What the “Starting From” Price Really Means

The advertised new home price is WRONG! Or at least very deceiving.

The "Starting From" phrase in new home pricing can be misleading

Builders advertise their homes at the BASE MODEL PRICE. When you see the ad saying, “Starting From the Mid $200s,” all this means is their least expensive model home has a Base Model price of $255,990 or so. This home will not sell for that price.

The “Starting From” pricing will be on their own website, on Zillow, and on many other real estate websites, possibly even our own, and it will be misleading. Why? Because this is only part of the story and not the final price you will pay for the home.

Advertised pricing is misleading on purpose

Why does any business spend money on advertising? A home builder advertises to entice you to come to their community and tour their model homes. The models are loaded with every upgrade and option, typically not included in that advertised Base Model price. The builder’s salespeople are employees with one job – to sell you a home in that community. They are not independent licensed REALTORS® who represent you.

It’s the same with Car Dealers. Do dealers advertise cars priced with all the luxury features you want? Of course not. They wait until you have come into the showroom and fall in love with the one on the showroom floor. You don’t find out what the true cost is until you have sat down with the Sales Manager and they know you are financially able to purchase this car now.

There is no “Buyer Agent” to help you make a good choice when you’re buying a car, but there is when you’re in the market for a new home. Watch this short video “Don’t go house hunting Unprotected”.

Each builder’s price model is different

Most new home communities today are being built with one or two production builders, each offering several different models to choose from.

Quick Move-In Homes

Production builders start with those building Quick Move-In homes that are complete when you see them and priced to sell as-is. You may be able to make minor selections but most actually buy the home as they see it. Some examples of builders who may offer Quick Move-In homes in multiple communities throughout Coastal Delaware are K. Hovnanian, D.R. Horton and Lennar. The price you see is the price you will pay. Even so, the “Starting From” pricing refers to the smallest, least expensive property.

Choose your Package

There are production builders who offer different packages. The homes are priced at the Base Model Price, but then you can pick Upgrade Package A, B, or C. When you add the Upgrade Package to the Base Model Price, and perhaps add a premium for a wooded lot or one located on a pond, you have the final Sales Price. In this type of package, you can expect the final price to be 10-20% above the advertised price.

Personalize your Home

The high-end of production builders are not “custom builders” but they offer quite a selection of options and upgrades which allow you to personalize your home. You start with a Base Model Price on a home with “standard features” and then you begin making your selections. Can you buy a “standard” home at this price? You could, but I have never seen it happen.

We get calls all the time from people saying, but I saw lots of homes online priced in the $200s or the $300s.

Builders advertise their “TO BE BUILT HOMES” at the Base Model Price.

When you work with an agent at Active Adults Realty, we will assist you with understanding new home pricing. We know all the questions, most of the answers, and we will be with you through every step of the house hunting process. Let’s talk soon.