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Myoder2005, Home Buyer in Denver, CO

I am considering buying a new build in Denver. How desperate are homebuilders to make a deal to sell a new home?

Asked by Myoder2005, Denver, CO Tue Aug 31, 2010

I am looking at a new home development in Denver's Stapleton neighborhood. KB Homes is the builder. How low can I bid on a $350,000 house?

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21
Builders will usually make a good deal on spec homes. However, if you can find a spec home in a neighborhood the builder has already completed, you may find an outrageously good deal. If you happen to be shopping in the Southeast Metro Area and want a huge house, with unbelievable upgrades, I know of one selling under $400,000 in a neighborhood of homes that are selling in the $500,000's and up. The builder sold everything else in the neighborhood and buil this one specific for a buyer who couldn't close on it. I also know of a neighborhood more East with a handful of spec homes that haven't sold yet that they will most likely make a good deal on . They are currently priced in the mid to high $200,000's. If this isn't the area or price range you're looking at, find a Realtor who works the area that you're interested in and have them help you negotiate the transaction. The builders know that over 80 percent of their business comes through Realtors, they are more likely to negotiate a better deal with a Realtor then with an individual. They want us to keep bringing them more clients, we bring volume and therefore get the better deals.
I hope you get your home!

Sandy Kinslow
The Kinslow Team
Coldwell Banker Residential Brokerage
kinslowteam@aol.com

Web Reference: http://www.coloradohomes.com/thekinslowteam
3 votes Thank Flag Link Thu Sep 2, 2010
I'm not desperate, but I have one new home left in Denver's nicest neighborhood @ 3070 S. Jackson St.. (MLS 976334). Wellshire has Slavens School, bigger lots, several other top rated private schools, little traffic, terrific access to light rail, highways, shopping, country clubs(5 minutes to Cherry hills), 3 major hospitals, walk 2 blocks to golf or Eisenhower Park. The home is main floor mastered, and has a loft upstairs. See the floor plan and a virtual tour @ http://holbenhomes.com. I'm also a licensed real estate broker, so you get that added benefit ,too.
0 votes Thank Flag Link Sat Mar 12, 2011
Hi -- I'm guessing your question has already been answered, but I just found it today, Friday, March 11

Interestingly, I am helping one of my buyers close on a bank-owned "new build" in Stapleton on Monday. The original price was $369,900 -- we bought it for $299,900 and they paid $5,000 in closing costs. This home was never lived in and was part of a bankruptcy for one of Stapleton's original builders.

Be VERY careful about buying new, especially from KB... seriously. KB's is truthfully one of the worst builders in Denver ... period. Shoddy work, cheap materials, high prices. New builds sound great on paper but rarely make a lot of sense, especially in this market. Chances are you WILL overpay -- builders don't "deal" as much as people think, and you will be responsible for installing a back yard, sprinkler system, new window coverings, landscaping, etc. That will add up to at least $30K out of pocket that you'll never get back.

A better idea? Buy a "new" to "newer home" with everything already in place. The price wil be lower guaranteed and you'll save a ton of money. I hope that helps ... if I can answer any other questions, please contact me at 303-906-3150 or email juliemontgomery@remax.net. Best of luck! Julie Montgomery, RE/MAX Masters, Inc.
0 votes Thank Flag Link Fri Mar 11, 2011
Well first off Mr or Mrs home buyer. If you are going to make an offer and want to bid low then be prepared to keep looking in case your offer does not get accepted. If you are willing to take the risk then by all means do so. If you are in love with the property then make an honest offer. If you don't know the values I suggest getting a Realtor who is familiar with the area and have the Realtor run some comps so you will know exactly what simiar homes are selling for. Sometimes you may get a deal on a home if you are looking in a area where homes are not selling very quickly and the builder needs to exhaust the inventory to move on to another project.
Good luck with your offer and if you need assistance let me know.

Prudential
JOHN SANTANA
JohnSantana4Homes@yahoo.com
(909) 230-8300
DRE. 01463515
0 votes Thank Flag Link Tue Sep 7, 2010
Hello,
After 16 previous answers to your question, let see if I can offer you something more or different. Sure, in general, builders are definitely motivated to sell. BUT every community and every builder and every home plan within that community have many variables which factor into their motivation to sell. It isn't giving you the best advice for me to just say "yeah! builders are hurting-- go in there with a low-ball offer!" So my honest answer to your posed question "How desperate are home-builders to make a deal to sell a new home?" is "I don't know, yet but I will find out."

