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John Berger, Home Buyer in

Bargaining tips for new home in buyers market

Asked by John Berger, Fri Aug 17, 2007

I am planning to buy a new home in North Carolina from a builder. I have chosen a lot to build a home. Now that the seller agent knows that I like the lot, what are my options in terms of bargaining for upgrades on the house.Since it is a buyers market now, I would like to know what are good bargaining tips?

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Hi,

I think you are looking for exact numbers. While someone might respond with that info, it is very hard unless the person in intimately familiar with your local area. It isn’t that the Trulia responders don’t want to be helpful, they just know that they could answer it for their backyard, but not for you being in another state.

Here are a few of the variables and a few hints:

How are the builders sales going at that project? At other projects?
If a builder needs to pick up sales, or cash flow, you can see an up tick in flexibility.

How hungry is the individual builder representative? If they need another sale under their belt, the may push harder.

How are sales in competing projects going? Is there another project in the area that might reflect a competitive threat to the project of your interest?

Find out how many units have sold there in the last 30/60/90 days and compare to a similar project.

Good Luck. Glad to hear that you have a buyer agent!
1 vote Thank Flag Link Fri Aug 17, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Are you working directly with the sellers agent? If so, what is your "agency" relationship with this person? A seller hires an agent to sell his lot/property for the highest and best. A builder hires sales agents to sell for his (her) interest, including upgrades.

If the agent is also working with the seller, at best they can be dual or non-representation. Neither of those options are an advocacy for you to bargain for the best deal. If you are working with a builder, your ability to bring in your own representation now might be challenged. You can still ask!

I am a strong advocate of buyers having their own buyers agent.

If you are on your own.....here's my tips:

Expect to make some concessions yourself (accept no as an asnwer from them).....
Work those into your give and take
Don't sign until you resolve all the issue on your plate.
Dont' put all your items on the table at one time.
Nibble your way through concessions.
If you have a partner, friend, or spouse, engage them in a good guy/bad guy conversation
Try to get the other side to speak or commit first.
Cover your important points in a power question and after delivering the question, remain silent and maintain eye contact. Don't buckle under silence. Keep quiet.
Ask questions and find out what the priorities are on the other side of the table and use those in your trade off discussions.
Evaluate all upgrade options and make your own list of the ones which are most important. Ask for a few of the lesser expensive ones and concede on those by either agreeing to pay or eliminating. Test your discussions on lesser important or lesser expensive items first to gain insight into the pattern and responses you receive.

Keep us posted!
4 votes Thank Flag Link Fri Aug 17, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Don't be concerned that you may have somehow lost negotiating leverage now that the seller's agent knows you like the lot. If you didn't like it discussions wouldn't proceed in the first place. My experience has been that builders like to stick to their prices but will negotiate upgrades within reason. Some examples of items I've negotiated on behalf of my clients are hardwood floors, additional landscaping, irrigation system, appliances, etc. I personally think upgrading your paint and builder bushes is very little bang for your buck. Think bigger.
3 votes Thank Flag Link Mon Aug 27, 2007
John,
You showed your hand and have lost some negotiating leverage. But in a buyers market, it may not hurt you too much. Just be firm in your willingness to walk away. And mean it. The bigger question here is why don't you have a buyer's agent representing your interests? A buyers agent, in almost all cases, is provided at no expense to the buyer. Also, have you done your homework on the Cary area? Are you certain that you are paying a fair price? Are you confident in your knowledge of the short and long term implications of your purchase and how the market's future (up or down) will affect this large investment? Please find REALTOR to represent you. Get referrals from friends and family to find a good one. Best of luck!
3 votes Thank Flag Link Fri Aug 17, 2007
John,

If you have not signed anything, GET A REALTOR (BUYER'S AGENT). It cost you nothing!!!! They know how to deal and will save you money. More importantly, they watch out for you. I will be more than happy to refer you if you need some names.

