Lee, Home Buyer in Jackson, MS

Considering building in newer subdivision...Need advice on offer price

Asked by Lee, Jackson, MS Sun Dec 7, 2008

Considering building a house in a newer eastern Rancho Cucamonga subdivision. Builder wants $735K for the model we like. This same model sold for over $1M over a year ago but recent sales for this same model have been between $675K to $715K. We are considering offering $700K. Is this a good price or should we wait and make an even lower offer?

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Dear Lee,

When you have a buyer's agent working for you with new home builders it is really to your advantage. Many times I have been able to negotiate a better deal or at least many upgrades whereas the average buyer would not even know to ask for. Unfortunately, new home builders want agents to bring in the buyers and register them first. Otherwise, the agent won't be able to earn a commission.

You can always ask the builder if they will come down on their price. It does not hurt to ask is my motto! If I can try to help you, feel free to contact me at the below number.

Good luck!

Joan Patterson, B.A., A.S.P., G.R.I., Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730
951-204-1864
1 vote Thank Flag Link Sun Dec 7, 2008
Dear Lee,

Lynn911 is correct. I forgot to mention in my reply that you should have your own agent that works for you. Your agent will look out for you. Also, if I don't remember wrong, there should be a clause in the purchase contract that that the price can be re-negotiated when property is completed. It is quite complicated to go over in several sentences but I think it can be done. It also depends on the contract you have.

Please feel free to let us know if you have further questions. Our office is in Rancho and our agents have great experience in dealing with new homes.

Regards,
Jonathan

*Sorry for the typo of of*
1 vote Thank Flag Link Sun Dec 7, 2008
Dear Lee, I think I know the area you are considering which helps me ascertain whether or not a negotiation as outlined in your question is a good idea or not.

When you compare the value now to the value of yesterday it sounds so encouraging!! However, please beware. Very few if any homes in the Inland Valley are selling for that amount of money now. How recent are these recent sales? Within the past month? If so, then I would offer the lower of the two if not a bit lower than that. How is the demand in that tract? Are they selling the homes quickly with a waiting list? Are they offering incentive packages?

You cannot look at the past to assess the present unless it is very recent. The higher the price of the home the more depreciation it can incur. This is a new home. Is it finished? Will it appraise for the same purchase price when you are ready for occupancy as it does now?

That price range is VERY soft. There are few buyers willing to put that kind of risk on the like in a volatile market especially during the holiday season. If you are really set on this home then I would either offer a lower purchase price than $675 and see how the builder reacts. You may be surprised. Or I would wait it out a bit longer. A home in Deer Creek just sold for less than $550,000 that is on over a half acre that once valued out at over a million also just about a year and half ago.

I certainly wish I had a crystal ball to tell you exactly what to do but all indicators are pointing towards waiting it out just a bit longer. I hate to say that in my line of work, believe me. But I can't ask you to do something that I would be wary about doing myself. The time will come for you and you will know it. If you are second guessing yourself already you are really going to have a hard time in escrow when you possibly see that pricing has indeed come down further validating your original hesitation.

Remember that this is just my off the cuff evaluation with very limited details of your situation, circumstances, motivation, etc. If I can be of any further assistance, please do not hesitate to contact me. Luxury homes are/were my specialty as I've sold hundreds of them. Good luck to you...

Diane Wheatley
(909) 981-5589
diane@moveupproperties.com
0 votes Thank Flag Link Thu Dec 11, 2008
You need to work with buyers agent who can research the entire area. Never purchase direct from a builder/ seller/ listing agent have your own real estate agent who works on your behalf.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sun Dec 7, 2008
Hi Lee,

Always make an offer at fair market value. If this is a built-to-order home, take the consideration or future market value in mind. There are several resources out there that can help you analyze the market trends. Your Realtor should be able to help you to figure out the right number.

Please let us know if you have any questions or need any assistance.

Regards,
Jonathan
0 votes Thank Flag Link Sun Dec 7, 2008
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