Booming new home real estate sales come and go, and builders, like any other entrepreneurs, scramble to find undiscovered "niches" in the marketplace. Some tout an "everything's included" type of marketing approach with their homes, boasting of their elegant brass fixtures, solid oak front doors, built-in security systems and other included items customarily thought of as upgrades. The sales price will include (no doubt) somewhere in its accounting, the cost of these fancy items, but buyers can consider the homes as being well appointed without having to go broke at the builder's design center. And this may work well in the move-up marketplace, depending on the popularity of the builder's product and its location.

Other builders in recent days have taken the totally opposite tack. Reverting back to the stripped-down "value" house, some builders are now "leaving it up to you" to decide just how much "dudding out" you want to have done to your own home. In the name of calling it "buyer choice", these builders claim that they are putting you, the buyer, in the driver's seat. This marketing approach, used mostly in entry-level neighborhoods (first time homebuyers), may have been touted to be conceived from marketing research surveys conducted on thousands of home buyers nationwide.

Surveys like these may have asked buyers one simple question: "If you had the choice of: (1) buying a home for the lowest price possible, adding only the items you could afford to that base price, or (2) a house priced higher that contained amenities the builder thought were attractive, which would you choose?" Depending on the wording, the first time homebuyer, mostly concerned with down payment and monthly outgo would, of course, answer positively to the first half of that equation.

Some of the "extras" builders permit you to add or leave out are things most of us would consider a minimum in a new home purchase. For instance, a fireplace may not really be needed by all of us, but has customarily been a focal point in most homes. Don't want to pay for one? No problem. An auxiliary security garage door to the side or backyard can also now become an extra. How about ceilings no taller than eight feet in any areas? Not a concern. Trim around your windows? Definitely a luxury some may live without.

Many of the items I have mentioned may not sound earth shattering for some homebuyers to do without, but there is definitely one point to ponder. Say you were the homebuyer who bought the 1500 square foot "Serenade" model (selling for $125,000) and added all the items you thought would make it "livable" for you and your family as even a bare minimum. You ended up with, for instance, an extra $8,000 of upgrades and tacked this on to the purchase price. The person who bought the same "Serenade" floor plan next door to you decided to go with the stripped version, and he may or may not add more items to the home over the next few years as he can afford it. What happens to your value? Does the guy next door benefit by all the upgrades you added? Or does your value sink to the base price of the house with no enhancements?

My point is this; new homebuilders don't always do buyers a service to make everything "extra" in a new home neighborhood. And unsuspecting home buyers, whose future may depend upon the appreciation their first homes may provide them, may not be able to reap the rewards in these neighborhoods others may enjoy if a modicum of value were initially established throughout.

In defense of the industry, homebuilders taking this approach may not knowingly realize the effect their initial marketing efforts may have on the future welfare of their buyers. It may just be my opinion, but let both builders and buyers beware of anything that sounds too good to be true. It may not be that good after all.

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Published: October 27, 1999

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Editor's Note: This article reflects the opinions of Dena Kouremetis only and not necessarily the views of this or any other publication, organization or Website owner.

A veteran of the real estate and homebuilding industries since 1986, Dena Kouremetis first joined Realty Times as a new homes writer in 1998. Since then, she has authored four books, written consumer columns on new homes issues for websites and newspapers all across the country, contributed to builder trade magazines, appeared as a guest expert on several radio shows and even created a ten-chapter podcast for LendingTree.com’s homebuilder website, iNest.com, now available on iTunes, entitled Uncharted Waters; Navigating the Purchase of a New Production Home. Kouremetis recently joined her local Folsom, CA Coldwell Banker office as a broker associate while continuing to write for the real estate industry. For the past three years, she has been training real estate agents for both the resale and new homes industries, putting her experience, research expertise and gift of expression to work to help others entering the business.