Base Pricing Explained
June 01, 2021

Why is it when you see homes advertised “from the $200,000s,” the homes are often priced higher than you expect?

It’s a common question.

The listed price of any floor plan is a base price — it’s a starting point. Buyers can stop there and stick with all of the standard features a builder might offer. Most standard features come in a choice of colors, so buyers can still make changes to a home to better fit their personal style without increasing the price of the home.

Most buyers, however, want greater customization. They might want to build a bedroom as a study, extend the covered patio or add a fireplace. If the homesite is large enough, a third garage bay is a popular option, as is an outdoor kitchen. All of these structural changes increase a home’s price (and the home’s value). An oversized homesite or one that backs to a lake or forested reserve can also raise the overall price — and again, value — of a home.

Buyers also may want an exotic granite rather than the color and pattern of the granite that is standard. Hardwood flooring is often extra. Elaborate lighting fixtures or touchless faucets might also be an additional cost. All of these choices add to the price of a home. In fact, on average, a buyer selects approximately $25,000 worth of options on their journey to build their dream home.

Builders track these choices carefully and often build an inventory home with several of the more popular options, knowing it is something their customers would have selected if they were building from the ground up. That is why pricing of inventory homes is often higher than the listed base price. If you’re working with a Realtor, their negotiating expertise may help bring down the listed price of the inventory home you’re interested in.

For those with a very strict budget, we recommend talking to builders about building from the ground up. If your budget allows, however, you might want to consider the types of upgrades that are easier to make happen when a home is being built rather than later, such as extending a covered patio, installing a favorite countertop or customizing cabinets. A Realtor can also offer advice on which types of upgrades are likely to add the most value to your home when it comes time to sell it.

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