…that is the question. We have a predicament of sorts with new home construction. With the slow market, many builders are electing to do presales. This is when you purchase the home before it’s built. We all learned a valuable lesson in overbuilding when the market changed. Builders don’t want to build a bunch of homes and wait for buyers and quite frankly, they can’t get loans to build more homes until they sell their current inventory. (The banks also learned a valuable lesson) We are preselling at Mirada, with new homes starting at $169,900. We have a model so that buyers can view one of the floor plans and the standard finishes and from there, they can choose their floor plan and lot and it takes about 90 days to build. I really like this idea because with 3 interior finish packages and 5 exterior paint body/trim combinations, it’s almost like getting to build a custom home in an entry level price range.
The drawback with presales is that some buyers see the subdivisions as ghost towns. When they look at all the vacant land, they naturally have a lot of questions and hesitations about buying. Did the builder/developer run out of money? What happens to the subdivision if nobody else buys? This is understandable. A lot of people also don’t want to be the first to buy in a brand new subdivision. Another challenge with presales is you risk missing the buyers that are ready now.
We have priced the homes at Mirada very aggressively with the hopes that we’ll have a lot of buyers and we can build many homes quickly, eliminating that ghost town look. We will also build 2 additional floor plans that buyers can walk through and buy if they don’t want to wait 90 days. I think we offer a lot for the price and we’ve gotten very positive feedback from the people that have been through the model. I think presales offer a wonderful opportunity to get the home you want on the lot you want. I hope buyers also see it that way.