To elaborate-- It is because of all the variables going into each scenario for a builder that a home-buyer absolutely have an agent at their side-- which is the main message you heard from every agent responding. To clarify, an agent who has experience working with builders, understands their "side" of the picture and has a keen sense of how to get at the information necessary to secure the best terms for you. There is just too much to know and understand for a buyer to discern and figure out. A skilled and experienced agent will know how to look at the "big picture" and advise you accordingly. Yes, we do have ways! A builder isn't going to just give "it" away to a buyer who walks through the door with or without an agent-- one has to know how to ask and negotiate. Having an agent on your side makes the process far less stressful for you too. Wouldn't you rather just be able to sit back and let your Buyer Agent work for you? At no cost to you?

That being said, given the price point you mentioned-- it looks like you are considering one of the Martha Stewart Collection homes as I know that this collection's base prices are starting in the low $300's where as the Paired Homes are in the low $200's. Specifically, are you looking at Plan 2084? The reason I'd like to confirm your selection is that as a Realtor who lives and works in Stapleton, I make it a priority to stay in touch with each builders progress and I do know that for this particular community, they do not have spec homes or standing inventory. (which could certainly have given you leverage) These homes are "built to order"-- as described by KB so they only begin building one when a contract has been written/approved. Not having inventory certainly keeps their holding costs down and doesn't create a huge sense of urgency to sell. However, the other point I will bring up is that Plan 2084 and 2 others (out of 6), have recently had their base prices reduced. 2084 was previously at $359,995 and is now at $349,995. Given this price change in the 3 larger plans, that tells me that they are having some trouble "moving" them. (Plan 1958 was previously at $352,995 and now $13k less at $339,995) Does this give you an edge? Maybe. It would seem that the smaller plans are selling and they needed to do something to stimulate sales in the higher-priced plans. (looking at their current plan, do you see many of the smaller homes going up? are there many higher-end ones on schedule to build? just a quick analysis of this could give you some answers to their motivation to deal with you) Will they take less? Maybe. But there is still a "bigger picture" here-- you have yet to select your upgrades which changes the picture for the builder. Sure, they can agree to a lower base price and make you feel like you secured a great deal but then they can make it back up in your upgrade selections. So, if you ultimately end up in the same place on a final price, have you really gotten anywhere?

These are just a few of the variables that need to be considered-- there are more but I am running out of character spaces...

As a Realtor who has been on both sides of the desk in this type of scenario-- I've worked for a builder and have represented home-buyers like yourself as a Buyer Agent many times. Please know that our work doesn't stop at an accepted contract by the builder-- we are there each step of the way to guide and advise you accordingly. You've got multiple walk-thru's during construction, finish selections to be made, the inspection of the home (even though it is new, you should still have one done!), appraisal issues/concerns, understanding all the builder docs they will require, possible delays, and eventually closing on the property. And again, remember, our services are free to you-- we are compensated by the builder. So, unless you have gotten too far into the process with KB where they will not agree to you bringing a Buyer Agent in-- call one!

If you feel my answer above has served you-- please feel free to contact me. I would certainly love the opportunity to share more of my knowledge and expertise to help you secure the best terms and details on your behalf.

Best Regards,

Deb Goetz
Realtor®, GREEN Designation
Weichert, Realtors® Unique Homes
cell: 720-628-9502
deb@debgoetz.com
Web Reference: http://www.debgoetz.com
0 votes Thank Flag Link Wed Sep 1, 2010
With new home sales, not all sales are recorded in the MLS. So, I would suggest a combination of an experienced buyers agent researching the recent sales in the MLS as well as public records. For the most part, builders that are producing homes right now have adjusted to the market both in size and price. You may find that current homes are not that "desperate". Now if its been built for 2 years.. .that can be a different story.

I worked for a developer in both construction management and sales. Let me know if you have more questions and best of luck with your purchase!!

