I think the problem is you ASKED if they would come down on price without writing an offer. If someone walked into my model or sales center and asked me that, the answer would be no. However if I recieved a written offer with a closing date and earnest money I'd be at the builders office seeing what I could do to put a deal together. I never start negotiating before something is in writing.
Michael Doyle Realtor
There is one additional problem. If the builder sells model "B-12" to you for a discounted price of $20,000 off the price, that will be noted by all future appraisals and will effect the builder's future sales prices in that subdivision. So if the house you are buying is already built and the last one in the subdivision, then the builder might really make a special deal.
There is sometimes no rhyme or reason for why builders do what they do... there are builders that will hold out for a pipe dream just as there are sellers that will hold out for a pipe dream. Not everyone lives in reality.
It would be worth your time to place the offer and show you mean business. Do not let your emotions get in the way... place the offer and be willing to walk away. I have seen builders come back a few days later with a different tune.
For this reason, they may offer lots of incentives as others have mentioned (pay closing costs, upgraded appliances, etc) - things that don't show up on the transaction sheet when a comp is done and will not impact the sale prices of the rest of their homes.
I also think they may have raised the price because you were with a Realtor. Builders can be weird about working with outside agents because they know agents know more than buyers in general and they have to pay commission. Again, like a car dealership, if a women comes in they THINK they can take advantage of you. The Realtor is the equivalent of the hard nose husband who isn't emotionally attached because the car is for HER and he only cares about the money. So the builder loses twice: 1) a lower negotiated price 2) paying commission.
Your realtor should show you, thru comps, what the house is actually worth. And the realtor should be able to fill you in on the builder: is this a quality builder? How much off list, if any, has he sold in the past? That will tell you if the builder comes down in price or not. Has the builder already taken a very substantial price reduction? Your realtor really needs to do some homework for you on this. And your next approach should be with a written offer.
The agents below have given you some good advice that it may be more feasible to get some updgrades than a price reduction.
Tmans comments below will not work with most builders. And unless they are financially distressed, you will end up paying more for offending them. If you use that approach all over town, you may end up with a good deal when you finally find a builder under enough financial pressure, or one that had grossly overpriced the house to begin with. But it won't necessarily be the house you want. It won't work if the house is fairly priced because builders, like buyers, are not all idiots.
You also mentioned: "lots are still being built up/empty" -- did I read "empty".? ... especially this time of the year, sales are slow and even slower because of current issues ... just like a car dealer, empty means the builder is paying floorplan on a unsold commodity and he's paying points.
One of the oldest tricks in the book is when the builder raises his price - don't ever fall for it .. right now you should be pulling the records to see what the exact comps have sold for... .. see, most people don't shop until early or late spring when the kids are getting close to getting out, so most buyers don't know if the builder raised or lowered the price ... most raise the price to show a discount and buyers fall for it.
If you just "can't live without it" .... then get with your realtor (and bring your *complete* approved letter from your lender) and start the bidding at 20% back of "asking" price ... if they're asking $400,000 then come in at $320,000 and s-l-o-w-l-y come to a figure you both agree on, probably $350ish .... sometimes good negotiations takes weeks --- $10,000 off.? it would never happen, not in this lifetime and not in this market.
Because it's in the process of being built, it is likely to be either an inventory home or a home in which the previous buyer backed out--either way, that puts the ball in in your court.
The price you were initially quoted is likely the base price of the home. Features such as upgraded light fixtures, certain types of flooring, enhanced landscaping and designer appliances are usually add-ons to the base price. In some cases, it makes sense to have the upgrades and enhancements taken care of while the home is being built rather than after you have settled in. Upgrades are negotiable as well since the builder's have access to discounts.
Be careful to stay within budget and don't forget that the property taxes are likely to go up next year. The builder's rep and your knowledgable Realtor will be able to provide more details.
Even if the builder doesn't come down in price, they can throw in some incentives such as pay your closing costs, make some upgrades (since the house is nearing completion) such as may be upgrading the appliance package, fixtures, GDO, ceiling fans, 2" blinds.... That way they still feel that they are getting asking price, but all those things will add up for you to put in afterwards.
What do you mean they went up in price? did they have a price increase since you first went in?
McBee Homes in Benbrook was the only builder that I have found was very very difficult to deal with about pricing.
Everything is not recorded here, Texas is a non-disclosure state so the only thing that gets recorded is the deed of trust which shows just the amount mortgaged not the amount paid.
It should also be said that many county employees are not the fastest or most helpful workers ever, so you may need to perservere to get at what you want. Good luck! Let us know how it goes!
Get the comps now. Information is power. If the comps tell you its over priced, you can stop trying to make a decision. You also want them now to see how things change in the next couple months.
Good luck and please award Michael best answer if you agree.
Note - I've seen builders hold tight on price until the home is built, then once it sits for a while they start to bend if nobody is buying. I've seen 2 of the *exact* same home listed by a builder - one 20K less than the other - because one was built and sitting and another isn't built yet. Same home!
Last - prepare yourself for a hardcore high pressure game of "who's gonna blink first' with the builder. Every builder I've ever dealt with are buggers. I guarantee you they say they have other buyers and other bids coming in as soon as you start the dance. If you really want the bargain ... unless you can't stand the thought of losing the house ... play tough. and hold your ground. Call their bluffs. See what happens. You can always go back and offer full price. If you blink first.
Having said all that - if the home is priced well and it's your dream home and you can afford it ... you should do the best you can with your realtor, push as hard as you're comfortable, and get the deal done.