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Ok, agents feel free to chirp in here...if we were to buy a brand new home, one that was a spec house for the builder, has been on the market several months, couple of price drops..how does one go about making an offer on something like that. Should we have an agent do it for us? Can we do it ourselves. We bought a brand new home several years ago, but it was built for us, not a spec house..Do we go in with an offer and see what happens..are they usually willing to deal?
If we use an agent, are they less likely to drop their price due to paying a commission? I am just fishing here, this is something we might do in a few months, or sooner...we have to see...just wondering what is the best way to go about something like that. We need to have a financing contingency, but we are coming in with about 65% down..
You are free to go either way but I'd say find an agent familiar with the builder. It won't hurt you but the agents knowledge of the builder could provide some value. On new construction from my experience buyers with agents are treated better than buyers w/o agents. The builders know agents bring them business so they want to keep the agents happy, which in effect means keeping their buyers happy.
dogmom, I would use an agent to represent you. they should know what is going on with the new neighborhood and what concessoins the builder has been giving. Maybe better than you were thinking!! yes, builders will deal on Spec houses. that is money tied up and the bank wants the builder to get rid of it!!!!
thank you..needed to get some other opinions...We would only have so much to spend on a house so we have a 'cap' so to speak of how much we can pay..thanks again..
dogmom, I work for a real estate company that works with a builder. In our case, the agents from our office work as BUYER'S agents only (except for the Principal Broker - he's the listing agent and works for the builder AND for the buyer - its called dual agency in Oregon).
Generally, there won't be any savings to the buyer for not having a real estate professional on your side - they are paying a contractual rate to their agent and he/she will either split it with YOUR agent, or keep it themselves. There ARE cases where you might be dealing straight with the builder and no real estate agent involved...but those are very rare.
Having a good buyers agent can help you answer the questions about how much room there is for negotiation and what types of concessions will best meet your needs. One consideration should be that builders will have more incentive to deal on inventory that has been sitting. There is much LESS incentive on a house that is still under construction. Also, builders mostly would prefer to provide additional upgrades rather than cut price (add central a/c, back or side yard fencing, landscaping, etc...) This is harder with a house that is complete (they aren't generally going to tear out existing counters or flooring and replace them...) but things that are easily done are fair game.
Be careful of incentives that tie you to a specific lender. That is not always a bad thing, but sometimes the incentives that are offered through the builder's lender aren't really as good as they seem. Closing costs that are "eliminated" may show up in differences in rate...or rate discounts may show up as additional closing costs...just be careful.
A financing contingency is pretty normal - as long as you don't have a house to sell contingency you have pretty good leverage. Also - make SURE that you get an inspection (even new construction!). It's worth the money for the comfort of knowing your house does NOT have problems. I've seen new construction (not the builder I work with) where there was no insulation in the attic.
Thank you Dave, I didn't really understand how that worked, and you explained it magnificently! The home we are 'maybe' interested in is an inventory home, I can't think of any upgrades I would want except maybe backyard landscaping but that is not a big deal..would give hubby a project.
This particular home has been sitting for at least 6 months, maybe they are ready to get rid of it..we are still thinking about it. Many thanks..
We have bought a few new homes from builders in the past and depending on the builder, the "discount" off of the list price for a spec home was anywhere between 5-20%. Some builders have an inflated listing price and immediately dropped 15-20% off of the listing, without us even negotiating. Other builders had prices close to what they were willing to sell for. Local, experienced agents seemed to know which builders practiced the large discount option and which builders priced more realistically. For example, our agent would show us homes priced 10-20% above our budget for builder A since they were known to drop 60-80K but we would stay within range for builder B since they were known to list closely to what they expected to sell for.
Of course, this was all when the market was better. I would think in this market, depending where you are, it wouldn't hurt to offer quite a bit lower than what the builder has it listed for.
We have just put down a binder on a new construction home where the price was already reduced $30K off of the regular price, already had about $7500 in upgrades in it, and they gave us another $10K in upgrades on top of it. This is all with using our own lender. There definitely can be some wiggle room on a house that they are sitting on. Not so much, however, on prebuilds.
Ok, agents feel free to chirp in here...if we were to buy a brand new home, one that was a spec house for the builder, has been on the market several months, couple of price drops..how does one go about making an offer on something like that. Should we have an agent do it for us? Can we do it ourselves. We bought a brand new home several years ago, but it was built for us, not a spec house..Do we go in with an offer and see what happens..are they usually willing to deal?
If we use an agent, are they less likely to drop their price due to paying a commission? I am just fishing here, this is something we might do in a few months, or sooner...we have to see...just wondering what is the best way to go about something like that. We need to have a financing contingency, but we are coming in with about 65% down..
Thanks..
Well hello Barb!
You knew if I saw this, I'd be giving you advice lol
Do you need a buyers agent? Maybe, but probably not.
Some places might not want to accept a lower offer if they have to pay extra agents. If you do a search of this forum, someone posted reason's why and how they figure commissions into the price.
Do you have an attorney? If not, get one and find out exactly what they would do for you. Possible they can do the bargaining.
Next, most builders are hurting. When we bought this house it was already spec'd out by another buyer that backed out. What we ended up doing was made them an offer, but we took $25k of upgrades out.. the house wasn't started yet.
Since it's a model & you can't pick or change stuff, I would go in a bit low and see if they will accept it. The worst they can say is no, then you up the offer. Is it coming furnished?
Hi Sue...hehe I was trying to stay under the radar...no I am kidding..hubby saw this particular home but it has since had another offer. That's ok, I am still recovering from the last ordeal!
Great advice as always We did buy a new home once a few years ago, but we purchased it before it was even built, in fact, that was in 2003 when people actually lined up to buy homes, lol. There was no wiggle room, if you ddn't want it, they just went down the list.
Times have changed haven't they....we will still keep our eye out for something..living in our mobile is fine, but not permanent and the dogs are needing a backyard to run in...will probably be a loooong winter
Thank you everybody for your advice, I really appreciate it. I honestly don't know what I would do wthout this board and the friends I have made...
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We did buy a new home once a few years ago, but we purchased it before it was even built, in fact, that was in 2003 when people actually lined up to buy homes, lol. There was no wiggle room, if you ddn't want it, they just went down the list.
