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John Straub's Blog

By John Straub | Agent in Fort Worth, TX

Negotiating with new home builders in DFW

Negotiation

New Home Builders in DFW, Tip #10
When you negotiate a contract with new home builders in DFW, remember that all concessions that you are receiving effect the bottom line, but not all of them effect it equally.

Congratulations, you are reading this and that means that you are very serious about buying a new home!Below you will find information to help you negotiate with new home builders in DFW.I must lead this off though by saying negotiating with new home builders in DFW is a learned skill and you as a buyer are best served having representation of a realtor who can help you organize and present your position in the best possible way to ensure you get as much as you can.

In the past I have worked with several buyers who said to me, “I am only asking for a $10,000 discount I don’t understand why the builder is saying No!”In each of the cases I can recall, there was more to it, such as included options, appliances, a waived or discounted home site premium, or the item that most often comes to mind included closing costs.You have to remember that if the builder is including something extra in the home or giving promotion it will diminish your room for additional negotiations.In the above instances the builder’s incentive is really a pre-negotiation with you.They have offered an incentive to entice you to move forward and factored the cost in to their financial margin of profit.If you think about it in this way, then the client did not just ask for a $10,000 discount it was actually much greater.New home builders in DFW are almost always offering a promotion or incentive of some kind to encourage you to buy now.To negotiate properly you need to know the cost of the incentive or promotion.

When you are negotiating with new home builders in DFW you might want to keep in mind that the $5,000 incentive is not quite $5,000 the way you equate it in your own mind.If you have been talking to builders already and have looked at their option page, you may have noticed that the prices seem a bit higher than they do at the big box DIY center down the street.There are a number of reasons for this but in the sake of brevity we will call this overhead costs that the builder pays and passes along to the buyer.So, if you are negotiating for options it is important that you adjust your expectations of what you will be able to get or adjust the negotiated amount.

There is one area that you as a buyer will have the most challenging time negotiating, and why it is not entirely a bad thing.I have 2 words for you “base price.” This “price” number is meant to evoke a sense of the bottom or the beginning, meaning from here things only go up.Many New home builders in DFW have a policy of not selling homes for less than base price.There are several reasons that builders will limit negotiations below base price including eroding profit margins, appearance of declining value in the neighborhood, and actually reducing appraisal values of future homes to name a few.Here is an area to choose carefully.Your goal in negotiation is to get the best deal possible,just remember that the best deal today is not a good deal if it costs you later….

I hope you have enjoyed new home builders in DFW and found the information informative. In the next post I will be talking more about the contract. If you have any comments on the material or questions please do not hesitate to contact me directly 817-729-4281 or john@dfwfamilyrealty.com.

Check out some of my previous blogs:

New Home Builders in DFW Information to help you get the best deal working with a new home builder

Cinemark Alliance Town Center Details about this great new theater

Home Buying "A Short Course" Basic information on the process of buying a home


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