A Homebuilder's Theme Park
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Ever wonder what the difference is between an upgrade and an option? Not all builders offer the extra amenities we’ll mention here, but we can use them to distinguish terminology and give you an idea of what some of the most comprehensive builder design centers offer new home buyers these days.
An upgrade is a better quality or higher-echelon version of what the builder already offers included in the price of the house. For example, the builder may include a dishwasher --not the top of the line by model or manufacturer, but not the rock-bottom entry level variety, either. If you’ve always dreamed of the slick drawer-type dishwasher camouflaged by matching cherry-stained kitchen cabinetry and the builder offers it -- you’ll upgrade. This means that you’ll customarily receive a credit for the builder’s cost for the included item which will be applied to the cost of the upgrade, but don’t expect to do back flips over your credit amount…. The same would be true with the included sink, cabinets, faucet, stove, and oven, among other upgraded choices you’ll make for your new kitchen.
If the master bathroom includes a separate stand-up shower stall and a tub, your upgrade possibilities might take the form of dual shower heads, a jetted tub and a fancier shower enclosure.
Some other upgrades might be for surfaces on:
• floors (carpeting, hardwood, laminates, marble, tile, vinyl . . . )
• walls (custom paint, wallpaper, crown moldings, tile surrounding the shower instead of the integrated cultured marble surrounds or fiberglass offered as included in the price . . . )
• countertops (tile, quartz, granite, stone . . . )
• cabinetry (more unique hardwoods, painted, distressed wood, planking, built-in organizers . . .)
Options are items that don’t exist in any form within the base price of the house but can be added by the builder. This might mean architectural options, such as:
• an upstairs loft instead of the included third or fourth bedroom
• a home office, den or exercise room instead of a third stall in the garage
• an upstairs bonus room instead of a high-volume ceiling over the dining room
• a “casita” or pool house in the backyard
• a master retreat with its own fireplace
• a coffee bar in the master suite
• a butler’s pantry
• an observation deck or balcony
• a covered porch
• an outdoor kitchen setup
• a sport court, pool, hot tub, decking or patio
• exterior stone, brick or stucco accents
• door options both inside and out, including the garage door
There are electrical and plumbing options as well. Among the electrical options offered may be:
• more electrical outlets in each room and/or/ the ability to change planned locations of each
• extra lighting under kitchen cabinets, recessed lights in specific locations or to highlight art work
• automatic garage door openers
• a security system
• a home theater
• a built-in vacuum system
• additional outdoor electrical (covered) outlets for holiday lights or outdoor kitchens
• An interior electrical panel if the builder’s standard location for this is on the house’s exterior
• Structured wiring for computer networking, security, high-speed internet, telephone and anything else they can think to include
• higher voltage outlets for power tools in the garage or workshop area
• surround-sign wiring behind walls or for whole-house speaker additions
• more cable outlets for television or Internet use
• overhead lighting or ceiling fans
• HVAC (heating, ventilation and cooling) options such as zoned equalizing systems, multiple thermostats, remote controls, summer switches, and whole-house fans
• a utility tub in the laundry room or garage
• a bidet in the master bath
• a jetted tub or stand-up Jacuzzi in the master bath
• more appliances or fixtures than come standard in the kitchen, such as a food warming drawer, a wine cooler, a vegetable sink, an instant hot water tap, a trash compactor or a built-in refrigerator
Enough to consider so far? That’s why it’s best to have a plan.
In order to avoid the feeling of being flat-footed when you walk into the builder’s design center, sit down and make the list we mentioned earlier. Prioritize, prioritize, and prioritize!!
First see if your salesperson can get you the most updated list of selections you’ll be seeing at the design center so that you can study it ahead of time. Then use highlighters in different colors to separate “must-haves” from “possibles” to “maybe-someday” items.
Start with the architectural options. If the builder’s base price for the floor plan you’re buying doesn’t include the exterior stone accents you fell in love with when you first pulled up to the models and you know you have to have them, begin there --with the outside. Is there anything about the exterior of the home you’ve got to have that will cost you extra? Like windows in the garage door? Or dual front entry doors? Or custom accents (like brick borders or stamped concrete) added walkway or driveway? Some builders offer these and some don’t, but ask about them if they interest you.
