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Old 12-19-2007, 03:51 PM
 
Location: Maryland - Howard County
195 posts, read 743,352 times
Reputation: 60

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I'm sure you can negotiate on some options but the trick, if you're on a budget, is to always do now what you CANT add later or things that would be more costly to do later. Examples:

1. Ceiling Heights on all levels including basement - once the foundation is poured, your basement ceiling height is permanent. I would HIGHLY recommend a 9' ceiling at least, in the basement

2. Fireplaces - how many and where they will be

3. Elevator - if you want one in your home

4. ALWAYS go with the additional square footage and always have your kitchen top notch (better for resale)

Those are just some examples and there are many more. Using an agent, in the area to which you are moving to, who has new home construction experience may be beneficial. They will be able to give you advice on the above and also too, they may help you with selections that would be better for resale. I don't know if your builder will honor an agent so late in the game, but if you're not comfortable or want the advice, I would seek it out - make sure you are up front with that agent though.
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Old 12-19-2007, 04:32 PM
 
Location: Albany, OR
540 posts, read 2,169,484 times
Reputation: 359
Throwing my 2 cents in...

The state where the builder is likely has some certification procedures / authority. In Oregon it runs through the Contractor's Board and all of the licensing information, as well as any violations or outstanding issues are available there (you can get it online). That would be my first step in "checking out" the builder.

I'm assuming that you obtained some references from others who have worked with the builder...and called them to see what issues they had, how happy they were, etc...as part of your decision process on which builder to choose. Perhaps touching base with those people again could give you some insights into how the builder negotiates...

I echo the sentiments above that you would be wise to have someone with "eyes and ears on the ground" there to keep an eye on the build and let you know of any issues. Depending on where you are building your home weather may play an important role. Is it rainy season and the house has been framed and roofed...and they are putting the sheetrock on without drying the house out first? (seen it done here in Oregon! Yikes) Your rep there could let you know that. A GOOD buyer's agent will be doing things like that for you; occasionally going by the build to take pictures for you and point out things of concern. (Not pushing the issue, just making a point)

Another thing to be aware of is the financing issues. It can be confusing depending on how you are doing it, and who is taking the financial risk. Are you going to be paying the builder at pre-set stages/milestones? Is the builder paying for everything up front with you paying him at closing with a loan? How reliable is this builder at paying the sub-contractors? Make sure you know the local law regarding things like "Early Issue Title Insurance" and Construction Liens.

Good luck; I mean that sincerely. You are making a huge investment, with considerable risk involved (even if you are in the same TOWN)...I'm sure it is a little more scary doing it from such a distance.

As to negotiating...builders typically don't have a lot of room to negotiate on a custom build; they are potentially giving you a firm price on a project in which they don't yet know what their costs are going to be. If material prices go UP...their profit margin goes down. There is LOTS of room in this market to dicker on standing inventory, not so much on a house that's still "to be built."
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Old 12-19-2007, 04:58 PM
 
354 posts, read 1,216,110 times
Reputation: 90
Quote:
Originally Posted by DavePautsch View Post
Throwing my 2 cents in...



As to negotiating...builders typically don't have a lot of room to negotiate on a custom build; they are potentially giving you a firm price on a project in which they don't yet know what their costs are going to be. If material prices go UP...their profit margin goes down. There is LOTS of room in this market to dicker on standing inventory, not so much on a house that's still "to be built."
You can negotiate on a custom build. I just did. Knocked 60k off the price from one builder and waiting for a quote from another one. You just got to make sure that you got all the options, specifications and all the costs in before you negotiate. That is the absolutely last thing you should do.

Builders know they can squeeze the subs now. Also the builders are willing to work for less margin. I got the builder markup down to cost +13% to arrive at a fixed cost contract and the lot at builder cost. Plus the supervision fee (26k) got taken out. And there was no major resistance from the builder.
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