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I'm a little confused and I am not sure if I will really get a straight answer here but here goes nothin. I am in the market for one of the many spec homes in N.Raleigh in the 700k-820K range. All I hear is that the "custom builders stay pretty firm on their pricing don't expect them to move too much." I swear I have been looking at the same 10-12 houses for sale for at least 6 months, most even more and find it hard to believe that the market is holding firm. Is this just people artificially trying to keep the high end market afloat so as to protect their own potential profits or what. Are taxes that low and interest rates so low that the builders can afford to sit on these properties for a year or are market forces not really at play here. I know the market is supposedly healthier in the Triangle than the rest of the country but that doesnt change the fact that there seems to be a large inventory of these spec homes that are just sitting there. Some realistic insight and any recent experiences would be most appreciated.
From my experience, the homes in that end are sitting longer, and there has been some movement. I was actually looking at a listing in Fuquay earlier that had been reduced from 700 to 662. Get a good agent, and open your range, and you may find some good opportunities.
I think the more expensive a house is the longer it will be on the market. I imagine builders of those houses expect the house to take longer to sell so they're in it for the long haul & have prepared for such. I'm not saying there is no neogiating room because I have no clue, but as with anything else the cheap stuff sells faster & in more quantity than high end stuff.
All fair and credible points and I appreciate the insights. Believe me I'm not looking to insult anyone with lowball offer nor do I have any false delusions of a fire sale. You get what you pay for. Just trying to figure out where to start and not ruin my credibility. Although a buyer in this market with secure financing, no home to sell, no contingencies, that can close within 60 days should seem pretty credible to these guys. We'll see where the chips fall in the next couple of weeks.
Bones69 you asked a great question and MikeJ made an excellent point IMHO. What you need to ask yourself is what are you willing to pay for one of those homes. Forget asking price, that is set upon market conditions and the longer its on the market the less the market condition of the set price matter and that is in both directions. With all the inventory available shopping around for best VALUE and I don't mean PRICE, should be no problem.
Remember, its YOUR money that you will be spending. Now you have to find a BUILDER that wants it more than another. Than you will have YOUR market price. No one to really insult in that scenario except YOURSELF if you pay to much in this slow market.
Good luck and I'm sure you will find exactly what you are searching for.
All fair and credible points and I appreciate the insights. Believe me I'm not looking to insult anyone with lowball offer nor do I have any false delusions of a fire sale. You get what you pay for. Just trying to figure out where to start and not ruin my credibility. Although a buyer in this market with secure financing, no home to sell, no contingencies, that can close within 60 days should seem pretty credible to these guys. We'll see where the chips fall in the next couple of weeks.
Money talks. Offer a larger deposit, and your offer looks a whole lot better. It also helps if you are willing to use their preferred lender, if they have one.
I hope good builders know that in this market they need to either low their price, offer incentives or they aren't going to be able to sell a 700-800k house.
My neighborhood (Kitts Creek) has custom homes up to the 700's and they are offering incentives to sell their higher priced homes. I don't see that as a bad thing, with the way the economy is, its better to sell then hang on to a house that may or may not sell for another year due to the high price tag.
I wish you the best of luck with your home search.
A lot of the time the builder has to decide if he really believes the house will sell AT SOME POINT, at or close to the asking price. A lot of this has to do with experience and precedent.
In the case of Kitts Creek, with no disrespect intended, a $700K home in that neighborhood is a pretty big stretch IMO-simply not what most homes in the neighborhood sell for. It's never a good idea to buy the most expensive home in the neighborhood, and it probably wasn't a good idea for Experience One to push the envelope that far. So, they blow out a few top-end homes in there and they don't build any more.
In the case of a neighborhood where 700K is more in the median range for homes in the neighborhood, a builder will probably look to stand tall for a longer period of time if he can afford to. He may look to let a home go if it's on a lot that is clearly inferior to the others in the neighborhood, but that's not a smart buy-when you go to sell you will have the same difficulties he may be having.
I think an offer of 90% of asking would be perfectly reasonable on a completed home with a $700K price tag, and I would do all my due diligence-get comps, look at the permit date on the lot at wakegov.com to see how much time the builder has invested in the property, get an MLS history on the property, and look at how many other complete homes the builder has in inventory in ALL of the neighborhoods they build in.
Smaller,custom builders often have less "fat" that they can trim from the asking price, so they really don't have the room to offer thousands in incentives. They also don't have to answer to shareholders. I would suggest making an offer, and when the builder counters, work from there. You never know, they might just accept your first offer.
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