custard pies; you can’t nail them to a wall.”
– Frank Lloyd Wright

An upgrade #5 carpet with a #2 pad. Some extra telephone and TV outlets. The den option with the double door entry. The list goes on and on. You have just completed the upgrade selection for your new home and feel pretty good about it. The option list given to you from the builder’s design center looked thorough enough, and you just plowed through it, choosing everything from flooring, to plumbing to electrical enhancements.

Once the builder has started on the house, he informs you that it is too late to make changes, except at a big non-refundable expense. Your builder has budgeted out his costs and everything has been ordered. But are there any upgrade choices the builder’s representative didn’t present because you forgot to ask about it? It seems as if this is every home buyer’s worst fear when selection time is over. Suddenly all kinds of advice and new ideas come pouring out from well-meaning friends and relatives.

If you have exceeded the cut-off times for adding anything more to the house at this point, there isn’t too much you can do. This advice, then, is for those thinking of going down that home buying path, but haven’t made their final decisions on upgrades. There always seem to be some upgrades and enhancements that can be added to your list that the builder may not offer you because, although they may be available, the builder does not have them as standard, pre-priced options.
The most common items I can think of that get overlooked by buyers and design center personnel alike are items that aren’t visually evident in the home. A biggie is insulation. Ask your builder about the thickness of the insulation they use in walls and between floors. If noisy living areas are not far from bedrooms, you may want to inquire about upgraded insulation to muffle the sound. Insulation is also important to energy efficiency. Is the new home a model of energy efficiency, or is there more that you can do through the builder to improve it?

What exposure is your new home? If one side of the home will experience brutal sun exposure, is there something you can do to add tinted or higher grade windows to that side, such as triple paned or the new “low-e squared” glass? What about more doors to the backyard, or a French door off the master to a deck or balcony? When asked, builders may be willing to add them or at least put in headers over windows that can be used for door openings later on, when the “hole in you pocket” syndrome is behind you.

And then there are what we in the industry lovingly call “pre-plumbs” and “pre-wires”. These are builder preparations for systems you intend to install later on. Pre-plumbs can be stubs for gas log-lighters in your fireplace, Jacuzzi tubs, central vacuüm systems, or a utility sink to your laundry room or garage, to name a few. They remain as behind-the-wall goodies you can use when you wish to add the full system later on. Pre-wires are for electrical enhancements for later on. An extra garage door opener, speaker wire in your family room ceiling, an intercom, or a security system.

Some buyers don’t think in terms of “extras” with some items they choose and regret it later on. A larger fireplace, more burners on the cook top, extra cabinets in the laundry room, more fans in bathroom areas, more security lights in the backyard, and even an outlet for Christmas lights in a place you don’t have to risk life and limb to get to, for instance.

Although new home builders have finally started to offer extra “flat work” (extra concrete for walkways or patios) to buyers, design center personnel may not be the experts in suggesting or designing it, so it may be something you have to inquire about. It’s not that the builders don’t want to make more money by permitting you to add these things; they sometimes don’t present them as part of their normal option package. What happens, all too often, however, is that by the time a buyer thinks of adding them, it’s too late in the construction process.

There are few buyers I have met that haven’t thought of something they would have added when choosing their options and upgrades, if they had the chance to do it over again. My advice would be to become the squeaky wheel when you are about to make these important decisions. Ask the sales person to give you examples of what others in the neighborhood have chosen for their new homes that isn’t evident on the builders’ standard option list. Then make a list of all the “behind the walls” additions you may want to opt for to take with you on that confusing, but exciting trip to the design center.

WHAT YOU CAN LEARN FROM YOUR NEW HOME WALK THROUGH

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WHAT YOU CAN LEARN FROM YOUR NEW HOME WALK THROUGH

“Change your thoughts and you change your world. “ – Norman Vincent Peale

Boxes are packed; utilities are all arranged, and the moving van will pull up in a few days to transport your worldly belongings to your brand new home. There are a number of formalities to deal with, however, and once they’re out-of-the-way, you’re “home free”, so to speak. After all, you have watched this home go up stick by stick, delighted in that special warm beige Berber carpeting being installed, and have a tough time sleeping these past few nights because of the intense anticipation of the move.

Aside from the escrow appointment to take in the remainder of your down payment and record title, making it “official”, you are about to participate in the walk-through, or new home orientation, as many builders now refer to it. The builder may have given you literature explaining how long it takes, its purpose, and how they return afterwards to make touch-ups and corrections. What they may fail to hit home with, however, is the immense importance of this tour as a learning tool for you as you spend the next odd number of years of your life there. Getting the most from your new home orientation can take some planning and research; viewing it as a mere formality may see you regretting taking it so lightly someday. This is usually your last opportunity to have uncompromised time with the builder itself, whether dealing with the superintendent in charge of having your home-built, or a customer service quality-control representative. And since there is such a large investment at stake, why not look upon it as important as most other major events in life that prepare you for the future?

