The Pros and Cons of Buying an Inventory Home
Buying a new home is one of the most exciting and scary things you'll do in your lifetime. Making a purchase that large can feel overwhelming. As you consider your options, you'll likely focus on two choices; custom building or buying an existing privately owned home. But there's one other option you should consider. It's kind of a hybrid between these two. Builders call them Inventory Homes, Spec Homes, or Model Homes. As a builder finishes building in a community, they need to sell the home that has been showcasing their work. These homes are great opportunities and in many ways bring together the best of both the previously mentioned options. Below is a discussion of the pros and cons of Inventory Home buying.
Pros and Cons
You don't have to make all the choices! It has been estimated there can be as many as 400,000 decisions to make while building a house. What!?! As much fun as it may seem to choose paint color, counter tops, and crown molding, after decision #126,002 your head might be spinning. With an Inventory home you'd be spared that labor. Many Spec homes have upgrades that highlight the builders coveted features. Though you may not get to choose the specifics, you could see this as having a professional designer choosing for you. At no cost to you!
You don't get to make all the choices. When dreaming of the perfect home, most people have put some thought into the styles, colors, and finishes they like. You might have a list 20 pages long of things you want to make sure you get in the next home you buy. And though an inventory home may have many of those details, there are bound to be things you'll have to bend on. Maybe you were hoping for hardwood throughout and the flooring is carpet in the living room and bedrooms. You'll have to make some tough decisions. Can you live with the things that don't meet your wish list expectations? If you can, an inventory home may still be the right choice for you. In some cases the builder may be willing to throw in some of the changes you are looking for in order to make the sale. Especially if it's a home that is not quite done, but the deal fell through. Work with a qualified agent like one of our excellent agents at Simonhouse.com to negotiate with the builder for upgrades and customizations that may be possible, even in an inventory home.
It's almost brand new! No one has lived in it. It may have been a show home, but you get to be the first inhabitants. In some cases it won't even be the spec home. Builders sometimes have inventory that was custom built for a client, but something happened in the process and the buyer backs out. Builders are anxious to get these houses sold. Money tied up in finished unsold homes, means less money to invest in the next build.
It can be "gently" used. It may be the model home that has been used as the show home for a few months. Some people like to be the first and only people in their new home. With a Spec home, you won't get that. If you can keep from getting hung up on this issue, an inventory home is still a home that has never been lived in. Though there may have been a little foot traffic.
It's already built! You get to move in relatively quickly. You don't have to wait for it to be built. The custom building process can be 4- 6 months. Sometimes longer. All you need to do for an inventory home is work out the process of the legal issues and closing timeline. Depending on the situation, you could be moving in before a month is up! For families relocating, such as military or corporate moves, this is a huge plus. Not having to make a temporary move into a short-term rental while you're waiting for your house to be built is a big bonus.
It's already built. You don't get to choose where you'll build it. You don't get to decide what your view will be. The builder has chosen the lot. If you wanted that big corner lot or the house that backs up to the woods, you may have to compromise on your wish list.
The builder may be willing to negotiate bonuses. Though price may not be negotiable, the builder might be willing to sweeten the deal with other upgrades or bonuses to entice you into buying their spec home. Your agent may be able to get the builder to pay the closing costs. Or the builder may be willing to add some upgrades to the home in lieu of reducing the cost.
Not much price negotiating power. Builders don't like to offer big discounts on their new construction. It sets a bad precedence. All the homes in a community are referenced against each other to come up with comps for future sales. Lowering a price significantly impacts the builder's future pricing. When buying a home from a private seller, there's more negotiating power depending on how long it's been on the market, recent comps in the area, desperation of the seller, etc. Builders don't necessarily play by those rules.
As you can see perspective is everything. As you consider the advantages and disadvantages of choosing an inventory home, notice how the very same issue, can be both a pro and a con depending on your perspective. Many of the Pros and Cons started with the same statement, communicated from a different perspective. Depending on your lens, the same issue can either be a pro or a con. It is up to you to decide what your perspective is and decide whether buying an Inventory Home is right for you. Call us today to speak to one of our seasoned professionals to help guide you through this process.
Posted By +SimonHouses.com
Categories: Home Buying