A new home today is likely to be in a new home community where one or two builders have joined forces with a developer in a particular location with a plan to build 100, 1000 or more homes over a period of years. Sometimes called a planned community or an active adult community, it may also include a clubhouse, amenities like pools and fitness centers, walking trails or even a town center. Services like grass cutting, snow removal and trash pickup are included in some communities but no two communities offer exactly the same set of services or amenities. In fact, some age-restricted communities do not include lawn maintenance while a few all ages communities do cover all exterior maintenance. Do not assume anything!
The kind of builder that you find in these communities are what we call “Production Builders”. They offer a choice of models with different floor plans designed to appeal to the taste of their target market. The large national builders have a good sense of the most popular trends and constantly update floor plans to reflect the latest wish list according to market research. Today’s most popular homes include an open floor plan with no formal living or dining room.
For our parents, the choice of new construction homes was either a custom home or a tract home which tended to be inexpensive and fairly standard. I grew up in one of those ranch homes built for World War II Veterans starting families in the suburbs. There were no Owner’s Suites or master baths. The kitchen had no island, range hoods or stainless steel. Today’s production homes can rival the features of many custom homes.
Customization vs. Personalization
Production Builders do offer opportunities to personalize your home but I have noticed they no longer call it customization. What a production builder offers is a set list of options and upgrades that allow you to personalize your home to a point. Depending on the builder, the point at which the answer becomes NO varies. With most national publicly traded builders you get to NO fairly quickly. Most production builders are what is called “per plan” builders. If the option or upgrade is shown on the plan they can do it for a price. If it is not shown on the plan, they do not do it.
Lennar is one production builder that offers no personalization at all. A home by Lennar listed for $335,000 will sell for exactly $335,000. They call it “Everything’s Included” and for some buyers that is just perfect. For every person that absolutely loves the selection process, there is another who prefers being able to see exactly what they are going to get. In the computer business we called it WYSIWYG (What you see is what you get). Almost every other production builder in Delaware offers options and upgrades that help you make their house your home.
What does it cost to personalize your new production home?
That depends. Our analysis shows that buyers can spend from 10% to more than 50% above the base model price of their new home depending on the options and upgrades available. Some of our clients ask why most builders’ models are shown with as much as $100,000 in options and upgrades. “Why don’t they show a base model home?” The builder will answer that “no one would buy if all we showed them was a base model”. My husband Bill Bell likes to answer “Can you buy a base model home? Yes. Have I ever seen anyone buy a base model home? No.” Read the article we published on New Home Pricing as well as an earlier article on Understanding Base Model Pricing.
Part II: Is it more expensive to build a Custom Home (coming soon)