Pete
0 votes Thank Flag Link Tue Aug 31, 2010
I always suggest to a buyer to get prequalified first to know your own borrowing power limits of what you can spend on a home. Once you are prequalified, then start your bidding war with the builder. The bank can then redraft a prequalification letter based on your offer to the builder (based on what you wish to bid). You can be prequalified for a more expensive home, but get your letter tailored to what your bid is. Hope this helps and good luck to you.
0 votes Thank Flag Link Tue Aug 31, 2010
I don't think I'd use the word 'desperate' how about... they have a slew of incentives at the moment. Builders want to encourage you to come take a look at their products. Now is the best time possible for a new home purchase.

KB (Paired Homes, or the Martha Stuart Collection), and there's the Wonderlands that are in your price range. Not to mention the variety of homes that are up for resale. Your options are varied and there are plenty.

If you would like to peruse Stapleton and specifically the KB homes I'd be happy to figure out which models fit you best. Once you determine the appropriate model - we can work together to submit an offer that is most comfortable to you and suites your needs.

I'd be happy to help out. Feel free to give me a can anytime and we can get started right away.

Enjoy your day,

kimdavis, GRI
broker associate
the Nicholson-O'Donnell group
Re/Max of cherry creek inc.
c 303.218.8373
FindYourSpace@Me.com

finding space that fits who you are... selling space that no longer works.

Stapleton's "2009 Top Performing Realtors" - the Nicholson-O'Donnell group
#9 in Colorado, Most Homes Sold in Denver, March 2010 - the Nichoslon-O'Donnell group
0 votes Thank Flag Link Tue Aug 31, 2010
Myoder2005,

Good success in your home purchase. Having sold KB and other new homes in Stapleton over the years, I would say that you need to determine what is reasonable, comfortable, and and affordable for you after getting pre-approved with a lender. Then make an offer to the builder after consulting with your Buyer's Agent. Then look very closely at the incentives that the builder is offering in conjunction with their 'preferred lender' and be sure and get a second opinion with your own lender. I have had my lenders beat the preferred lenders deal on several occasions and gone ahead to close the deal.

Stapleton, as you probably know is the favored new home area community in Denver. Over their 9 years of exixtence Stapleton has been one of the areas where prices have increased year after year at one of the highes rates in the Denver area. For that reason, the builders have been more reluctant to give big discounts and do much negotiating on ther new homes. It takes a qualified Buyer's Agent with experience in the field to get the best price, interest rates, and the most options and amenities included in the transaction. If you would like my help or would like to discuss this further let me know. I will be glad to help.

Robert McGuire ASR
Realtor/Consultant
Your Castle Real Estate
rmcguire@yourcastle.org
Direct: 303-669-1246
0 votes Thank Flag Link Tue Aug 31, 2010
Depend on the builder. Most builders who have made it this long aren't into seeing who can stuff it the deepest any more. I have one new home left (see it @http://holbenhomes.com). It's well priced @ $790,000 and don't bother me about it unless you come with a qualification letter in hand.
Web Reference: http://holbenhomes.com
0 votes Thank Flag Link Tue Aug 31, 2010
I recently helped a buyer buy a new build in that area that was a McStain. What model are you looking at buying? Is it a dirt start or an inventory home?

Derrek
303-470-9880
derrek.patrick@coloradohomes.com
0 votes Thank Flag Link Tue Aug 31, 2010
Hi Myoder,

Thanks for your question! Yes, the builders are motivated to deal on these homes that are currently in their inventory. The reason so many people
choose me for this type of deal is that I know how to get you the best price on a home like this. Call me and I can get you a much better price than if you negotiate with KB Homes directly.

Thanks again,

Ethan Besser
303-956-8980
Broker Associate
Keller Williams DTC
0 votes Thank Flag Link Tue Aug 31, 2010
No question they all want to sell, especially given the construction loan costs they're carrying. KB is one of the biggest national builders and have deeper pockets than others, thus less open to adjusting asking prices. A Realtor representing you is your best bet since we have knowledge and information that you may not have. Builders are not likely to lower base home prices due to precedent setting which they want to avoid. You're most likely to get breaks on extras and upgrades. Feel free to contact me for additional advice.

Tim Klein
Broker
Metro Brokers - The Realty Werks
303.973.7600
0 votes Thank Flag Link Tue Aug 31, 2010
Myoder: I have sold new homes and know the ropes. The home builders that are more likely to bargain are the ones that have "Standing Inventory". Standing Inventory are homes already built. Every area is different and if you area has standing inventory then builders will bargain with you on price.

