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Old 08-29-2007, 09:18 AM
 
1 posts, read 1,788 times
Reputation: 10
Cool Should we negotiate on a newly constructed home

We are interested in buying a home from a builder and wonder if it would be wise to offer less than the current list price. The home has a 30-45 day move in date and supposedly already reduced 20%.
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Old 08-29-2007, 09:37 AM
 
Location: NW Las Vegas - Lone Mountain
15,757 posts, read 19,764,773 times
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In a tract? Look up the other sales and see what he is actually getting. If the neighborhood is populated knock on a few doors by the house and ask what they got. (The neighbors will know the spifs that did not appear in the official numbers)

If a custom house negotiate like mad. They sell hard.

You might also consider hiring an agent. They are generally paid by the seller though they will likely not be able to represent you with the present builder.
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Old 08-29-2007, 10:18 PM
 
1,173 posts, read 4,371,282 times
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Even if it is a tract home, of course negotiate. The worst thing that they can say is, "no." The best thing is that they'll take your offer or negotiate. You'll never know if you don't try.

The entire issue of the house already being discounted is only mildly interesting to me. The market is what the market is, no matter what they've already done, so toss that fishing line in and see what you can catch.

Here's an example. We just bought a new home. It was standing inventory and we made an offer on it. When all was said and done, we paid $85,000 less for it than the same exact house 5 lots away that was purchased (new) in January 2007.

Actually, our price was even less if you figure soft money issues that were negotiated into the contract, but those are only worth a fraction of the value applied by the builder so I don't even think about them. However, I also look at the negotiation as a multi-pronged approach. I try to get as much of a dollar discount as possible, but as I give away some of discount during the give and take during negotiations, I'll toss in other soft issues like upgrades, warranties, landscaping, etc.

So, my recommendation is to hit them hard. There's less of an issue of "emotions," like you'll often find with a homeowner on a resale, so you shouldn't upset anyone. The builder is a businessman and he'll primarily look at his bottom line rather than the imaginary value of a homeowner's family memories in the house.

There's a good possibility of the builder wanting to free up some of his credit line, get out from under his construction loan payments, and continue completing his development with some other models that might be selling better than the house he has in inventory. Standing inventory does nothing but cost him money. He's not in the business of tieing up his money and maintaining a house. He's in the business of building and turning over houses as fast as possible, which he can only do after he clears existing ones off of his list. You can help him do that by taking one of his dogs off of his hands.

Good luck!
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Old 08-30-2007, 12:43 AM
 
1,173 posts, read 4,371,282 times
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While doing some browsing/reading, I came across an article you may find interesting. It doesn't discuss new home negotiating in particular, but it does discuss agressive real estate negotiations. It might have some jewels of information for you. Click here (http://nationalrealtynews.com/content/templates/standard.aspx?a=563&z=1&page=1 - broken link) to get to it.
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Old 08-30-2007, 09:22 AM
 
Location: Las Vegas
7,583 posts, read 13,357,513 times
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And for sure, get it inspected. Don't assume because it's new, it's right. Talk to the neighbors. That advice is right on!
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Old 10-01-2007, 01:49 AM
 
1 posts, read 1,649 times
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Smile another question

My husband and I finally found our dream house. Here's the situation.

It's our first home purchase. The house base prise is 327,000 but supposedly has around 66,000 in upgrades bringing the total close to 400,000. It's standing inventory so the builder said we'd get the house at the base price of 327. My questions are:
1. Can we still negotiate price?
2. What would be the best approach?
3. New customs are around a 6 month till completion stage, so I don't know how eager the builder is to deal with us at this point; does it matter?


Please help
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Old 10-01-2007, 05:25 AM
 
9,125 posts, read 22,793,171 times
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You can always negotiate price- the worst thing that can happen is that the builder tells you to go pound sand.

That said, if there's truly $66k worth of options in the house, that means the builder paid around $22k to have those options installed, so he's already eating $22k. Despite popular belief, the margins in housing aren't normally in the double-digits, so he's probably already close to his bottom number.

Again, it never hurts to try though- maybe try to get closing costs paid for or something- but don't expect to get the house for $300k or anything.

Bob
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Old 10-01-2007, 07:52 AM
 
Location: Beautiful Upstate NY!
12,244 posts, read 16,295,165 times
Reputation: 5608
Quote:
Originally Posted by garth View Post
Here's an example. We just bought a new home. It was standing inventory and we made an offer on it. When all was said and done, we paid $85,000 less for it than the same exact house 5 lots away that was purchased (new) in January 2007.
Of course, it goes without saying, that if the housing market continues on its current trend, that a new neighbor of garth's, will be paying $85K less than garth did, when the new buyer negotiates their own price in March of '08.
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