Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
My wife and I are in the early stages of planning to buy a newly constructed home. Historically the houses we've purchased have all been existing construction and so we're not sure about what sort of flexibility to expect in the process.
Can builders be negotiated with or are the prices generally set in stone?
They won't budge on the price as it sets a new "comparable." What they will do is throw in upgrades. You will need your own buyers agent to protect your interests. Their sales people owe their allegiance to the builder. You will need phased independent inspections from your inspector.
You have more negotiating room on a spec home than on a presale.
Builders are more motivated to move inventory they have already created, that has tied up their credit line, rather than to negotiate pricing on a home they build for you.
Carrying a bare building lot is much less expensive for them than carrying the cost of labor and materials on a spec house.
They won't budge on the price as it sets a new "comparable." What they will do is throw in upgrades. You will need your own buyers agent to protect your interests. Their sales people owe their allegiance to the builder. You will need phased independent inspections from your inspector.
If you choose to use a buyer's agent, you should understand (up front - not at closing) any bonuses or other incentives (including any related to aggregate sales targets) that may be offered to your buyer's agent by builders. I believe that these things differ by area but you need to understand any and all potential motivations of those who represent you.
My wife and I are in the early stages of planning to buy a newly constructed home. Historically the houses we've purchased have all been existing construction and so we're not sure about what sort of flexibility to expect in the process.
Can builders be negotiated with or are the prices generally set in stone?
You can absolutely negotiate everything with a builder. While it is rare to reduce the base price of the model, the following are always in play:
Lot Premiums (better location/size)
Upgrades (all that glitz and shine)
Closing Costs
Timing is also a very big deal. These big builders all have sales targets, etc. your optimal time to go under contract would be near the end of the phase (last handful of homes, then the builder moves on), right at the end of a fiscal quarter or year.
Depending on your market, I’d set a target of about 15% of the base price in concessions that I’d want.
If you choose to use a buyer's agent, you should understand (up front - not at closing) any bonuses or other incentives (including any related to aggregate sales targets) that may be offered to your buyer's agent by builders. I believe that these things differ by area but you need to understand any and all potential motivations of those who represent you.
I can't speak for all states obviously but in NC we are REQUIRED TO DISCLOSE such incentives PRIOR to buyer writing an offer. Which means the incentives to agents have largely - not completely - disappeared. Which is fine by me. Whenever it was possible, I just had them give the money to my clients.
I can't speak for all states obviously but in NC we are REQUIRED TO DISCLOSE such incentives PRIOR to buyer writing an offer. Which means the incentives to agents have largely - not completely - disappeared. Which is fine by me. Whenever it was possible, I just had them give the money to my clients.
For transparency and trust it should be disclosed prior to viewing houses, not after the client has emotionally committed to the the property enough to decide to make an offer. Also, most people make an offer on ONE home at a time so the information is given in isolation for only that one home, not across all builders considered on the short list at least. The whole idea is to be open about the various incentives across the choices. There is no implication that anyone is doing anything wrong. It's just transparency and trust with a client.
Info disclosed should be - value of incentive and terms of it (e.g. customer has to close by end of May or order whatever upgrades, Sign and make deposit by end of the week, etc).
For transparency and trust it should be disclosed prior to viewing houses, not after the client has emotionally committed to the the property enough to decide to make an offer. Also, most people make an offer on ONE home at a time so the information is given in isolation for only that one home, not across all builders considered on the short list at least. The whole idea is to be open about the various incentives across the choices. There is no implication that anyone is doing anything wrong. It's just transparency and trust with a client.
Info disclosed should be - value of incentive and terms of it (e.g. customer has to close by end of May or order whatever upgrades, Sign and make deposit by end of the week, etc).
That’s a gigantic reach.
YOU may buy emotionally. YOU may only consider one house at a time. YOU may think a lot of things.
There’s far too much “consumer protection” out there as it stands. What you continue to advocate for is government overreach.
For transparency and trust it should be disclosed prior to viewing houses, not after the client has emotionally committed to the the property enough to decide to make an offer. Also, most people make an offer on ONE home at a time so the information is given in isolation for only that one home, not across all builders considered on the short list at least. The whole idea is to be open about the various incentives across the choices. There is no implication that anyone is doing anything wrong. It's just transparency and trust with a client.
Info disclosed should be - value of incentive and terms of it (e.g. customer has to close by end of May or order whatever upgrades, Sign and make deposit by end of the week, etc).
Warning! Warning! Warning! Thread hi-jack in progress. Prepare for derailment in 3...2...1....
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
