Home Buying in 85383>Question Details

Darly2004, Home Buyer in 85383

Can you negotiate the price on a new home?

Asked by Darly2004, 85383 Sat Mar 17, 2012

Hi, my husband and I are looking to buy a home in the northwest Phoenix area. We are looking at resales as well as new builds. We came across 2 new communities. They are both in mid 300-low 400k range for the base price. I have read in various places that you are more likely to negotiate for upgrades than the base price, which is fine with us. However, when I brought it up to our agent, she said that they will likely not budge on their pricing. Is that true for the current market? Any advice would be helpful.

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21
Every new home builder is different, but my philosophy is that you won't get what you don't ask for.

I have worked with and spoke with several new home builders, and the overwhelming majority say that they do not have AS much room on the asking price, but that they can and will often include allowances for window coverings, landscaping and other upgrades at the design center that add up quickly, so it is worth pushing them on it because they certainly aren't going to suggest it to you....so make sure your agent is willing to represent you well in a new home build. Several big pluses with purchasing a new home other than the obvious warranty and such is that the advances in building technology and materials cam add up to thousands of dollars in utility savings...which is a HUGE plus here in Phoenix. Good luck with your decision and hopefully you got some sound advice here in the Trulia forum!

Warm Regards,
Chris Spalding
Real Estate Agent
(602) 312-7237
2 votes Thank Flag Link Sun Apr 15, 2012
Hi Darly2004,

It is worth a shot....you have nothing to loose just by asking the question, or having your agent present the offer to them. I have worked for a few New Home builders in the Inland Empire (Riverside County, California) and Yes, sometimes it does happen as you will get it pushed thru...especially at the end of a community when they are at build out or if they have standing inventory. The builder will want to get rid of the product for sure.......Good Luck to you and I hope you get the perfect house to call home!
2 votes Thank Flag Link Thu Mar 22, 2012
Yes. I get 10% discount at Home Depot any time I want to. You know how? I just ask for it... no joke either, you just have to ask for it!
2 votes Thank Flag Link Thu Mar 22, 2012
Everything is negotiable. I had some clients move from CA to AZ and told them the same thing. They negotiated the price on the largest floorplan AND on the price of the premium lot. A lot depends on if the builder has homes sitting that are not selling fast.

Good luck.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
1 vote Thank Flag Link Sat Mar 17, 2012
You can try to negotiate the price, but a builder who is planning on continuing to build in the subdivision will not negotiate price. The reason is if you are buying a 500k property for 450k, the new appraisal and comp standard for that plan is now 450k and the builder will never see the 500k level again. We are handcuffed by the rules set forth by our government and cannot have a sale! (Thank Obama) If we want to sweeten the “deal” we basically have to “hide the money” aka upgrades from the appraiser and the lenders. Items which can be upgraded since it is much harder to determine value are flooring, electrical fixtures, upgraded paint, better insulation and better hvac equipment. We cannot lower the price, give away free sq. footage or add a garage when we do this we are having a going out of business sale in this subdivision since we cannot recreate the product for 450k and stay in business.
Picking a custom home builder is a lot like picking a realtor®; you should interview several builders before making a decision. Do not solely rely on a referral from an agent! Do the work yourself and interview several. Here’s a short check list of questions to ask:
1) Ask for current client referrals, 3 should be no problem & follow up with each regarding quality of the home and how well the builder did in regard to warranty work after the sale.
2) Ask if the builder is willing to do a cost plus contract this will save you money if the builder is ethical and doesn’t try to steal.
3) If you are obtaining financing ask about construction perm loans, these are one time closing loans and usually save the customer about 2,000 and may also have a tax benefit for you. It also allows you to see all the bills and control all the money.
4) Talk with the builders bank make sure the builder has the resources to complete the project
5) Do a basic background check on the builder look for items such as liens, bankruptcies, lawsuits different company names they are an officer in that are now insolvent and in the same industry.
6) Check with the local home builders association for a list of builders in the area
7) Energy cost are going up and the trend will continue pick an Energy Star home builder and have the home certified as an energy star home this will save you money over the long term, add quality to your home and help the resale down the road. For an energy star home expect to add 2-3% to the price of the home.
8) Ask to see a written copy of the home builders warranty program.
9) CONTRACTS- usually not a big deal and all 3 types work well the question is getting the best deal for you. The 3 types are: Realtor® provided (these protect the interest of the agents & brokers), builder provided (these protect the interest of the builder and usually provide more detail in regard to dispute resolution) home owner provided (these are drawn up by your attorney and favor you in the event a dispute arises) many times a builder will want to use their contracts, it’s usually fine just make sure your real estate attorney reviews the document before you sign.
10) Have fun!