View this event as more than a hunt for hairline cracks in drywall, unpainted trim and crooked moldings. It’s important to remember that a new home is a handmade product, touched by literally dozens of individuals before its completion, making it an inexact science. As they say, nothing is perfect in our physical world.

First, see if it is possible to get a copy of the builder’s warranty book ahead of time. This is not a common request with many builders, so it may take some prodding through the builder’s salesperson. Telling them that you want to study it so that you are prepared for the orientation may make them less defensive.  Then, peruse it for a while, noting what items are included in the builder’s structural claims, and what warranties expire well before the ten years or so the builder is “on the hook”, so to speak, for the big stuff.

On the day of the orientation, take a clipboard and even a video camera if you must, to document and to learn about the care and maintenance of your new home, and use the manual to give you insight into what to ask about during the orientation. For instance, what does the builder say about the windows that have been installed? Dual-paned windows are oftentimes replaceable indefinitely through the manufacturer if the gas seal is compromised between the panes and moisture gets in. Other products in the new home have stated one-year warranties through their manufacturers. It’s important to note that many products that are installed within your new home carry individual warranties that are passed on to you when you close escrow. Failing to fill out and send in applicable warranty cards, as tedious and unpleasant as it may be, may cause you heartache in the future if something goes haywire. (Check to see if many of these manufacturers have on-line warranty registrations now, as this process may not be as unpleasant as filling out cards.)

There may be a list of items that the builder will be returning for over the period of the next few weeks or so. Most builders want to get this part over with, so they will schedule the work to be done as quickly as possible. If you miss an appointment to be on hand for a repair, it will be your loss if the builder’s schedule is now booked up for weeks to come for a return visit. Instructions regarding maintenance are among the most important parts of this meeting. Care of floor surfaces, how often to change heating and air conditioning filters, how to keep standing water away from the foundation of your home and maintain the builder’s original grade, the importance of sealing grout in tile areas, and warnings about disturbing insulation in crawl spaces; all these and more prepare you for the future, helping to keep your home “new”, preserving its value. Using your thermostat setbacks for efficient energy savings is important to your pocketbook, no doubt, and the care and use of your fireplace may help it serve you better for many years to come.

Common sense definitely comes into play here; builders are oftentimes called on to the scene to unclog toilets only to find foreign objects have been stuffed down them. After your own orientation, it may be advisable to conduct your own “kid” orientation, instructing your children on what constitutes “abuse” of your new home and how to respect it as well. Apart from the warnings about appropriate toilet functions, giving an elementary course on how to properly use systems and items installed in your new home may go a long way in eliminating future warranty and expensive repairs calls.

In the longer scheme of things, buy a special “house” calendar and folder, and mark down important dates for warranty follow-ups and regularly scheduled maintenance. If your builder has given you paper work to be filled out quarterly for the first year, mark down when it needs to be faxed or mailed by. Write down workmen’s appointments, and keep copies of warranty follow-up paper work with the calendar, noting the work that was done, assurances made, and items still on order for replacement. Note when manufacturer’s warranties were sent in and take copies if you can.

Take this appointment to learn about your new home as seriously as you would learn from a physical examination. Get a relative to watch the kids, tell friends and family members that they are welcome to visit at another time, and take more than the customary amount of time off work for it.

It’s safe to say that you will get from your new home orientation what you are willing to put into it. Seeing yourself and the builder of your new home as “partners” in this process will help eliminate finger-pointing when emotions are high before, during, and after the move.

SETTLING IN: PRE-MOVE POINTERS FOR TAKING STOCK

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SETTLING IN: PRE-MOVE POINTERS FOR TAKING STOCK

“Even a minor event in the life of a child is an event of that child’s world and thus a world event.” – Gaston Bachelard

Despite all of the hassle moving represents, when the anxiety is gone and the dust has cleared, most of us have to admit that it’s a liberating experience. It forces us to rid ourselves of the clutter accumulated in the house we’re leaving. Whether or not you buy new furniture for your new residence, the motions of packing up and heading for different surroundings is a positive experience for most movers. It’s an opportunity to start over.

Before you move, it’s a good idea to take inventory of your belongings and consider what place they’ll have — if any — in your new home. After all, when you moved into your current home, your family’s needs were different. Since then, its occupants have become older, hobbies have been abandoned, tastes have changed, and now, suddenly, items you once thought you’d die without don’t seem that wonderful anymore.

