Low Balling Builders (sale, home builder, buying)

[Mokon]

I am looking at a house listed at around 200,000. 3bed, 2bath, 1400sqft, just built.


All things considered about this house in this market and after looking at similar homes I feel 180,000 is a fair market value at this time with paving added to the contract.

I am thinking at going in at 170,000. Anyone have experiences with low balling builders? What are the chances here?

[Brave Stranger]

Low-balling new construction in most cases does not work. But in this market who knows ? Can't hurt to try.

[sjwaste]

Usually, the builder doesn't want to budge on price. They'll throw in allowances for upgrades instead.

Can't hurt to try, but even as bad as the market's gotten in some areas, they still stick to that.

[gf2020]

If you think $180K is a fair price then why would you offer $170K?

Go in with your highest, best offer and see what happens.

[Mokon]

Originally Posted by gf2020

If you think $180K is a fair price then why would you offer $170K?

Go in with your highest, best offer and see what happens.

Well thats just basic negotiation. If I am aiming for 180k and they are offering 200k, 160k would be the ideal offer since that gives room to meet in the middle. It is never wise to go with your highest, best offer first unless you are in competition with other buyers and/or are emotionally attached to the house. And given that we are in a buyers market I can't imagine why anyone would ever go with their highest offer first..

Thanks for the advice everyone!

[flyonpa]

I think you will find most builder will rater add 'extra' options/Upgrades, some of the closing costs etc. the lower the price, When the next buyer comes along they are going to use the last sale as a basis of there offer and offer something a bit lower. and it just keep going down. Doing extra/upgrades do not show up in the sale price, but you may get 10-20K in extras. but the sale price stays the same. So when next buyers check to see what things are selling for they only see the final price, not the extras that are tossed in.

[Synergy1]

I believe "extras" in a new home can be very high. Our Florida home was custom to around 25% of the total home. It is 3,200sf and the prices around our "extras" soared the cost to $460k and that was 5.5 years ago. The home jumped in 2 years to 600 then right now homes like ours are in the market for 300...We took a huge downward to a price that cannot replicate the home itself not including the extras. Underground electric, cable, larger garage by 4', and the garage is attached therefore it made the original roof structure obsolete so the builder had to make our roof higher and wider. I opted for 2 zone A/C units, one 50BTU amnd another 36k BTU, a higher SEER on the A/C units along with more insulation jacked the price up $7,600....A pool jacked up the price $25k and some state of the art stuff I had the builder include in the laudry room. (junction box for all electonics such as cable, phone, TV monitoring etc....

Of course a new home today would cost more than a builder's spec home or one that has been constucted a few years ago and has not been sold.

As a home builder myself I had a lot of experience. So if you really like the home then do your comparison analysis. Look for recently sold homes in the wider spectrum where your proposed home is located.

If you just believe the home is just an OK then low ball them. If you like the home then don't because you may lose the bid. The builder does not have to give you a reply. However, if the builder needs to sell the home then low balling may work. Good luck.

[gtbguy]

Originally Posted by Mokon

I am looking at a house listed at around 200,000. 3bed, 2bath, 1400sqft, just built.


All things considered about this house in this market and after looking at similar homes I feel 180,000 is a fair market value at this time with paving added to the contract.

I am thinking at going in at 170,000. Anyone have experiences with low balling builders? What are the chances here?

My gosh, offer him $150K and see what he comes back at. It never hurts to low ball a builder or seller in this market. All they can say is NO, this little two letter word never hurt anybody.

[buck naked]

when you insult a builder with a low ball offer - you take the chance of never being considered seriously as a buyer

to offer $30K less than the asking price on a brand new home is highly insulting - if you really don't care about this house, go ahead, do it - however, if this is a house you are seriously considering buying, then make an offer no more than $10K less than the buyer's asking price - then he will counter offer - and you may possibly get the house at $5K less

[BriInNH]

Originally Posted by buck naked

when you insult a builder with a low ball offer - you take the chance of never being considered seriously as a buyer

to offer $30K less than the asking price on a brand new home is highly insulting - if you really don't care about this house, go ahead, do it - however, if this is a house you are seriously considering buying, then make an offer no more than $10K less than the buyer's asking price - then he will counter offer - and you may possibly get the house at $5K less

Agree, complete waste of time for both sides.