That’s your top ten list! Good Luck!
1 vote Thank Flag Link Sat Mar 17, 2012
I say yes and no. On a home the "Builder" has to still build the changes of negotiating a price reduction are slim but getting additional upgrades is more likely. If however your looking at a SPEC home, one that has already been build then there might be some wiggle room in the price. As others have stated, the answer is always no unless you ask.

I would love to help you out in the North Valley.
0 votes Thank Flag Link Thu Mar 5, 2015
I'd love to help you. Please contact me through my Trulia profile.
0 votes Thank Flag Link Tue Jan 28, 2014
the question is old, but the situation will present itself over and over again.

can you negotiate??? yes. but depending on what others buyers are paying or if there is a lack of buyers will determine how receptive the builder will be. You might get some give and take or just a "NO."

you have to balance your attempt to get more for your money vs losing out to another buyer that will just agree to the asking price or offer more/settle for less than you.
0 votes Thank Flag Link Wed Oct 2, 2013
Yes, negotiation is essential in buying property, even new builds. As stated before, every home builder is different and can offer different deals, including base price negotiations. In addition, you can defer to your Realtor to negotiate an amount you can spend at the design center to be include in the contract, i.e. upgrades.

Regards,
Chad Roberts
Broker/Salesperson
Realty One Group
0 votes Thank Flag Link Wed Oct 2, 2013
Everything is negotiable. Yes, yes, yes!!! I have had great success with negotiations in the residential market & the new construction market.
0 votes Thank Flag Link Sat Sep 28, 2013
There is always some room, but just remember that most of these new developments are struggling right now and they are priced to sell. You can always try to negotiate and they will probably offer you upgrades or just say no. Your agent should work for YOU though if you are being reasonable about how much less you want to offer.
0 votes Thank Flag Link Thu Mar 22, 2012
Absolutely, negotiation is good when you are dealing with a motivated Seller and you are also ready to make a reasonable offer.
0 votes Thank Flag Link Sat Mar 17, 2012
You can try..
Just keep in mind that you will be wanting upgrades (granite, extra tile, electric outlets, etc.) these are all upgrades and will cost you more than the price of the home.

Trust your agent, you can try but most of these homes don't turn a profit until the upgrades with mark-up.

Good luck to you,
Brad
0 votes Thank Flag Link Sat Mar 17, 2012
You can always ask to negotiate the price. The most the builder can do is say no. Most likely, they'll offer upgrades. Best of luck!
0 votes Thank Flag Link Sat Mar 17, 2012
It is possible in most communities to get something. Sometimes that is a discount off price, often it is upgrades for free or discounted.
0 votes Thank Flag Link Sat Mar 17, 2012
Yes you can negotiate the price of a new home. Be sure you use an agent to represent you when you are purchasing from a builder. The person you talk to is normally an employee of the builder. You need someone to represent your best interests.
0 votes Thank Flag Link Sat Mar 17, 2012
Thank you for all the info. We actually don't mind negotiating on the upgrades since I am sure we'll be getting upgrades. The way our realtor said it though, it seemed like that was not even possible. I just wanted to make sure that she will be working hard to get the best deal for us since we actually found the communities ourselves and that she is well-informed in negotiating new homes. How much should I expect/hope for off the upgrades? Both communities are in earlier stages. We like one community because of the larger lot size, but the standard features are less than the other, which means more upgrades. Can we use that to negotiate for more included features? I have been prequalified and should not have an issue obtaining a loan. We also have at least 20% down. Would that play into our ability to negotiate at all or does all that not really matter?

