Several programs allow house hunters to try out a property before making a commitment to buy.
By CANDACE JACKSON – The Wall Street Journal
Updated Feb. 5, 2015
If you can test drive a car, why not a house?
That is the theory behind several programs that let buyers try out a condominium or resort home before they commit to buying. A handful of developers, listing agents and homeowners say they are willing to let potential buyers hang out with the neighbors, have dinner in the kitchen or even spend a night or two in a home before making a final decision.
Raquel Gillett, an officer at a bank in Irvine, Calif., decided to test the waters before buying a Mediterranean-style home for more than $700,000 in Toll Brothers’ master-planned Parkview community in October. Ms. Gillet took advantage of the sales manager’s offer to introduce prospective buyers to residents for an inside view of what it was like to live there. She attended a pool party where she met her potential neighbors. “I think the most important thing to me was getting to know them,” she says. “It gave us a comfort level with each other when we were going to be on the same block.”
For individual homes on the market, the opportunity to test out a home or a neighborhood in advance remains rare. Carol Bird, Malibu, Calif.-based real-estate agent says that in her 25 years in the business, she has fielded only a couple of requests from clients asking to spend significant time alone in a home before buying. One, she said, wanted to get a sense of traffic noise at different times of day. He ended up purchasing. The second wanted to try out a home’s numerous high-tech features, unusual at the time. He decided not to buy.
Ms. Bird says she thinks the test-run is ill-advised. “Either they already liked the house and then change their mind and you lose the deal, or it stays the same,” she says.
Others say it can benefit buyers. “It makes sense; you spend more time trying on a pair of shoes than you do buying a house,” says Susan Vanech, a Westport, Conn.-based agent who recently listed a home she owned for $574,000 and was open to potential buyers sleeping over. “It’s quite possibly the largest individual investment you’ll make in your life.”
Ms. Vanech says no one took her up on the offer to spend a night in the listed home; it recently sold for just above asking.
Toll Brothers , one of the country’s largest home builders, also has a Fly and Buy program for buyers who want to travel to a new town to check it out. Travel costs can then be put toward a purchase contract. The company says for liability reasons they don’t allow overnights in model homes, but can put prospective buyers up in guest units in certain communities or in nearby hotels.
Honua Kai Resort & Spa, a luxury condominium complex on Maui’s Kaanapali Beach, launched a Stay and Play program about three years ago when sales were slow amid the recession. Though sales have picked up in the past year or two, they have continued the promotion. Prospective buyers can rent condos that have been placed in a rental pool for between $250 and $2,200 per night. If they decide to purchase, the cost of the stay can be applied to their purchase. Prices range from $985,000 for two-bedroom condos to $3.9 million for the largest three-bedroom units.
Erika Alm, a principal at PowerPlay Destination Properties, which overseas sales and marketing for the development, says two of the latest three units sold were to people who tested them out while in contract, before closing the deal. “Some people know they’re going to buy at Honua Kai but they’re not quite sure,” she says. “They make an offer and then say, ‘Could we try this out?’ ”
Wheelhaus, a company that manufactures luxury prefab houses as small as 400 square feet, recently launched a “try before you buy” campaign where potential buyers willing to travel to the company’s headquarters in Jackson, Wyo., can spend the night at a resort made up of several Wheelhaus models. The company fully reimburses the cost of a stay if a guest goes through with a purchase.
A big problem with buying a tiny house is making the transition and the shock of, ‘What did I just do?’ ” says Jamie Mackay, the company’s founder. “It’s good for our buyers to get to touch and feel.”
So far, about 40 people have taken advantage of the program, says Mr. Mackay, and more than 75% of them have ended up purchasing their own Wheelhaus. Vince Crivello was one of them. He was interested in a 400-square-foot Caboose model Wheelhaus with one bedroom and a sleeping loft, in part to downsize from his 2,700-square-foot home in Marin County, Calif., but he wanted to make sure he’d be comfortable with such a major change.
“The first thing I did was go to the grocery store to buy a bunch of groceries,” says Mr. Crivello, who is in the investment-management business. The kitchen had a two-burner stove, a small refrigerator and minimal cabinet space, and he “wanted to make sure it would work.”
Mr. Crivello says his test-drive prompted him to add an outdoor storage shed to his property, and to request the windows be placed to maximize his view of the outdoors. He also figured out that cooking larger meals was doable if he also used an outdoor grill on the patio. His total cost for the home will be about $125,000, including making some adjustments to his plot of land to prepare it for the Wheelhaus, such as adding septic, electrical and water connections.
Ginny Beasley, a Ridgefield, Conn.-based real-estate agent says the sellers are open to overnights for a historic country estate in Redding that has recently been reduced to $4.5 million. “We would need to do a background check—there are some really wonderful antiques in the house,” she says. The 6,385-square-foot home has six bedrooms and seven bathrooms and is on a 24.3-acre lot with formal gardens, river frontage and a swimming pool with a pool house.
Homeowner Janice Meehan says she and her husband are open to either hosting qualified buyers for dinner or letting them spend the night alone. The house, built in 1768, has been on the market since May, she adds, and the two are eager to move on now that their children have left home. She says she feels like “it belongs to everyone” because it has so much history.
“There’s so much to it and it’s such an experience, not just like, ‘Come in and see six bedrooms and six bathrooms,’ ” she says. “It would be fascinating to host my neighbors and introduce a prospective buyer—or if they wanted to be by themselves, that’s cool, too.”