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In the last 6 months, who here has purchased a new construction home, either inventory or signed a build contract, and how much were you able to negotiate off of the price - either the listing price or the base plus options price of your particular build?
Please also include any incentives etc.
I am looking at a house where the base price for my floor plan is $315,000.
After structural options it comes to $340k, and then with upgrades it's about $375,000. Subtract from this that they are giving me $15k in incentives and it works out to about $360,000.
Simultaneously, there is an inventory home with way too many upgrades listed for $450,000 and hasn't been reduced in 4+ months on the market
Do you think any builder in today's market would take a low-ball offer of $360-$375k to move the inventory house that's been sitting or would they be more apt to agree to an offer of $340k on the custom new-build?
I negotiated 20k off my contract price last month. I signed in May, house was all but finished, and they slashed inventory houses which became my comps. I played hardball and they knocked it from 340k to 320k.
They would probably be more willing to negotiate with the inventory home due to carrying costs and it's adding to the DOM for the subdivision average. Now would they drop the price 90k is another story. Most likely no but it never hurts to ask and see what they come back with. My wife and I negotiated a drop in the base (had the elevations upgraded for same cost as base elevation), had the lot premium waved, had 2k towards closing covered (plus by using lender we got free fireplace, master bath upgrade) and knocked about 8-9% off of the total after all the other discounts were there on an build. They were trying to close out the phase, it was winter and I believe the agent/sales manager may have been desperate PLUS we guaranteed if they had it built we would close before the end of their fiscal year so the revenue would count for them in 2007. A lot of those factors we could research but some were just timing and luck.
Depends on the builder production builders tend to have to negoitate less, but will give you the incentive package. If you go to a local builder most of the time many of the extras that you are currently paying for will be standards as well as they will be more negotiatable as they don't hold tons of extra capital to build out the entire subdivision without selling some first.
Within the next couple of days I am going to be negotiating a contract for a new build townhome. My realtor has done some preliminary discussion with the builder sales agent and gets the impression that the price is what it is. No free upgrades and no movement on the price.
We have not sat down with the sales agent to go over the contract, but is this normal in most cases in the triangle area for new builds in todays market? Also, what are everyones thoughts on new builds price appriciation? Will it most likely go up, stagnate or will we see builders offering more increased insentives to get people interested in building in the area?
To address your appreciation question the answer is we need more information. Your location, comps, surrounding area, proximity to outside amenities (stores, shopping, civilization) will be a factor in your appreciation. The school district you are in (which will most likely change anyways) availability of inventory homes or larger homes and price of those homes is a factor. How well you maintain the home, your upgrades etc, how much you are paying in relation to how much it's worth.....if you are paying more than you should then you are probably already in the hole in this market. Lots of factors to consider but most likely you should see appreciation over the long term....it's just impossible to get an answer with more than 60% certainty if that. Does that sound about right Realtors?
Within the next couple of days I am going to be negotiating a contract for a new build townhome. My realtor has done some preliminary discussion with the builder sales agent and gets the impression that the price is what it is. No free upgrades and no movement on the price.
We have not sat down with the sales agent to go over the contract, but is this normal in most cases in the triangle area for new builds in todays market? Also, what are everyones thoughts on new builds price appriciation? Will it most likely go up, stagnate or will we see builders offering more increased insentives to get people interested in building in the area?
Honestly, it depends on the development. If the sales are going well, and the location is good (which of course is reflected in sales) then there will not be as much negotiation on the part of the builder. If there inventory is scare, not as much negotiation.
As far as appreciation, hard to tell. Generally though if you are one of the first people in the neighborhood, you will get more appreciation than, let's say the last person. Have your agent pull the comps for the neighborhood (if there are any at this point), that may help you as well.
Leigh
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