In terms of the interior, you’ve probably already decided on the architectural options you’ll choose – such as the number of bedrooms, home office space, a bonus room, or a third-car garage option. But if they’re extra, they are usually the biggest ticket items to be added to the builder’s base price.
If you’re on the fence about a few things, get “future-creative” with already-included architectural items you might be able to live with for now. For instance,
• A bedroom can easily be used as an office or prepared to be transformed into one later on with a little extra electrical enhancement thrown in. Those closet doors? You can store them in the garage after the appraisal takes place (appraisers give more value to bedrooms than dens or offices) and use the closet space for desk or shelving placement.
• Consider investing in an extra room in your floor plan so that you have room to grow even if you see no reason for the additional space right now. A basement can be finished and turned into a home gym and an extra bedroom can become a home theater or a library later on.
• Consult with the builder about where non-load bearing walls are located in case you decide to expand or convert areas of the house later on.
• If you’ve always wanted double French doors off the dining room where a large picture window will be placed but don’t want to spring for the expense right now, confirm with the builder that a header for a doorway is built into the framing
• Opting for pre-wires and pre-plumbs but saving the cost for installation of a surround sound system, security system or laundry tub for when your budget permits can save you more money down the road, since the house will already be prepared to receive them. And even if you never get them installed, high-tech infrastructures such as home networking packages can be touted to the next potential buyer of your home when you get ready to sell some day.
Now let’s take a moment to talk about upgrades and design options. In some locales, building inspectors will not accomplish the final sign-offs and lenders won’t attach the final value of the house and until certain things are in place by the builder both inside and on the outside of the house. So if you are a buyer who wants to accept only what the builder’s base price includes and save all your upgrading to do on your own, it is doubtful that the builder will intentionally omit floor coverings or any specific items at your request, nor give you credit for what they would have installed. If your plan is to take ownership and then hire an outside company or home improvement store to add these bells and whistles, there is one thing to be concerned about. That is the builder’s warranty.
As we mentioned in an earlier chapter, new homes come with a warranty that covers certain structural aspects for a specified length of time (usually ten years) , accompanied by the manufacturer’s warranties for the appliances (usually one year) and systems installed within the home(usually two years). And some builders purchase warranty policies for their homeowners from an outside company, lending more peace of mind than the minimum offered by the builder itself.
The issue arises, however that if you decided to pull up the builder’s included vinyl kitchen or bathroom flooring in favor of having someone install imported Italian tile -- and a beneath-the-floor structural or plumbing issue arises that the builder must be called to fix during the warranty period – the builder may have to demolish your gorgeous tile to fix the problem. Their warranty may state that because you did not purchase that flooring through them, they are not liable to replace it for you. If, however, you had purchased the tile flooring through the builder’s design center and it was installed by the builder, the builder would be responsible for replacing it with the same or similar materials after fixing the problems beneath it.
Even for an item as seemingly innocuous as a garage door opener, the same builder non-liability may be true. If your expensive wood-clad, window-paned garage door gets damaged as a result of a garage door opener you have installed that was not powerful enough to support its weight or malfunctioned, the builder does not have to repair or replace your garage door. If, however, it was their opener that somehow caused the door to drop, however, they would have to spring for it.
On a separate note, homes today are more energy efficient than every before, which is good news. The downside is that their airtight atmospheres can diminish indoor air quality significantly, giving rise to the prospect of allergens and pollutants not found in older, draftier houses. For that reason, many builders offer air cleaning and ventilation systems incorporated into their HVAC plans – something to think about or inquire about when making your decisions.
These are the issues few homebuyers become privy to when they first purchase their newly built homes. And unfortunately, few new home salespeople or building personnel explain these nuances to them in the detail and volume we’ve used here. Whether you use the builder’s design center’s upgrades and options or decide to install your own, however, studying the builder’s warranty will permit you to go forward with both eyes open.
Now that you have made some decisions, you are armed and ready for your design center appointment. This is another occasion to leave children in the care of friends or family or take time off work, since most design center personnel keep regular weekday office hours. Even if you are lucky enough to have your appointment on an evening or weekend, however, this appointment will take your full concentration and attention to detail.
