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Through the experiences of agents and people who bought new construction homes did you pay full price?
I am looking at a new construction home. They list price is $444K and we priced out about 10K in upgrades. Final price is $454K.
Am I crazy to make an offer of like $420-430K or maybe even lower. I hear all the time that builders don't move on list prices. I find that to be BS IMO, but I don't really know. Just looking to see what others have experienced in these cases.
In most cases, a builder isn't going to be willing to budge on the price, because it means that the next house he builds of that model will use yours as a comp, and he will get less for it.
If it is a custom home, that is less likely to be true, and the builder might be more willing to negotiate.
But also, it depends how long the house has been on the market. If it was just finished, the builder is unlikely to budge, but if it has sat vacant for a while, they may just want to get it off the books, and be willing to negotiate.
But just like on existing (not new) homes, the comps are more important than the list price. If the home is overpriced, you should lower your offer. If the home isn't overpriced, don't expect them to budge.
In most cases, a builder isn't going to be willing to budge on the price, because it means that the next house he builds of that model will use yours as a comp, and he will get less for it.
If it is a custom home, that is less likely to be true, and the builder might be more willing to negotiate.
But also, it depends how long the house has been on the market. If it was just finished, the builder is unlikely to budge, but if it has sat vacant for a while, they may just want to get it off the books, and be willing to negotiate.
But just like on existing (not new) homes, the comps are more important than the list price. If the home is overpriced, you should lower your offer. If the home isn't overpriced, don't expect them to budge.
In my last two purchases (both new) there was not much room to wiggle on sale price (only a few %), but I got a lot of options for short money.
I was able to negotiate between 2 builders, i didnt change the contract price from 208k but i did get about $4k in extras for free when bidding him against another builder. Our builder also didnt require a construction loan so that was another benefit which the other builder was going to match.
Some of these builders are REALLY stressed right now. Using the criteria outlined above will determine if you can squeeze him at all. If he has bank loans to pay--not only on the subject house, but for a share of the infrastructure that goes with the house--he might be more desperate for cash and you can negotiate a better deal. Bid where you feel comfortable. Your agent should know a little something about how he is doing. Just be patient.....these builders can squeeze you to pay retail, and then turn around and cut 10% or more off the price to the next buyer, thinking that he got all the saps he could. Does he have more than one house for sale? That might be a tip on how much he needs $$$. Good luck. Don't be bashful. The worst he can say is no.
It really depends upon where you are.....In my area, you wouldn't get much off and it would only be in options ("dream kitchen" is the current special right now). New homes aren't having any problem appraising, at all. The exception is the small time, mom and pop builder. But the big guys, the national and major local builders, they know down the to price of each brick where to be. They've performed studies and know exactly how long it's going to take to market a home in their range and know down to the head count how many lookie-loos they have to go thru to get each contract. (80% of my business is new construction).
It really depends upon where you are.....In my area, you wouldn't get much off and it would only be in options ("dream kitchen" is the current special right now). New homes aren't having any problem appraising, at all. The exception is the small time, mom and pop builder. But the big guys, the national and major local builders, they know down the to price of each brick where to be. They've performed studies and know exactly how long it's going to take to market a home in their range and know down to the head count how many lookie-loos they have to go thru to get each contract. (80% of my business is new construction).
Then it figures why you ask a buyer not to bid low...
Its all about profits / beneficial for you... makes much sense.
I'd ask all buyers in my area to bid high too for the area I'm living in...
Because the result will be a higher appraisal for all the homes in the area & a lower slower decline when housing drop again... again it would be beneficial to me.
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