* Taking stock of your furniture is a good place to start; after all, if you decide to get rid of a piece or two, you can save yourself the considerable expense of moving them. In addition to your furniture, take a good look at your lamps, rugs, pillows, and other accessories — particularly the ones you’ve stored away for months — and decide whether they really reflect your tastes anymore. Some of them may serve little purpose other than to clutter your closets and collect dust. Rid yourself of them, while reminding yourself that everything you pack means more boxes, more packaging and labor costs, and more to unpack later.

* An effective strategy is to draw on paper the floor plan of your new home. Sketch in the designated spots for your furniture, making sure you’ve noted where such obstacles as fireplaces, windows, built-in shelves or desks, etc., are located. Remember where your electric outlets, telephone jacks, and television hookups are located, and make sure you’ve considered the direction in which your doors open. If you’re looking for a more exact plan, with square footage taken into account, take a note from Better Homes and Gardens Online, which suggests using graph paper to draw your rooms to scale. Each square translates to one foot of available space.

Here’s where your creativity takes over: After measuring the size and shape of each major piece of your furniture, draw them on graph paper using the same one-square-per-foot scale as you did for the rooms in your new home. Then cut the shapes and arrange your miniature furniture within your various room floor plans. Once you’ve made a decision about what suits you and where, attach the shapes onto the page.

While this process requires a little patience and a little more creativity, planning ahead enables you to avoid either moving heavy furniture yourself, long after the movers have left; or having your movers pause upon entry into a room, shouldering a heavy load as you decide where that 300-pound dresser should be placed. (Of course, you’d be lucky to find such a tolerant mover.) You’ve got a plan of attack that makes your life and your movers’ lives easier. You can point them in a direction and move on to the next item. The bottom line is that you’re paying by the hour, and a little sketching and cutting now will save you labor costs later. Take the trouble to draw only your major pieces of furniture; your smaller items and accessories can be placed anywhere for now, until you have time to consider the perfect spots for them.

This strategy also allows you to experiment with various arrangements that you may have considered in the past, but abandoned because it seemed like too much effort to pursue. And trying out new configurations is a consolation for not being able to purchase new furniture. Even if you’ve resigned yourself to a sofa that doesn’t thrill you anymore, arranging your furniture in a different manner may provide you with a completely new outlook on belongings that once seemed tired. That variety, combined with a new place of residence, is bound to inspire you. And don’t restrict your furnishings to the rooms in which you’ve traditionally placed them. For example, the chest of drawers sitting in your bedroom might look even better in your new living room. This move is your big chance to experiment — and you don’t even have to move the furniture yourself.

And while you’re laying out your plans on graph paper, you might want to determine the focal point of each room first — a fireplace, a large window, anything that grabs you when you first enter the room. Then arrange your furniture around that focal point. And while it’s a given, it’s well worth repeating that you should consider how each room is going to be used before you design its layout. For example, when you’re planning your living room, if you plan to spend a lot of time entertaining there, you’ll want to place chairs and/or sofas close together and provide plenty of walking room, as well.

After you’ve taken inventory of your current home, take stock of your home-to-be, starting with the kitchen and its appliances. With any luck, you’ll have ensured that all of those kitchen appliances are in good, safe, working order long before your move. Make sure the hot water system is both working and the correct size for your family’s needs. If the answer to either of those questions is no, replacing the unit will save you both considerable energy and money. Then investigate your new home’s heating and cooling system, which is going to represent a predominant percentage of your monthly energy expenses. To figure out if it’s running in top condition, determine the Seasonal Energy Efficiency Ratio (SEER) rating for your air conditioning and heating unit. The higher the SEER rating, the more efficient the system. A rating under 8 is considered relatively inefficient. Also check your ductwork to ensure that its size is appropriate and that it’s clean. Finally, make sure your thermostat and controls are operating correctly.

Home owners often forget that clothes washers and dryers eat up energy, particularly when stackable units are involved. Because users can’t fill them with much clothing, they’re forced to run more loads though the units, resulting in increased energy consumption and subsequent expenses. On the other hand, units that are too large may use excess water or heat. Regardless of the type of unit in your new home, make sure that the washer drains properly and that your dryer is vented out of your home.

And speaking of energy consumption, study all doors, windows, vents, and other passages to the outside for cracks. If you see any gaps or if you feel any air streams, seal them either with caulk or weather stripping. And check your windows to find out if they’re double-paned and fit tightly.

Finally, if you can’t paint your new home’s interior prior to your move-in date, don’t unpack until you do. And be sure to consider the direction of light in your home — where it hits the walls and the shadows it creates. Painting your dining room a deep shade of forest green, for example, could backfire on you if your lot is heavily treed, or if the room generally doesn’t receive much sunlight. The color that seemed vibrant in the can may leave you simply depressed once it’s covering the walls of an already dark room.

Written by Courtney Ronan
May 27, 1998

SHOULD YOU PURCHASE A MODEL HOME?

