Question for the Real Estate Agents on building a home

[RooCeleste]

I'm not a realtor but I did recently build with Gehan in Walsh Trails...I doubt very seriously they would take $115K for a $160K house. They are building and selling houses like crazy in the Austin area, and probably aren't negotiating much at all, if any. You might be able to get a garage door opener out of them though.

[austinizer]

We inquired about a cash discount when we negotiated our house. Someone we know received 5% discount for paying for their house in cash, but this was in the 90s and in a different area.

I don't know if our sales rep was bluffing or thought we're bluffing, but she just smiled and said cash or mortgage doesn't matter to them, they get the money either way (from you or from the bank) and they don't discount their homes so that the value of the neighborhood stays high.

[Muzzle of Bees]

I thought the Brushy Creek area had water problems on a regular basis? Water boil announcements were always in the news a while back. I don’t watch the local news much any longer, so I don’t know how often it occurs now. Is that still a concern?

[sinking]

Originally Posted by austinizer

I don't know if our sales rep was bluffing or thought we're bluffing, but she just smiled and said cash or mortgage doesn't matter to them, they get the money either way (from you or from the bank) and they don't discount their homes so that the value of the neighborhood stays high.

The only real benefit is that they wouldn't have to worry about the buyers financing not going through. Once the seller has the money in their account it is all the same whether it came from cash or from a bank in the form of a loan.

[mark311]

Originally Posted by kasiem

The main reason I'd was asking/wondering is that back in '08 we talked to Mercedes out in Crystal Falls Fairways, and they were willing to take off $40k on a house that was to be built for $280,000- and they threw in a design center allowance on top of that...

Yes, a $40K discount on a $280K home is a lot different than a discount of any kind on a $160K home. I would be surprised if you could even get it for $160K without them tacking on a bunch of extras. The cheapest existing home for sale in Georgetown Village has an asking price of $172K. I wouldn't count on them discounting a new home much at all in a neighborhood like that with an exemplary rated Elementary school in the neighborhood.

[singlechannel]

What is a good way top find out about the foreclosures and lot sales? Is there a listing somewhere? I live in Circle C but might like to buy some lots and maybe another house as an investment, at the right bargain price.

[llkltk]

Originally Posted by kasiem

We're planning on putting our house on the market and using our equity to purchase a house in cash.

Question is, would a builder like standard pacific, david weekly, gehan, or horton take 115k for a house they're asking 175k for? approx 1800-2500sq ft. Standard options, no upgrades-if that helps.

I'm not sure how much builders usually negotiate with cash buyers, or if purchasing a foreclosure is going to be where the better 'deal' would be...


We're going to work with an agent in the near future..I'm just curious...

If you got that deal, your neighbors would riot outside your home. If the house is 175K, you could offer 168K. I don't see you getting a better deal than that! Especially in the Austin area. Honestly, I don't understand why people want to lowball on housing. It affects your neighbors and property values. It won't happen. Just being honest.

[llkltk]

Originally Posted by kasiem

areas we're interested in are-

paloma lake
parkside at mayfield
georgetown village
or paradiso villas

I would think in this economy the builder's would be more apt to negotiate... , but buying a foreclosure is the back up plan if not.

This economy? Austin is doing just fine. 175K for a home is already a steal!

[kasiem]

Since Texas is a non-disclosure state- why would my neighbors riot outside my home?

[johnrex62]

I haven't been around a builder in a number of years, but way back when the earth was still cooling and new homes were usually sold within 60 days........

The builders generally built in 90-120 days of interim financing costs and 10-15% profit in their sales price so they could negotiate up to 5% of the sales price and wait out a bad month or deal with an unexpected cost and still make 10% on the deal.

I recall in the 80's seeing some bad times where houses sat for 180+ days and the builders would drop to cost in order to avoid the interest charges on inventory, but that was still only 10-12% of sales price. Only after the interest had eaten all of the profit and they needed cash flow to maintain their vacant inventory did they drop below construction cost to sell a house. I know of one builder that kept a couple of houses for over 24mos before selling them to the bank to avoid default.