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I have heard that the prices on new constructions are near fixed, and I should negotiate options. Does this price fix apply to new constructions "inventory" units as well? (i.e. Where the options are fixed.) I was informed by the sellers agent that the options could not be changed. If the price fix, what other options exists for lowering the price.
I have heard that the prices on new constructions are near fixed, and I should negotiate options. Does this price fix apply to new constructions "inventory" units as well? (i.e. Where the options are fixed.) I was informed by the sellers agent that the options could not be changed. If the price fix, what other options exists for lowering the price.
Nothing is "fixed". You will have a better chance of negotiating down on an inventory home though that a new construction. An inventory home has carrying costs that the builder would rather not have. The trade off is that you may not have all of the options you want. My wife and I decided we would rather pay the difference (more) to get exactly what we wanted.
You can usually negotiate once the total price for the home is established after options are chosen (if your builder has that price before signing contract). If not then I am not 100% sure but I would think you could negotiate off of the price of the land, base and or elevations. If you do not have the options selected you will most likely already be under contract before you can negotiate on options (I could be wrong).
We got the lot premium waved, the elevation upgrade waved (siding to stone front) and we got about 9% off of the total price after that. Depending on where in the phase they are, how long they have been trying to close out the phase, etc. will determine how much you can get off. GET A BUYER'S AGENT and they can give you comp prices for the neighborhood, know about incentives the builder may not be throwing out there and also have some connections with the builder especially if they are building in other neighborhoods. Also, ask to deal with the sales manager when it comes to the negotiating. They are usually the one the on site agent calls anyways.
Typically you can get "money off" on inventory homes, but it depends on a lot of things, how long the house has been on the market just sitting, how quickly homes are selling in the neighborhood, the previous home sales, etc.
As saturnfan said, getting a buyer's agent does not hurt you, but can only help. The seller's agent works for the builder, they are watching out for the builder. They can help you negotiate, etc.
Normally on spec homes they don't change the options, unless the home is custom built, then you can work with the builder. In each case though, they will charge you extra for those changes.
we negotiated lot premium, elevation and all the upgrades upto 35K in our new construction home. extra 5k towards closing cost. once you add up all the things then negotiate with sales person (the desired price you decided). it may work out for todays market
we negotiated lot premium, elevation and all the upgrades upto 35K in our new construction home. extra 5k towards closing cost. once you add up all the things then negotiate with sales person (the desired price you decided). it may work out for todays market
Was this 35k number you gave inclusive of free upgrades already being offered, or did you complete the options worksheet including the incentive, come up with the price, and then negotiate 35k off of that price?
Quick note about buyer's agent. I have looked into three, and all three have tried to show me other properties after we have expressed our interest in this one. So my wife and I have decided to my an offer on this property by ourselves. If negotiations do not go smoothly, we will walk away and go with an agent.
Having said that, I'm looking for a general feel about negotiating for a new construction inventory. I was thinking about startng 8%-10% of asking price. Looking for some of the negotiation results out there for comparison.
No one can just tell you to offer 8% to 10% lower than asking price because it depends on THE NEIGHBORHOOD. There are so many factors that go into it but without an Agent to pull comps for you, you really don't KNOW.
If you had THREE AGENTS trying to show you other properties other than the one you want, I'd wonder WHY.
Keep in mind that the seller's agent is experienced in negotiating and you may not be. Also, after contract, the fun begins! What happens if there are any issues that arise? Who is going to help you get them resolved? The seller's agent? I think not.
Call one of your 3 agents and explain to them that you are adamant about the particular neighborhood that you have chosen and you'd like their help. There are alot of agent with no skills in negotiating, pick the one of the 3 that you think has the most experience with new construction.
Look, it wasn't like they said, "ohhh that property....." or anything remotely like that. The just started shooting over other properties. Anyway, I'm glad an agent worked for you. But, we are passed that point. I'm looking for negotiating tips. Not agent advice. So if you want to help, explain how your negotiating process was like. Or Vicki, tell me some of the more common pitfalls (i.e. hidden fees or fast-ones that a builder may try) you have encountered.
Also, I understand it maybe hard to comment on something that has taken many years to learn. But, 18 years of professional experience has shown me the better you know something the easier it is to explain to someone who knows nothing about it.
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