In the housing industry’s good old days, builder models were the first to be built in a development and the last to be sold, right before a home builder pulled down the line of colorful flags and set out for the next plot of land.
“That is so over,” said Cheryl Reid, a sales agent at Rubloff Residential Properties in Chicago. “It’s ‘let’s just sell what we have’ now.”
These days, in an effort to generate cash, satisfy lenders and then park themselves on the sidelines for a while, home builders are working with real estate agents to sell some or all of their models, regardless of whether the development is completed.
The practice is creating even better deals for home buyers around the Chicago area, although it means the next-door neighbor can be a dirt pile on an undeveloped lot. Builder models have always been considered highly desirable because, since companies use them to market options and upgrades, they come with all the high-end bells and whistles.
They also are frequently decorated and furnished professionally, and rather than warehouse the furniture until the downturn is over, builders are selling the homes and everything in them, right down to the pictures on the wall.
“They just have to bring their towels and their clothes,” said Amy Kite, a sales agent at Keller Williams Premier Realty in Libertyville. “They’re move-in ready, literally.”
That’s how empty-nesters Debbie Lichorobiec and her husband came to purchase a model town home across the street from their rental in Grayslake. They’re already eating dinner there every night, on the dishes displayed in the china hutch. Now they just need to move the television and their clothes.
The couple, transplants from Austin, Texas, with a house still there, had no plans to buy. That is until Lichorobiec spent some time in the furnished unit.
“I went over there and said I’ll take it just as it is,” she said. “It’s loaded. It’s got the top-of-the-line everything — crown molding, the top appliances, upgraded door handles. This is Christmas to me, I tell you. I was digging in the cabinets Sunday, finding stuff. I told my husband I feel like a little kid. There are even books on the bookshelf.”
The Lichorobiecs figure they saved close to $60,000, including the furnishings, from what they saw the town homes priced at a year ago.
Similar happy endings, for both builders and homeowners, are going on in other developments.
Hector Caceres, a teacher and home builder, constructed two homes in Beach Park and five in Winthrop Harbor four years ago and they were successful marketing tools for his business. But he hasn’t built a home in 11/2 years and has sold all but one of the models at substantial discounts. He plans to get back into home-building when the market turns around.
Mike Stodola, a broker associate at Koenig & Strey GMAC Real Estate in Libertyville, said he expects to see more builder models come on the market at deep discounts, and he’s had to scramble to let his own clients know about some of the properties because they can sell fast.
“These builders need cash to satisfy the bank and stay in good standing,” he said. “I’d definitely recommend that any buyers out there consider these.”
To make sure you’re getting a good deal on a builder’s model, real estate agents recommend that buyers research what kind of warranty they’re getting with the property. Some companies sell the homes as-is while others offer the same warranties as on brand-new construction, despite some model homes being three to four years old.
Buyers should also make sure that appliances are hooked up and should take a close look at floors, carpet and walls to see if any repairs or replacement are needed because of the wear and tear on the model.
A home inspection also is recommended.
Finally, don’t be afraid to ask what’s going to happen to the dirt pile next door or across the street. Some developers are grading the lots and seeding them until they’re confident enough again to build more homes, Reid said.
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