Donald, I am quite surprised that the stats state that there is more demand than supply in 85383. We live within the 85383 zip code and although we love it, I feel like there is definitely a good supply of resales especially in Vistancia and Westwing Mountain. Unfortunately, because of the distance to my husband's work, we need to live closer to the freeway. However it does seem like the size of the home we want (4000+) and the lot we want is limited unless we want to go the custom route, which we don't really have time for.
0 votes Thank Flag Link Sat Mar 17, 2012
Darly, I can confirm Donald's report that the demand is low. I specialize and live in West Wing Mountain in the 85383 zip code and have had several listings fly off the market within a couple of days. It's a bit of a bottom up market, so it's not unusual to have properties in the 200-300K range come in with more than full price offers. Vistancia has a larger number of resale properties in their inventory than West Wing but I have several buyers looking for resale properties with specific criteria in other areas of the valley as well, including Arrowhead Lakes etc. that there just aren't properties that meet their criteria. It sounds like having a home built may be a great option for you. There are some fantastic communities up in our area that are being built by K. Hovanian, T.W. Lewis, Meritage, Pulte and several others. It's exciting to see trusses going up here again in the Northwest Valley! Congratulations and Best of luck to your family!
Flag Sun Apr 15, 2012
Most builders will not negotiate their base price. However most builders will negotiate on extras, upgrades or amenities. Having a buyer broker who is well expereinced in new construction sure does help.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sat Mar 17, 2012
It is possible to negotiate terms of a new home sale. The current market in Peoria 85383 is that there is more demand than there is supply (probably why you are looking at new homes).

You can find out more about the current market conditions in Peoria 85383 here:

(see link below)

I use to work for a new home builder and know how they operate. Each year I help 3 or 4 clients per year purchase new homes and have always negotiated something extra for them. Keep in mind three things:

1) If the builder is willing to sell for below the base price of the home this is a "red flag" that the builder maybe in trouble (bankruptcy, closing their doors, moving out of state or abandoning the neighborhood).

2) New home builders usually do not have the best financing and ask them to match your lender's fees and rates.

3) Read your new home registration form (you should have received a copy if you signed it and your agent signed it). You maybe able to have another agent represent you and negotiate on your behalf (read the form and find out if you can change agents), but be cautious. If you have signed an exclusive buyer broker agreement with your agent, then you are in a relationship and other agents / REALTORS will not want to interfere with that relationship. (This is not a solicitation).

Donald Keys has been selling NEW and RESALE homes since 1997.
0 votes Thank Flag Link Sat Mar 17, 2012
Your agent knows best here. Maybe it's best to ask for upgrades as suggested below, rather than a price decrease.
0 votes Thank Flag Link Sat Mar 17, 2012
You can try to negotiate anything. Resale homes are probably a little easier to negotiate but don't let that stop you from trying. Have your agent pull comparable sales of similar homes in the same neighborhood and then, at least for the resale homes, make a 'punch list' of all the thing you think need to be repaired or need upgrading. Present your offer along with comps and the punch list. Then, sit back and wait to see what happens.

I just put a house under contract for a buyer at $210,000. The house was originally listed for $287,000 and the asking price had just been reduced to $249,000 when we made our iniial offer of $190,000. Every time the seller countered our offer, we went over the comparables and the punch list. They finally decided to say 'yes' at $210,000.

For new homes, yes, you can negotiate for upgrades and you used to be able to also negotiate for a buy down on the mortgage, which would get you a lower interest rate for the first so many years but let the builder still technically claim a higher selling price so as not to dissuade future buyers.

Go for it! And good luck!
0 votes Thank Flag Link Sat Mar 17, 2012
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