Strategic Points Group: Buying Homes: Is there any room to haggle with the builder?

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Is everything really negotiable in real estate? Is there any room to haggle with the builder? How often are offers on newly constructed homes entertained in a market like this?

Today, no one knows if this "seller's market" will last as long as the "buyer's market" did. All new home builders know is the usual "supply and demand" thing. Factors such as land costs, material costs and labor costs are increasing, so is negotiation with many builders. There are always opportunities for a smart home purchase if time permits you to look and be patient.

Try to put yourself in the builder's shoes to think up what might be attractive to him. For instance, the builder, generally, would not consider lowering a price or offering an incentive to a potential buyer on a house whose construction has not yet begun. But he may think about it when it's one that is due to be finished within the next 30 days. Why? Because he'll incur a house payment on it at completion, on top of the cost he is already incurring for the land. If a house is this close to completion, he may want to turn it fast, because many new home builders base their margins on projections for closed sales. They will usually only deal on incentives, such as paying for your closing costs, throwing in a few upgrades, or not charging you a lot premium. Lowering the base price of the home can also affect values on planned homes in the area later on.

Is the home site in a location that is not so good, but it suits you just fine? How long has it been for sale? Does it have someone else's upgrades selections in it, but they're not all that bad? Whatever the average buyer may not like is what a builder may soften his position for.

Sometimes becoming a shrewd home buyer takes time and patience. It helps to have a watchful eye, and a good rapport with the new home sales agent. If you're looking for just the "right" situation, keep in touch with the sales agent, or drop by on a regular basis to find out what's going on in the community you're focused on. Ask them to call you if someone "falls out of escrow". Identify any home sites you would like to become a "back-up" buyer on, but be willing to make a fast deal. Timing can also be very important to a buyer, you strike when the iron is hot. Be sure that your financing pre-approval is done, and your down payment money is arranged before poising yourself for this scenario.

Builder closeouts are another place to find a good deal. The last few homes can become bargains, but you may need to take whatever you get in terms of location. Still, if values all around you are higher and home values in general are on the rise, it could turn out to be a winning deal.

We're all good at pointing out the "should-haves and could-haves" of real estate. Cutting a good "deal" on a new home in this market, however, just could be one of those accomplishments you can boast about for years to come.

Try these other related FAQ sections:


			New Mortgage

			Refinance

			Home Equity

			Debt Consolidation

			Construction

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