Do Dallas area new home builders negotiate? (Howe, Alto: sales, real estate)

[jtgostars]

I am considering purchasing a brand new home from a well known non-custom builder in the Dallas area. I am not working with a Realtor and thus am thinking I can negotiate right off the top since they will not be paying any commissions. Question is do home builders of new subdivisions here in Texas negotiate off their "list price at all? Or is it more a case of they will offer to "throw in" upgrades for free or a greatly reduced price versus actually lowering their price?

Thanks for any input at all
jtgostars

[scyogi]

A realtor works in your best interest. (and no I am not a realtor or related to one) We used one with our Drees home purchase and it made it much simpler. They (the builder) will not give you a discount for not using a agent. Hopefully one of the realtors (nsummer) will post on this topic.

[nsumner]

It doesn't cost you anything to use a Realtor in your purchase. We are paid from a marketing/budget fund that the builders use such as advertizing. They will not give you any discount for not having a Realtor.

Why use a Realtor? To help you negotiate on what items the builders will budge on. What upgrades will have a higher return, which floorplan is better than other for resale, location of the lot, builder reputation, design center, inspections, financing, walk-thru, upgrades what? some items are much cheaper if you do them yourself after closing. Some builders charge an arm and a leg to add a phone jack in the bedrooms. extra cable, etc.

The sales counselor in the model home has been highly trained by the builder to perform their job and overcome objections and make you feel that you are getting a good deal. Your Realtor will provide comparables, will keep the emotions out of the transaction and look after your business. I chuckle every time I hear the sales pitch that they use 13 seer AC, not like the other guys... 10 see. Well 13 seer is THE LAW. They are not doing it out of the goodness of their heart.

Also, most builders have incentives that they give buyers but they are usually require the buyer to use the builder's mortgage company, title company and insurance company.

You need to get someone to represent you and look after your best interest, especially that it doesn't cost you anything.

And to answer your question yes, you can negotiate on the price of a home especially if it's in inventory. It costs builders lots of money if it's empty. If you are building from scratch however, you will be very limited on negotiating, may be you can get a lot premium waived or some money towards some upgrades...

Good luck,

Naima

[galore]

Originally Posted by nsumner

It doesn't cost you anything to use a Realtor in your purchase. We are paid from a marketing/budget fund that the builders use such as advertizing. They will not give you any discount for not having a Realtor.

When I bought my first house in 2000, at a time where the market was a lot hotter than today, I immediately received a 6% discount when I showed up without a realtor and pointed that out. Might have been compensated through the marketing budget but I didn't care where that discount came from.

All in all, I was able to get a 10% discount without a lot of haggling and I bought an almost bare-bones no-paid-for-upgrades new house built from scratch - not a spec (in the Firewheel area).

I'd wager a guess you'll be able to negotiate a much better deal today. Especially if you are liquid.

[LynnSlaney]

Nancy summed it up well...REALTORS are a nuetral party who represent the clients best interest in making one of their largest investments in a lifetime.
***Builder negotiations depend on the individual builders inventory level in a subdivision. I am seeing a huge reduction of available new homes in many areas- since the inventory is low- the builder is not reducing prices as much. The builders new permits are down 40% from last year, most builders are only building a few spec homes now and require 10% earnest money to begin new construction. Gone are the days of a $500. deposit for a $400k home, with
no money down & a credit score of 400. Lower builder inventory will help our re-sale market and we will see appreciation increase in our marketplace.

[angram73]

To be honest they can not offer you a better deal with out or with a realtor. But on the other hand the realtor can not work out a deal that you are not able to get on your own. If you have found the builder and the home that you want, you really do not need a realtor. However, if you are wanting info on builders, communities, home values, ect. you might want to get a realtor so that you are making and educated purchase. I know several people that work for builders and it is illegal for them to offer you any extra incentives based having or not having a realtor. And, what ever their bottom line is on discounts or incentives, that's it. Even a realtor can't get you any extra.

[loves2read]

A realtor CAN help people negotiate better deals if they are not good negotiators--
but a good negotiator, a buyer knowledgeable about about home buying can negotiate a better price than what might be "listed" on the house without a realtor also

there are too many variables to say what works for one person will work for another since it all depends on the particular house/builder/subdivision/timing of purchase/buyer's credit history--

all kinds of things that can affect the deal they are willing to make--one salesman might deal if he really needs to close a sale to make his quota and if another salesman has has a good week or month--he might not be willing to work with you at all---

know your market--sometimes realtors DO know the specific market you are interested in and sometimes they are as clueless as anyone else because it is not where they normally do their business---
if you are using a realtor --do not let the realtor talk you up in your price range--that is not helping you at all...discuss your game plan before you go in and KNOW about your mortgage situation--have your financing lined up so you are not dependent on the builder financing which might not be to your benefit--just like buying a car--dealers make money from selling the financing sometimes more than the car itself...

check out the gardenweb site buiding a house and get an idea about pricing ans quality issues---some things are not as cheap here despite what you read about foreclosures--dont expect to get a house negotiated down 30% or more especially if you are contracting from the build stage--too many variables for the builder and YOU would be the bird in the hand--your money would help smooth out costs for houses to build that DON"T have contracts--so they are not that likely to deal--best deals come when the house is built and builder has to pay the construction loan and actually take title to the house--that means he is responsible for the TAXES starting from them on improved property which are higher than on just dirt---another expense for him to avoid--
sometimes it is easier to get product included instead of price cuts--but then you have to make sure that the value of the product adds up to the discount you expect and that it is actually included --- what woudl you do if you thought you were getting a higher grade of brick and they did not put it on but the run-of the mill kind--
or if they did not put in as nice a grade of carpet or insulation--getting them to take something out and redo is REALLY hard to do...

[jtgostars]

Thanks for all the help and expert advice nsumner!!! I completely understand the benefits of having a Real Estate agent. I have some backround in new home building as I was at one time a construction manager for a semi-custom home builder in Illinois. So I think it will be hard for them to take advantage. But you never know so I have a follow up question and a seperate item to ask you.

1. If I were to do all the work, selecting the house, proposed upgrades, etc. do you think there is a Real Estate Agent that would consider sharing tehe commision if all I asked them to do was visit the builder once with me, review my selections and show up at closing? Basically 3 -4 hours of work tops? Just in case you are right about the builder not negotiating then if there is money for an expert I will go get one right as I am ready to buy.

2. Secondly; HOA Transfer Fee of $750? Is this legal, I know its exorbitant and am sure a RE could help negotiate that if its even legal. But for the first home buyer when there arent any assets the HOA needs to have a reserve fund for? This seems really outrageous and would love to call them on it.

[LynnSlaney]

Curouis-which city, builder & subdivision? Some of the builders who MLS their homes...turn out to sell much lower in person!