Selling a Spec Home - When do you think it should be put on the market?

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Real Estate Agent with Signature Properties in Scottsdale, AZ

 Here is my question.  What timing has the best results?  Do I bring this house to the market when it is at frame stage like the picture below or do I wait until it is a couple weeks from completion?  I have several investors that are building spec homes in Cave Creek, Carefree, North Scottsdale, and Paradise Valley and they are have different opinions on this.  The homes range from 4500 Sqft to over 10,000 Sqft.  Price range is basically 2 to 6 million.  Some think it is better to get as much exposure to the home as possible and give the potential buyers the option to pick their finishes.  My other clients want to be able to dictate the finishes and have the potential buyers and real estate community see it only when it is finished.  I am looking for opinions or personal experience with this issue. Please feel free to look at the home below and let me know what you think.  I am extremely interested in hearing your responses.

The Beam work in the Kitchen

The house below is being built in the Canyon Ridge Estates neighborhood of Cave Creek.  This particular house is 5326 Sqft with 5 bedrooms and a 4 car garage.  The MLS # 2782597 . You can also find more information on this house on my web site at www.LuxuryintheDesert.com.

 

Brian Myers, GRI, ABR  Signature Properties in Scottsdale, AZ  602.740.0686  brianmyers@cox.net

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Rainer
78,309
Chuck Dellorto
Coldwell Banker - Serving INDIANA & ILLINOIS - Highland, IN
"Talk To Chuck"
In my market, proposed construction homes are in the MLS. These sell just as fast as spec homes, or under-construction homes. The new home construction is booming in our area so there are spec homes to view for those that want to buy the proposed construction.
Jul 30, 2007 01:20 PM #8
Rainer
225,598
Diane Bell, Hilton Head Real Estate, Bluffton
Charter 1 Real Estate, Hilton Head, Bluffton, SC - Hilton Head Island, SC
From my experience, it is best to wait until the home is completely finished prior to marketing.  Of course, I can understand your desire to get started with the process.  Guess it depends on your area too.
Jul 30, 2007 01:41 PM #9
Rainmaker
532,758
Sandy Nelson
Riley Jackson Real Estate Inc. - Olympia, WA
your Olympia area Realtor

Brian, unless you have more than one home and can finish one out as a model for the others, I would wait until the home is completed before putting it on the market. Most buyers don't have the imagination to see what a home can look like.

Sandy

Jul 30, 2007 01:52 PM #10
Rainmaker
1,060,943
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate
Brian - I would agree with a few of the others that since it is a "spec" home and not being custom built for someone it would be better to wait till it is closer to completion to start your marketing efforts. I find that the majority of buyers have little imagination. I would guess that with a big price ticket there will be quite a few nice design features that must be "seen" to be truly appreciated. As a Realtor, I have always been fond of the builder that is able to wait till his home is near completion before putting it on the market. It makes his job and the Realtors much easier. Most of the time though I have found that builders don't have the luxury of doing this unless they have very deep pockets.
Jul 30, 2007 02:49 PM #11
Rainmaker
655,882
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes
There are definite pros and cons for each opinion. I do know however that when we see spec homes on broker tours that are not completed, agents tend to behave negative about ever showing the home "until it is done".
Jul 30, 2007 04:36 PM #12
Rainmaker
447,802
Sandi Bauman
Chico Homes Real Estate - Chico, CA
Chico CA Realtor

Having learned the hard way myself...  I would wait until that baby was DONE.  Forget the idea of posting it early so that buyers can choose.  What that really translates to is you spending MONTHS and MONTHS of extra advertising money. 

Another thing to consider:  the contractors ability/desire to actually get it done on time!  My last seller took a full 8 MONTHS longer than his anticipated 4 months. 

Jul 30, 2007 04:46 PM #13
Rainmaker
190,442
Joshua Jarvis
Virtual Properties - Atlanta Real Estate - Duluth, GA
Moving Families Forward.

If you only have one home to sell, put it up as soon as possible.  If they are doing multiple projects, make sure at least one is almost complete.

One great idea is put one that is nearly or totally complete on the market and then let the people build from that.  You'll need a great capture tool in order to grab them.  Works like a model home.

If you can get it staged, take the photos and the next time you list one (after the ground is broken) you can use those pictures to market it before it's even up - "an example of what you'll get."  In this price range, you're going to get picky buyers but interest rates aren't as big an issue and neither is time frame.... they ALL want it now.

Jul 30, 2007 09:24 PM #14
Rainer
226,976
James Gordon
Sibcy Cline Realtors® - Cincinnati, OH
REALTOR, PBD SFR SRS
Wait until it is under roof and then put it on the market. Be sure to update the progress and not forget about it.
Jul 31, 2007 12:25 AM #15
Ambassador
920,457
Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com
Brain, I been having this same heated conversation on our Sugar Lane Estate development in Wallace, La. These home are a much lower price range (190k) and above. With a couple of hundred listings, the builders want them sold just about the time they break ground. These are nice homes etc... The challenge is most buyers can not see what the property will look like while in construction. They are not use to the vision of a house which is in the frame stage. Also as the process goes on some room will look smaller before the look actual size. The homes which are complete sell faster than one which in the process. This is just my opinion. List the property and know you will have to dance with the investor/builder until sold.
Jul 31, 2007 01:37 AM #16
Rainmaker
123,467
Rebecca Savitski
BSR Real Estate Group - Cary, NC
NC Real Estate Listings

Wait Wait Wait Wait ---- From experience with this on both sides as a sellers agent and as a buyers agent wait until the home is nearly complete.  You are not doing the seller any favors by adding days on the market and the buyers cannot see the floorplan and finishing touches until completion.

