5 Things You Need To Know About Building A Home

There’s a reason home builders spend hundreds of thousands of dollars building and designing model homes for you to walk through. It’s hard not to be impressed. It’s like walking through the pages of a high-end home design magazine. You may think you are there to look at the floor plan, which says on the sign starts at $270,000, but you’re doing a whole lot more. You’re falling in love.

You can almost smell the delicious meals you’ll be able to prepare in the gourmet kitchen with the gas cooktop and double ovens. You’re falling for the engineered hardwood floors that stretch from the front door throughout the entire first floor. You’re imagining yourself in the luxurious bath with the tiled walls and floors and “comfort height” counter tops.

Don’t feel guilty, it’s OK to fall for the house. After all, if you’re touring the model, you’re probably thinking about moving, and shouldn’t you find a house you love? There are a lot of advantages to building a new home. I’m always happy to talk about the pros and cons of buying new construction versus buying an existing house, but today, I’m giving you tips on what you need to know if you decide you want to buy a home with a production builder. A production builder is someone who buildings in a specific neighborhood and offers a limited number of floor plans. Pulte, Calatlantic, Fischer, Beazer, M/I, Drees and Arbor are all production builders. Building a production home is different than building a custom home, but that’s also a topic for another day.

building a house
building a house

If you are thinking of building, here are some things to keep in mind:

#1. Even if you’re building, you need a Realtor.

I know this sounds self-serving, but here’s the thing, the person who works at the sales office in the model home works for the builder. There are a lot of great sales people, but at the end of the day, they’re working for the builder, not for you. You are investing a lot of money in this home, and you need someone to represent your best interests. Don’t let anyone tell you that you’ll pay more for the house if you bring me, or any other Realtor, along.

When I work with buyers considering building, I like to walk through the model homes with them, so I can help provide additional information that’s often not readily available on builder websites or in the brochures that you’ll receive at the model home offices. I also can help locate other home plans that may be under construction and even suggest different neighborhoods based on what you’re looking for.

#2. Upgrades will cost you extra.

Be assured the model home you are walking through has upgrades and a lot of them. This is the builder’s opportunity to show you the options the builder offers. The model home is probably decked out. If you’ve read online that the home price starts at $300,000, chances are good, the model could be upward of $450,000 or even more. Whenever I walk through model homes with clients, I like to ask for the actual cost of the model, so we have a more realistic picture. Some upgrades most buyers don’t realize:

  • Unless you like to live in the dark and don’t care about resale value, you’ll need to upgrade lights. Most builders will include a couple of lights in the kitchen, the entry, the dining room and great room, but if you want lights so you actually can see to cook, and lights over your fancy island (be sure to ask whether the island is included, as it may be an option, too), you’ll need a light package. Also, bedrooms don’t come with overhead lights.
  • I’ve never been in a model home that didn’t have a refrigerator, but these are not included. Typically, the only thing included in the base price is an oven, a vent over the oven and a dishwasher. Sometimes the standard is white. You’ll have to upgrade to get the microwave over the stove, a cook top, double ovens or stainless steel.
  • Garage door openers. Not included.
  • Of course, flooring is included. Typically, you’ll get vinyl flooring in the hallway, kitchen, bathrooms and laundry. Carpet is everywhere else, so if you want the hardwood floors you saw in the model, it’s going to add upward of $10,000 to the size of the house.
staging to help your house sell
staging to help your house sell

#3. The lot is probably going to cost you extra, too.

You’re probably thinking: Wait, I thought the lot was included in the price of the house. Well, not really. Builders charge a “premium” for lots, and most neighborhoods have lot premiums on nearly every lot in the neighborhood. The premium is based on how desirable the lot is. Want the prime lot on a cul-de-sac that backs up to the woods? It could cost $25,000 or more extra. Another thing to keep in mind, some lots are only designated for some floor plans. A floor plan with a three-car garage probably won’t fit on every lot in the neighborhood. So, when looking at the lot plan, know which lots are available for the plan or plans you are interested in.

#4. Exterior colors may be limited.

To avoid every house looking exactly the same, there are restrictions in most neighborhoods, so houses next to each other are not identical. Often, the same elevation of a home and same color has to be at least three houses apart. It’s something you have to keep in mind as you are considering which lot you like, and the home style you want.

#5. Understand the process.

When you decide to build, understand that depending on the builder and the demand, it could take six months before your home is ready. When you sign the agreement, you’ll need to make a down payment to get started. This varies by builder, and can be as little as $5,000 or a certain percentage of the cost of the home. If you have a home you need to sell, you’ll also need to find out whether the builder will agree to a contingency on your home selling. Because of the demand for homes now, most builders won’t start digging until you are approved for a mortgage, including having a solid offer on your existing home. So, timing is important. Again, this is the value of having a Realtor helping you navigate the process for you.

There are a lot of decisions to be made when building a house. If you have questions about the process, how to get started, or whether building is the right option for you, give me a call at 317.702.0058. I’m always happy to answer questions.

Laura Musall is a full-time Realtor based in Fishers, Ind. and helps buyers and sellers throughout the Indianapolis metropolitan area, including Hamilton, Boone and Marion counties.