Also John, DON'T FALL FOR YOU HAVE TO USE THEIR MORTGAGE PEOPLE. Call me to find out how not to (but still get the discount) and for the full 411 on why not to use them. Connect through my website: http://www.mortgagesfrombill.com
2 votes Thank Flag Link Fri Sep 14, 2007
Remember seller's agent is looking out for the builders interests only! I recommend that you hire a buyers agent to represent you, (In NC this service is free to you). The buyer agent you hire, should look into all your options. They should help you pick and choose option you want and also consider when you sell it later - what options might be beneficial. Also research the area, location is very important. Call me if you have any questions in building your dream home! I have experience in building our personal homes in the past.

Nil Varinca, REALTOR, SFR, ASP
Keller Williams Realty Cary
201 Shannon Oaks Circle, Suite 101
Cary NC 27511
919 882 3292 Office | 919 272 8796 Mobile | 919 459 6867 e-Fax
http://www.NilRealty.com
NilVarinca@kw.com
Web Reference: http://www.NilRealty.com
1 vote Thank Flag Link Tue Feb 8, 2011
Since it is a Buyer's market, you have leverage. Simply ask for the up-grades you want and be firm. Bargain with the Builder directly, or if you have a Buyer's agent, have him or her do this for you. The advantage of having a Buyer's agent is that they would know the local market better and have a feel of how large the Builder's inventory is and from that can determine how receiptive the Builder will be to giving upgrades to get your business. It always comes down to supply and demand.
1 vote Thank Flag Link Tue Sep 11, 2007
I agree! I wish we could have been more specific, but hopeful you got some use from the posts. You will probably get a few more answers, and perhaps someone from NC will chime in.
1 vote Thank Flag Link Fri Aug 17, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
It is good to hear some good voices. It is not that you trust your agent or not. It is always good to get tips on what to look out for. A second opinion does not hurt.
1 vote Thank Flag Link Fri Aug 17, 2007
It sounds like you may not trust your Buyers agent if you are ask others these types of questions. As you have heard from others, these are questions that should be directed toward them. If it is truely a Buyers Market in your area, which only a local Realtor would be able to know, them you should be able to request some reducdtions. Good Luck!
Web Reference: http://www.chrisroark.com
1 vote Thank Flag Link Fri Aug 17, 2007
John,
If you have a buyers agent, you need to ask him/her these questions. As a local REALTOR, he/she is your absolute best resource. Any information you receive here will be general, and may not apply to the specific neighborhood you are considering. Call your buyers agent now.
1 vote Thank Flag Link Fri Aug 17, 2007
Thanks for the repsonses. I have a buyers agent.
As I have informed earlier, I have chosen the lot. The base house is $470000. The lot premium may be $8000-$15000. I am looking forward to add 30K in otpions with granite countertops, stainless steel appliances, bathroom downstairs, a sunroom and berber carpet . What is a good bargain in this market?
1 vote Thank Flag Link Fri Aug 17, 2007
I would suggest you hire a Buyers Agent.
1 vote Thank Flag Link Fri Aug 17, 2007
John,
I'm glad to hear that you hired a buyer's agent, and you need to get the values from that buyer's agent. These values will be very specific to the transactions that are occuring in the very neighborhood and surrounding neighborhoods where you are buying. Your agent will be able to pull information from the mls and compare what you are building to recent sales in the same neighborhood and compare finishes of those homes to what you are building. In this buyer's market, the agent will help negotiate your final price within market norms, keep him/her involved in the upgrade negotiations. I recently had a listing client who originally overpaid for their new construction home, without a buyer's agent. The builder actually charged them an additional $15,000 in upgrade fee because they wanted carpet when hardwoods were standard. That's just one of the charges that a buyer's agent would have not allowed. Engage your buyer's agent in this process.
0 votes Thank Flag Link Wed Oct 27, 2010
Get the help of a local Buyer Agent, I am a Realtor and I will be happpy to help you.

Thanks

Binny Joseph
919 636 1582
email binnyreal@yahoo.com
0 votes Thank Flag Link Tue Sep 7, 2010
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