 

WAIT until nearly complete.

Jul 31, 2007 01:58 AM #17
Rainer
38,706
Robert Rees - Austin Real Estate
Robert Rees Realty, Inc - Austin, TX

Once Drywall is complete

Customers can begin to have a feel for the home and somewhat visualize, but definitely NOT before sheetrock is done. 

Jul 31, 2007 02:12 AM #18
Rainmaker
101,823
Ray Nellum
Envision Real Estate Group, LLC. - Fort Smith, AR
Fort Smith Real Estate

Brian,

I won't be much help here because I think you need as much marketing time that you can get.  I have to agree with some of the others.  Some buyers need to see the finished product before making a decision.

RayNellum.com

Jul 31, 2007 03:36 AM #19
Rainer
8,595
Neetu Kainthla
BHHS Caliber Realty - College Station, TX
I work with three builders in Bryan College Station market. They build homes in ~170K to 400K price range. I have listed homes from slab to nearly complete stage. Most of the homes were sold when they were at nearly complete stage. As has been stressed by others as well lot of buyers have difficulty in visualizing how the house is going to look like. They are also not sure of the quality of the finished product if they see the house in early stages, even if we show them equivalent finished houses built by the same builder.
Jul 31, 2007 03:39 AM #20
Rainmaker
212,987
Sandy McAlpine
RE/MAX EXECUTIVE - Cornelius, NC
Search Lake Norman Homes For Sale - Lake Norman NC

I say put it on after framing but before color selections are made. Most buyers in that price range really want to be able to choose the colors of the exterior (brick, stone, hardiplank, etc), or they want to be able to order a certain brand of appliances. buyers often want to pick out paint and hardwood stains as well for the floors,cabinets, and walls. However, I have noticed that when I list the home before framing, the clients tend to push the envelope by asking for structural changes, extra closets, etc. and on a spec home that is tied to the builder's own credit line, that can get a little sticky. Especially when it doesn't close (buyer's issue). You are then stuck with a customized home, that may or may not fit the next showing's tastes. ughhh! what do you do? I say take out most of the guess work and design. the easiest time to list is right before it's finished!

Sandy Aichner

RE/MAX AT THE LAKE

MOORESVILLE, NC

Jul 31, 2007 05:21 AM #21
Rainmaker
224,121
Laurie Mindnich
Centennial, CO
Hi, Brian.  I didn't see the floorplan in the mls.  If you're actively marketing it, in this price point, the people are very likely more sophisticated than most.  It might be dicey to begin so late that they can't make interior selections.  In fact, if you're going that route, budget ahead for the granite that will have to be ripped out after installation, or the plumbing fixtures that they hate, etc.  There is absolutely NO WAY it will go anywhere if you don't put together a nice FLOORPLAN brochure asap (I'd put the floorplan in the mls, as well- even hard to read, it will at least show usable rooms).  A full page floorplan, with the address only (whatever it is.com) would be great.  Any house the builder has complete and sitting can be viewed to get a grip on the finishes (but also have the specifications- the FULL builder copy, not the handout) available.  It looks beautiful, but I didn't find enough information.  Start marketing as soon as the stairs and safety rails are in, in my opinion!  GOOD LUCK!  Get the prints and sell it- great piece of land!
Jul 31, 2007 07:17 AM #22
Rainmaker
224,121
Laurie Mindnich
Centennial, CO
Oh, also, are the taxes for raw ground?  I'd pop a slightly high tax estimate that's with the finished house, based on comparable sq ft in the area.  Oh-and don't spend much marketing to real estate agents.  Most understand fast closings, and while you want awareness, much more than that is money out the window.  Go after the buyers directly.
Jul 31, 2007 07:19 AM #23
Rainer
139,927
Kelly Sibilsky
Licensed Through Referral Connection, LTD. - Lake Zurich, IL

I agree with Jackie - put it in as soon as possible! I work with several custom builders and believe me, they don't want it to end up a spec home! They want the buyer ASAP and even though some buyers may not have vision, others do.

I offer builders a different commission plan. It starts out lower, when the property is still a lot, then goes higher as the home gets more "complete" and full scale marketing can begin. Because I don't start full scale marketing in the beginning, the advertising cost is relatively low (thus the  lower commission). But I've made great contacts, get lots of exposure, and if it sells in the beginning, it's a win-win for all. But the comments made by others that the home will most likely sell when it's finished or very nearly so...are definitely TRUE! So be prepared!

Jul 31, 2007 01:26 PM #24
Rainer
122,217
Christy Powers
Keller Williams Coastal Area Partners - Pooler, GA
Pooler, Savannah Real Estate Agent
I think you got some really good advice. I would probably get it on earlier rather than later.
Jul 31, 2007 03:27 PM #25
Rainer
14,433
Lance Sonka
Spec Homes - Houston, TX

Brian,

This is the age old question surrounding spec home building.

The correct answer to the true question here is which scenario does the investor/builder want?

Some prospective buyers will want to get involved. When this occurs the builder's job changes from building a "Spec Home" to building a "Custom Home."

On the other hand, a spec home which has complete trim/color selections pre-ordered before frame stage will build much faster - and usually with less stress!

Admittedly, I am partial to advertising the spec home as soon as construction begins... Take a quick peak at my profile and you'll understand why.

Aug 02, 2007 01:41 AM #26
Rainer
3,575
Robert Kerr
Kerr Financial - Warwick, RI

So much construction in AZ is being halted without any advance notice at all that even at 30 days out there's no guarantee the house will be finished.

Aug 02, 2007 06:36 PM #27
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Brian Myers

Scottsdale & Paradise Valley, AZ Real Estate Agent
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