If homes are set to be built in the future there is not much room for bargaining.

It is best if you have an agent to go into the sales office with you for the best representation. The sales office employees work directly for the builder and you need your own agent as a witness to what is said and also to compare prices. PLEASE READ THIS POST I WROTE: http://www.trulia.com/blog/jane_grant/2010/07/new_home_buyin…

I have had New Home agents give me a separate price sheet and added information on what is really available when they find out I am a an agent. If you are obtaining financing then they will usually try to get you to use their lender so be careful when they go to lock your interest rate and make certain they are in line with what is offered elsewhere! Sometimes, they try to pad the rate knowing you are using them at the builders request. So be careful before theyt lock you in at a rate!!!

~~~~
Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Tue Aug 31, 2010
I would prefer the term "motivated" as opposed to desperate.
My suggestion would be to use a Realtor you can trust, do a search on sold comps in the area, come up with a number you are comfortable with and make an offer. I have seen low offers accepted and/or countered of late; and many builders have incredible incentives in place. Coupled with the very low interest rates, I believe your timing is very good.
Best of luck.
Chuck Strauss
Keller Williams DTC
720-318-7598
CStrauss@kw.com
0 votes Thank Flag Link Tue Aug 31, 2010
I would bet that there is a little wiggle room but not a lot. Builders like to give upgrades or concessions and you could stand to do well if you know what to look for. Meet a professional agent at the house the first time you go to a new build and let the builders know you are working with a professional it costs you nothing but could save you thousands.
Web Reference: http://denverproperty.info
0 votes Thank Flag Link Tue Aug 31, 2010
Like Cory said, make sure you use a Realtor. Home builders are not regulated by the Colorado Real Estate Commission and when you walk in the door unaccompanied the deck is stacked against you.

First, you are working with employees of the builder. Then if you decide to buy, the builder uses contracts drafted by their attorneys. Additionally, many of the incentives the builder offers are tied to using their preferred lender.

I live in Staleton and deal with many of the builder here. Luckily, our builders do a really good job when it comes to customer service and not taking advantage of buyers, but there is always that chance.

Give me a call, as I would welcome the opportunity to earn your business and help guide you through the process. Are you looking at the KB paired homes or the Martha Stewarts?

Best of luck,

John Keene
303-547-7578
0 votes Thank Flag Link Tue Aug 31, 2010
You should have a Realtor. You may not get a savings or concession that the builder keeps in their "back pocket".
Check out the Base price of the home and offer somewhere around there. There may be a deal there. You have to fish it out.
Brian
0 votes Thank Flag Link Tue Aug 31, 2010
Hey

They are a little desperate but usually aren't willing to deal on price. New home builds work like this. They have a base price which is probably your $350k. Then on top of that they add everything else in. For example any upgrades you might want from the standard features they put in (ie. wood floors, tile, granite counters, cabinets, AC, type of furnace, fixtures, etc.), sometimes the have a lot premium for whatever lot you purchase, and then landscaping.

Here's the deal, the better you can upgrade the house now the easier it will be to sell in the future. So what you want to try and negotiate is a huge amount of upgrades. I've seen builders offering $50k in upgrades. Do your homework and figure out exactly what you want to do. I say landscaping is a must because most people wait and then don't have the cash afterward and then the place looks like crap when you go to sell.

Granite counters, good cabinets, upgrade to nice carpet or wood and tile floors. These are the types of things that will help you sell in the future.

Good luck,

Daniel Herron
Personal Real Estate Consultant
720-323-9178
danielherron@kw.com
Web Reference: http://www.herronshomes.com
0 votes Thank Flag Link Tue Aug 31, 2010
Hi,

The best way to buy a new home is to select a good buyers agent and take them with you. Builders that are still in business are not super flexible on price but we can sometimes get you upgrades versus price reduction. Feel free to contact me for assistance and check out my website for all my contact info and to search all the houses on the market.

Best regards,
Matt Mansfield
Mansfield and Associates LLC
303-779-7973
http://www.mansfielddenver.com
0 votes Thank Flag Link Tue Aug 31, 2010
You can bid what you want but the builder will counter if they don't accept your price. Make sure you use a Realtor, builder contracts can be tough.
Web Reference: http://www.housefitz.com
0 votes Thank Flag Link Tue Aug 31, 2010
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