How much discount should I expect from home builders? (Houston: sale, construction jobs) - Texas (TX) - City-Data Forum

maroontide · 01-05-2010, 03:33 PM

I did a quick search but can't find related topics. We're looking for a to-be-built house (2-story, 3K sq ft) in Cinco Ranch SW. The list quotes are >= 100 per sq ft. I was told by the builder the best we can get is 5% off but I am thinking about at least 10%. What's my expectation?

Houston321 · 01-05-2010, 04:09 PM

Builders are less likely to discount a dirt sale as opposed to inventory. That being said, what is the ballpark purchase price? I would expect about a 15-20K discount on a dirt job if the home price is 250-300K

desertsun41 · 01-05-2010, 04:17 PM

I been involved with most of the big Builders for the past 3 decades. I know several of them intimatly. If you asked this question 3 to 4 years ago and beyond I would have told you no no no, Builders set their price and take it or leave it. Why would they give you a discount when there were people waiting in line to pay full price?

Today we have a different story. We are in a deep economic depression to which the construction industry has been decimated backed by 60+% unemployment rate among construction professionals. Builders are mostly bending over backwards when a lead emerges in their door. They are almost begging you to buy their home with offers such as free washers and dryers, free fridge, free upgraded carpeting, one builder I know was offering a free 21 x 16 built in pool.

The incentives are big if the home is sitting complete and empty. If you are looking for a new home to be built your options and incentives disapear quickly. The smaller Builders have already layed off staff and have few costs related to their business and are more happy to sit with no work then to build you a home for a pittance of a profit. I know what Builders make and if you knew you might not feel good about making them richer. Let me give you an example without mentioning names. Townhomes, 5 units to a building. After the first 3 were sold, the Builders cost is covered and then some. So the final 2 units are gravy profit.

Go in and make your best deal, just like you were chopping a car salesman on the price he painted in the window of the car you like. Why do you want to have one built when the MLS books are swelling with listings? Have you thought about the stress involved in having a home built? I dont even know why anyone would buy a home right now since they are loosing value every day. But go out and buy buy buy. Stimuate the economy.

City Love · 01-05-2010, 04:30 PM

Expect big discounts on inventory and very little on new builds.

Like mentioned above, new builds are costing builders very little in holding costs. One builder mentioned to me that some lots cost them a few hundred bucks a month to hold on to them.

chris_ut · 01-05-2010, 04:44 PM

60% unemployment is a bit dramatic. On the radio today they said Houston lost 15% of its construction jobs last year.

noeltsang · 01-05-2010, 04:56 PM

Builders are more willing to negotiate on inventory homes. For new build / spec build, which you can customize to your taste with different options, floor plans, elevations, number of bathrooms, lot setting, etc, there is limited room for negotiation.

ChocolateBabz · 01-05-2010, 05:41 PM

We built in October 2008. Total price (including options) $461,656 - total discount $48,850 or 10.5%. I don't know if it made a difference that we did not use a realtor for the transaction and hubby negotiated it all himself.

Txgal33 · 01-05-2010, 06:11 PM

Some Realtors can get ya even better deals if they work closely with the builders already and have a relationship with them. When we were looking back at the end of June we could have gotten a house listed at $410,000 for $330,000. Inventory home of course. So that was HUGE but more than we wanted to pay. Realtors are not always the bad guys. Worth their weight in gold if they know their business. And NO I am NOT a Realtor. Just have purchased three homes in the last 7 years. One built from ground up without a Realtor.

maroontide · 01-06-2010, 08:48 AM

Thanks for the info. We didn't feel their "begging" attitude. Actually their houses were sold quickly in Cinco (at least they said so) and we don't have many choices left there. Still scratching my head and trying to find the right one.

Quote:

Originally Posted by desertsun41

I been involved with most of the big Builders for the past 3 decades. I know several of them intimatly. If you asked this question 3 to 4 years ago and beyond I would have told you no no no, Builders set their price and take it or leave it. Why would they give you a discount when there were people waiting in line to pay full price?

Today we have a different story. We are in a deep economic depression to which the construction industry has been decimated backed by 60+% unemployment rate among construction professionals. Builders are mostly bending over backwards when a lead emerges in their door. They are almost begging you to buy their home with offers such as free washers and dryers, free fridge, free upgraded carpeting, one builder I know was offering a free 21 x 16 built in pool.

The incentives are big if the home is sitting complete and empty. If you are looking for a new home to be built your options and incentives disapear quickly. The smaller Builders have already layed off staff and have few costs related to their business and are more happy to sit with no work then to build you a home for a pittance of a profit. I know what Builders make and if you knew you might not feel good about making them richer. Let me give you an example without mentioning names. Townhomes, 5 units to a building. After the first 3 were sold, the Builders cost is covered and then some. So the final 2 units are gravy profit.

Go in and make your best deal, just like you were chopping a car salesman on the price he painted in the window of the car you like. Why do you want to have one built when the MLS books are swelling with listings? Have you thought about the stress involved in having a home built? I dont even know why anyone would buy a home right now since they are loosing value every day. But go out and buy buy buy. Stimuate the economy.

Thakur23 · 01-06-2010, 12:03 PM

I am building in cinco SW as well and was under the same dilemma as you are in right now. i don't know if i got a good deal or not....but my cost per sq ft is close to $92 and the builder is very good one too. as everyone said u will get a good discount on an inventory home....but u can always negotiate on dirt built as well. keep in mind that there are ways in which u can negotiate....if builder does not offer price reduction ask for things which you would like in your home....like small upgrades...Good luck.