It's no secret that we realtors are paid on a commission basis, usually after the houses have been handed over, and it's also no secret that this service of having a realtor help you choose a property is paid for by the seller. Therefore, the buyer benefits from the help of a professional at no cost.
I mention this point again because during the process of choosing the house, defining the payment method, registering the property and so on, the broker's participation is vital. Today, I want to take the opportunity to explore what is one of the most enjoyable moments if you're negotiating a new home: the Design Studio, or Design Center.
Why is it important? On the emotional side, this is when the house starts to look like you. It starts to have color combinations and finishes that you like. From the investor's point of view, it's when we take a hard look at where we should invest more money in order to increase the value of the property, whether for future resale or even to make it more attractive for renting.
Usually about two weeks after choosing your house, we spend the day at the Design Center. There's a person from the construction company waiting for us, who already knows your house, floor plan, plot and everything else. If you're not here, we do it remotely.
Let's understand what we're talking about here. Houses, when delivered by builders, are already complete. Or almost. What I mean is that there is no furniture. Literally. Everything else is there: flooring, cupboards, mirrors, chandeliers, lighting, shower, sinks, cabinets, shelves, carpet... everything. When we receive the house, we need to bring in the furniture. We're talking about the decoration part. The house has everything installed, working, in the kitchen, bathrooms, everything. All that's left to do is move in and enjoy!
Everything is included in the price we sign the contract for. So what do we do at the Design Center? We choose the colors, change them, improve what we think is interesting and pay the difference. Normally, a house comes with carpeting in the bedrooms and living rooms, for example. We can ask for the carpeting to be removed and the tiled floor to be replaced, and this will be paid for.
Changing cabinet colors is also common, and you can change everything from bathroom tiles, doors, door handles, socket locations, number of sockets, built-in sound systems and more. If you choose a swimming pool, you design the entire pool: size, color, shape and more.
What's the challenge? Knowing where to "spend" more and where not to get lost during the visit. Normally, around 15% of the value of the property is spent on what we call upgrades, which are those improvements and changes chosen by the clients. This extra amount, as long as it doesn't exceed 15% (it can vary depending on the construction company), is added to the total value of the property and paid on receipt of the keys, or added to the financing amount, if the house is being financed.
You can buy the house and not change anything, it will still be complete, just simpler, more basic colors and combinations. We do this a lot, which is why a balance of choices is important.
This stage has a big impact on the final value of your property and how much it will be valued by the bank, in a resale, among other factors. Understanding what the property is worth and how much return you can expect from the alterations made is important and should always be discussed with your realtor. In addition, understanding the structural guarantees and more that come with the house is also important, as services done without licensed professionals can affect this protection offered by the builder.
Want to know more about choosing finishes?
Watch the video we made inside the Meritage Homes Design Studio.