Unless you can talk to other customers who did this I would assume it is just a marketing ploy. If the contractor is not willing to give you name of previous customers I would not use him with or without discounts.

We know the builder and have spoken with two customers (and toured the homes) that were very happy. I suppose the only way to tell for sure is to go out to bid with specific plans... Was just interested if others have taken this path and realized nice discounts.

You really don't get any actual discounts. It's smoke and mirrors.

ditto all the above.

Do you already have your floor plans to get quotes? It seems that if you like this builder, that you should still go through the normal bidding process between a few builders. When is the home show? Would the home show be done, and you moved in before the other builders estimate your home being done? Is it only for one home show? It really doesn't seem that there would be much room for discounts for you doing the home show. But maybe the perks would be worth it, such as the builder being overly cooperative with you, a group of designers coming in which would maybe give you decorating ideas, maybe they would even be available for help with paint selections?
I haven't built yet, but have my land (larger acreage). While I like to save money (and my house budget is about 1/3 what you listed(not sure if that included land?), my goal is more to end up with 90% of what I want. (I say 90%, because I don't want to spend 10 years after building fussing about what I "should've done"!...I just want to be content and happy with my decisions). I guess where I am going with this is that it takes a long time to find land and make the decesions to get the Home/acreage you want. If having a home show with a builder doesn't get you the home that you want, but you saved 10%, then it isn't worth it unless you are planning to sell and hoping to profit. For us, the home is an important part, but we are also planning a pond, barn, garden, a forest full of trees and an orchard...the house better be (90%) right after searching 2 years for land, and planting trees that I won't harvest from for several years...even in my 30's, I can't redo this that many times. Choose the builder you want, then make the decision if you are comfortable doing the home show....could be a lot of fun!

(Sorry for all the rambling, I read you post the other day, and it has been circling in my head for awhile!)

I would do it in a heartbeat because it would ensure high quality work from your builder who would be using your home to showcase his product. A calling card, if you will.

I had a friend who writes for a home magazine do an article about our build experience and there will be a spread in the mag when the home is done. When I told my builder about this the service stepped up considerably.

We had a home built that was shown during a parade of homes event. It was not an official parade home, but completion coincided with the official parade tour.

The promotion that was given to us was a free upgrade to Kohler plumbing fixtures (standard was Moen) and a $3000 decorator allowance. The promotion was offered after we signed the purchase agreement. Not a bad deal.

Builder here. It is a win-win situation for both parties. At the moment I have a home custom built for a client that is entered into a Parade of Homes Tour for 5 weekends. On an original contract price of approximately $465k I installed upgrades that cost me $40k. These include a 15k grid-tied solar panel generation system, a $7k buried cistern / pumping system to collect roof water for irrigating the property's lawns and gardens, plus 18k of upgrades for interior woodwork and room upsizing in the kitchen and family room. My clients are thrilled with the outcome and benefits. I will pick up both immediate and long-term building client prospects. Finally, my parade homes always receive extra attention and care.