The word “production,” suggests that houses are on assembly lines – akin to a production line for a car. You just might be surprised, however, at how homebuilders have found ways to make new home neighborhoods look less and less boring or “cookie-cutter” than the neighborhoods built during the post-war building boom.
Across the country, production homes can range in value from the tens of thousands to the millions in price. And some of today’s homebuilders would challenge any buyer who entered their model homes blindfolded to guess whether the house in which they were standing is a custom or a production home. This is because so many of the features thought to be reserved for the custom home purchase are now available to home buyers through these builders.
Demand by homebuyers to “have it all” is part of what has fueled this phenomenon. Back in the 60s and 70s, it wasn’t unusual for a homebuilder to contain the few upgrade samples it offered its homebuyers within the confines of its sales office. Today, it’s not uncommon for production builders to send their buyers to state-of-the-art design studios, where thousands of options are displayed – from kitchen cabinetry to home theater systems to stand-up Jacuzzis. This newly-charged atmosphere has forced products manufacturers to broaden their lines of products. And the volume with which these upgrades and products are now purchased has brought the price of many items thought to be unattainable to be within the reach of many an average consumer.
Midwest homebuilder C.P Morgan’s design center in Indianapolis covers 12,000 square feet and contains 30,000 choices. Entire kitchens with a wealth of cabinet and appliances from which to choose are set up. They even display 4-foot brick walls to give homebuyers an idea of what their homes’ exteriors can look like.
To enhance its customer’s experience, high-end homebuilder Taylor-Woodrow Homes touts not only a state-of-the-art design facility – but also one location to browse, one in which to make final selections and a new twist on high tech. It has recently implemented an online portal for new home buyers, giving them access to the company’s online design center as soon as they have signed on the dotted line for one of the builder’s homes. This offer them a no-pressure way to make their own choices from the comfort of their home computers with selections kept in an online folder. Now, instead of taking a half day off work for the in-person selection process, it can all be finalized in about an hour.
So that you understand the science of production homebuilding, we thought we’d offer you a bit of insight into how homes like these come together. The land the neighborhood is to be built on has had its individual parcels – or home sites – approved by the city or county entities in that area, and after it purchases the dirt, the homebuilder scrutinizes how it will release the individual lots in phases -- indicating which lots will be first, second, third, etc. marked for completion in each phase. After bidding out the various subcontracting jobs for each phase (or all of them), the builder will set completion “goal” dates for each house (for foundation, plumbing and electrical, framing, drywall, installations and finish work) that will be reviewed a weekly basis until the entire neighborhood is built out. These dates are merely goals because of a number of factors that can affect their adjustment, such as inclement weather, unexpected materials shortages or delays, labor inconsistencies, etc.
For that reason, there are certain “cut-off” times, when each phase of construction is at its drop-dead point, time-wise. When phases of the construction have progressed past the point of no return, it costs the builder an inordinate amount of money to reverse the process while the house is set to go forward with other stages of construction. For example, if you have signed the purchase agreement, your financing has been pre-approved and the green light has been given to commence building the house you ordered up perhaps just a few weeks ago, now is not the time to decide that you want the loft option. By this time, the builder may have scheduled out the various phases of construction, materials orders may have been placed, and city permits may have already been arranged and approved without the loft option. In other words, it’s too late to change your mind.
The same criteria can come into play with plumbing, electrical, and certain architectural features that cannot be changed once the ball starts rolling. Whenever choice is an option, these important cut-off dates should be communicated to you by your sales and/or construction person so that you have adequate opportunities to revise your decisions. You may, however, buy a home whose construction has already begun and it’s too late to do very much at all in terms of making changes to the original plan that the builder or a previous buyer may have drawn up. The farther along in construction, the less choice you’ll have in architectural options and some upgrades.
The permits and approval process builders face has grown exponentially through the years, so understand that before you even walk through the door, they have undergone an exhaustive process in order to get the final permission to sell – site design, deed restrictions, architectural reviews, and zoning are just a few on the list.
Unlike the process of building a custom home, where you own your own piece of dirt and you have the freedom to communicate changes you want to have made to your architect and contractor, a production home purchase is a more semi-personalized process. You don’t own the land until title passes to your name, and the house belongs to the builder until your escrow closes.
Now that we’ve covered some basics about a production home purchase, let the buyer be wise . . . . . .No question to sales or construction personnel is unintelligent when your hard-earned dollars are on the line for such a huge investment. You have every right to expect courteous, informed and complete answers from the homebuilder, their salesperson or their construction personnel. Don’t forget to ask about materials used for things you cannot see. If you are versed on materials used for floor joists, wall studs and roof trusses, you may feel better about products that can stand the test of time as well as those that save the environment.
Dena Kouremetis is a veteran freelance real estate consumer journalist and California real estate broker. She may be reached by email at REritr@aol.com.
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