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SHOULD YOU PURCHASE A MODEL HOME?

“People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their other talents.” – Andrew Carnegie

Ever noticed how even the most palatial home can look, well, vanilla when there’s nothing inside of it? Turning an empty home into a model home can turn a “maybe” into a “yes” in no time at all. The problem is, it’s easy to become intoxicated by a model home. A professional interior decorator has worked his or her magic. The drapes are perfect. The French impressionist artwork on the walls perfectly matches the color scheme in that overstuffed chair upon which no shedding dog has ever set foot on. The immaculate white carpeting has no Kool-Aid stains. Toys don’t litter the stairwell, and a week’s worth of newspaper isn’t strewn haphazardly on the kitchen table. Wow … from which strange alien planet do model home families hail? It’s as if the Neat-Home Fairy waved her magic wand and erased reality. So you find yourself asking that question: “How much for the furnished model?”

Is buying a model home such a great idea? Yes, sometimes … and sometimes no. Model homes are, of course, professional decorated with all of the trappings that lure prospective buyers just like yourself. They also contain extras like professional landscaping, wood floors, shelves, perhaps a converted garage for a game room. These are the extras that make you want to buy a home just like it. The problem is that the value of the model exceeds the non-models, which don’t contain any of these extras. The garage is a garage, the front yard is bare, the shelves aren’t there and the wood floors are vinyl. The big question is: Are you going to have to pay big bucks for the extras in this model home? That depends on market conditions.

If, for example, the market has slowed down considerably, and the development in which the model home is located is nearly sold out, the builder may be willing to strike a deal with you. If that’s the case, you may be in for a great deal — scoring extras like upgraded plush carpeting, wood floors, shelving, even an extra room — for almost nothing. In fact, many of the extra amenities that make model homes so desirable can be written off by the builder as “expenses.”

Depending upon market conditions, the builder may or not may not choose to pass those expenses along to the buyer.
But, as with any other home purchase, take off your rose-colored glasses when you’re considering a model home. You’ll need to find out some background information on the builder. Is the company reputable? Do you have any friends or family members who own homes constructed by this builder, and if so, would they advise you to buy or to run fast? Even if the builder has a good reputation in your area, the model home you’re considering may be a “test model”.  In other words, the home may be the first plan of its kind for the builder. The company may have tried new construction techniques or features in this model home that they’ve never experimented with before, and if so, you’ve got to consider that those “experiments” may or may not have been wise decisions.

While you’re touring the model home, you, as a prospective buyer, should hold it to the highest standards of quality. Scrutinize details, such as cabinet construction. For example, are cabinets crooked? Open and close the doors to make sure that they do, indeed, open and shut. Do you notice any shelves that slope down the wall slightly? These are signs of sloppy and hasty construction, and they should be red flags that this is not a wise purchase, no matter how low that builder is willing to go.

You’d also to be wise to consider that the home you’re considering is, in many aspects, a “used” home. Many people have walked on the carpeting, tracking in dirt and mud; the wood and linoleum floors may be scuffed or chipped; the paint covering the walls may be scuffed; and the air conditioner or heating unit may be broken after being on nearly 24 hours a day during open houses. Keep in mind that some open houses have been open not for months, but for years, meaning that the home may be exhibiting signs of damage that only a very careful inspection could reveal. As you walk throughout the model home, keep a running list of any signs of disrepair you spot. Talk to the builder about these items, and determine his or her willingness to negotiate the cost of their repair. The builder may offer to cover some of the repairs and not others — for example, offering to have the carpet professionally cleaned, but the job of repainting the walls would be left up to you.
Before you sign anything, ask to see warranties for all appliances included in the home — air conditioner and heater, refrigerator, washer and dryer, security system, etc. And perhaps even more important, find out when the builder’s warranties expire for construction. This is critical because some builders offer workmanship warranties that begin upon the conclusion of construction, not from the date of purchase. If the model home has been open for years, and then you purchase it, you may be covered by the workmanship warranty for a mere month before it expires. Attempt to negotiate with the builder if the warranty started at the end of construction. Again, if market conditions have slowed considerably in the area and the builder wants to sell the home badly enough, you may be able to hammer out a mutually agreeable deal.
And, of course, before you sign on the dotted line, ask yourself if you’re buying impulsively — based on those fancy drapes, that white carpeting and the new-paint smell. Have you done your homework about the local school system? The neighborhood in which the home is located? What this new home would mean for your daily commute to work? All of those factors have a profound effect on your family’s quality of life.

If everything meets to your satisfaction, you just may have found the home of your dreams. If not, then you’ve saved yourself from an impulse buy that could have tied you and your family to a money pit. Consider yourself a smart shopper, and keep house-hunting.

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