Chances are, the design center representative you will meet with will have knowledge not only of interior design with an eye for color, texture and dimension; he or she will also have a personal and intimate knowledge of the builder, its floor plan designs and the features included in each plan. She will have prepared herself for your visit by reviewing the architectural options you’ve already ordered (ah—the miracle of computers!!) and will be aware of your loan approval, since the builder usually doesn’t permit this appointment without it. But design center people aren’t made privy to how much loan you qualify for. Your loan pre-approval is usually based on the price of the house you intend to buy, but a final approval will be accomplished just before escrow closes. This is why it is so critical to guard the terms of your loan approval during the seemingly endless months before your house is completed by being judicious with money and credit until after your move-in.
If there were only one area most real estate experts would recommend that a buyer upgrade if they were to accept every other surface and item included by the builder in its base price, it would probably be carpeting and pad. The type of carpet most builders include usually carries a sparse number of yarns per square inch. Take a sample of their standard carpeting, bend it and take note of how easily the backing is revealed. Lower grades of carpet have little or no stain resistance within the fibers and can become matted more readily than better quality carpeting. If you were an apartment owner who must change carpeting within your rentals every year or two, this inexpensive carpeting may be useful. However, having it installed in your new home may find you regretting it unless your plan is opt for better carpeting in the not-too-distant future. If this is the case, upgrading the pad may make it last longer. Ask the design center representative to explain the quality of each carpet upgrade offered by explaining information on fiber density, stain resistance, resilience and longevity under normal use. Some types of carpets begin to show traffic patterns quicker than others, much of which has to do with whether they are closed loops or plush piles. Again, the materials used, yarn density and the twist of each fiber will help determine resilience.
Carpet pads are designed not only for the “cush” underfoot but also to make the carpet last longer. The weight and density of the materials used are something important to consider.
To find out about the different qualities of vinyl, wood-look laminates, marble, ceramic tiles, hardwood and stone surfaces, it takes a little research – and the Internet is replete with information to dig up while you’re waiting for your house to be built. Design centers are usually stocked with manufacturers’ brochures, which should list individual web sites for each company where you can scrutinize their lines of offerings.
We want to assure you here that no builder’s design center representative has the right to make you feel “cheap” for not opting for ANY upgrades and options for your new home. If you feel condescension exuded from this individual, report your experience immediately to your salesperson. The builder may correct their personnel’s attitude or opt to have you work with someone else. Your visit to the builder’s design studio is supposed to be one of the most pleasant parts of buying a newly built home, so any builder worth their salt will want to set the proper stage for this. Design center reps, will, however, make suggestions to you, give some advice when asked, or relate what others may have added to their homes if you are open to hearing about it.
Whereas builders used to offer perhaps one or two different upgrades packages for kitchens beyond the included units for their homes, they can now offer an enormous array of machinery – restaurant-style stoves, built-in refrigerators whose exterior match kitchen cabinetry, warming drawers, wine lockers, trash compactors and whisper-quiet dishwashers. Appliances like these are no longer built exclusively by high-end manufacturers. Companies like GE, Kenmore, Whirlpool, and Kitchen Aid have rallied ‘round to present consumers with sophisticated appliances, not taking a back seat to companies like Thermador, Bosch. Viking and the like, whose names have been synonymous with gourmet kitchens for many years.
The design center rep you’ll meet with should have drawings, photos or real-life examples of each of the included amenities for your floor plan and then will happily show you the levels of upgrades to each offered by the builder. Although you may be eager to make your choices, your representative will usually have a certain order for the items they must cover with you.
After your list of amenities, upgrades and options has been compiled, you’ll get an idea as to how much the extras will add to your purchase. You’ll have the opportunity to make changes and then will be asked to approve your selections by signing an addendum to the purchase agreement. This should be submitted to your lender as soon as the final figures are confirmed, as it will be part of what the appraiser will look for when justifying the home’s value as well as give the lender a new loan amount with which to proceed.
Be prepared to furnish an additional deposit check at this point, either all or part of the addendum amount, which will become a part of the down payment on your mortgage loan. Builders differ as to how this important step is accomplished, but usually will not go ahead and order your upgrades unless your check has cleared. They take a calculated risk in installing your personal choices before title has changed hands.
It is not unusual for buyers to get second thoughts about what they have selected, especially when they tour more model homes or do more research after they have had their design center appointment. Ask your design center person how much time you have to make alterations to your existing choices for any last minute changes of heart.
