Home Buying in Carmel>Question Details

Home Buyer, Home Buyer in Nashville, TN

Looking into buying a new spec home in Carmel. The builders we've spoken with don't seem to want to negotiate on price. Is that normal for?

Asked by Home Buyer, Nashville, TN Sun Aug 7, 2011

the area?

Help the community by answering this question:


Good Morning Home Buyer,

Builders are usually fine with a buyer bringing or sending in his Realtor after
having already made contact. I live in Carmel and would be happy to
represent you.

Thanks to Scott for mentioning the appraisal standpoint. Just such a problem
arose in a nearby Carmel neighborhood a couple years ago. Not only were the
recent sales affected, but the home owners were up in arms because of the
affect on their home values. Those who had to sell were forced to accept
offers below what they had paid just a year or two prior. That builder learned
his lesson and is no longer flexible on price. He offers extras or buys down
the buyers' points instead.

Have a great day, everyone.

Marita Topmiller
2 votes Thank Flag Link Tue Aug 9, 2011
From the builders standpoint if we negotiate on price in an area where we actively build we will hurt the comps and destroy future value because the appraisers will have access to the information. Example: home is listed at 300000 we sell it at 270000 next buyer comes along they buy at 300000 appraisal does not come in because of the earlier sale at 270000. Hence the deal is canceled builder sits on said home can’t pay the bills is foreclosed upon. They can’t even build that plan again for 1 year in a 2 mile radius because of the 270,000 comp. What we can do, might be a gift card for appliances, extra trim, washer & dryer ect… goodies thrown in that won’t affect the comps. There was a time when we could have an inventory reduction “sale” but with the new rules it’s like sticking a gun to our head and someone daring us to pull the trigger. Consumer protection is now a lot like communism, supposedly fair for all but not really.
Web Reference: http://www.randshomes.com
2 votes Thank Flag Link Tue Aug 9, 2011
Thanks very much for the responses, they've been very helpful. I was referring to Carmel, IN, where we are considering a relocation. We've done a considerable amount of research ourselves, but would be open to the services of a realtor-- but if we've made initial contact with a builder already, isn't it too late to throw a realtor into the mix? Thanks again!
2 votes Thank Flag Link Mon Aug 8, 2011
Hello Home Buyer,

I have run into several builders willing to negotiate very little on price. A lot
depends upon the community. For example, if a builder is ready to close out an
area, he is more willing to deal on price to move the last few homes. One builder
I know had a community that had been a strong seller, but the resale market there
took a hit in the downturn like so many others. So, he lowered the price of all of
his homes in that community to what he claimed was his bottom dollar and would
take no less. Another builder I know has lost several of his best reps because his
refusal to negotiate has lost so many deals and his reps can't make a living if they
can't sell.

However, even some price reduction averse builders are willing to add extras
instead of drop price.

Remember, the cost of building materials is steadily climbing due to the increasing cost
of materials. Lots of price pressures have come to bear on material costs, including
competition for building materials from India and China.

You need an agent who will search out all the builders in the price range in which
you want to stay. Get an agent working for you. It won't cost you any money.
Most, if not all, builders pay a buyer's agent commission out of their marketing budget.

I have a lot of family in Nashville and Franklin TN. Where is Carmel? If you were
coming to my Carmel, I would be happy to help you.

Good Luck,

Marita Topmiller
Assoc Broker
Prudential Indiana Realty Group
1 vote Thank Flag Link Sun Aug 7, 2011
Dear Home Buyer,

The simple answer to your question is no, it is not normal for a builder to hold firm on the price of a spec home. Without knowing specifics, they may have just lowered the price significantly, and a few builders do drop their prices and offer a bottom line price. If you haven't purchased your home in the Carmel area yet, there is some good news...This is the BEST TIME of the year to buy a spec home as builders do not want to carry the inventory over into winter. I know as I was a very successful new home salesperson in Indy for over 10 years. I am attaching a link to a blog I worte on buying a home from a builder which has gained national recognition. I hope it helps...and if you are still in the home buying market, I would love to help you!

Matt Borushko
0 votes Thank Flag Link Wed Nov 9, 2011
Hello , Welcome to Indianapolis.
Certain price points in Hamilton county are in high demand because of market dynamics - Since the 2008 economic meltdown, many developers and builders have been forced out of business due to tight lending (banks reluctant to lend to builders and developers). Solvent builders have been snapping up developed lots in key areas at substantial discounts. Many builders are using their own cash to put up specs, thus have a tendency to stay firm on the price. Much of this has to do to the fact that the buyers are moving down from large expensive homes into smaller footprint homes. Conversely, people moving up from apartments or their parents homes are snapping up existing inventory in the $300 k range. Also keep in mind that there is about a 18 month to two year lag time for a developer to take raw land to a platted buildable lot. There is another 18 month to 2 year time interval for the builder to turn a developed lot to a move in ready home site. Finally , with mortgage interest loans at all time lows combined with the previously mentioned criterion and you can see why new inventory is down and builders appear to be more firm on price these days.
However , there are deals to be made as everything is negotiable. Many buyers do not realize the value a Real Estate professional adds to the new home purchase. Almost 80% of new construction home purchases are made with a Realtor representing the buyer. Studies prove that buyers get more house and/or upgrades at a better price when being represented by a Realtor on a new home purchase. Many buyers are simply not aware that they can have a Realtor represent them in a new home purchase. About 30% of my business is comprised of new home purchases as opposed to existing home purchases.

Jack Gorecki
FC Tucker Company Inc.,
317 508 9815
0 votes Thank Flag Link Tue Aug 9, 2011
Unless you have signed paperwork already with the builder, it is not too late to obtain the services of a local realtor. I live in Carmel and work in the area. If I can be of any assistance to you, please contact me.

Ryan Dorman
Re/Max Legends Group
(317) 460-9889

Are you ready to move?
0 votes Thank Flag Link Tue Aug 9, 2011
Builders are willing to deal on price and more likely if you are represented by a Realtor that has brought them business before or could bring more long term. Most of their pricing models have % spread built in to cover representaiton. As with any large purchase, espaically your home, solicit the services of a professional!
We represent buyers and deal with builders all the time and we never pay full list price. If we do pay a higher price, then we are able to negotiate additional options that create enough of a discount.
Let me know if you need help!
Kevin Harrell
REMAX Ability Plus
317-517-6585 Cell #
0 votes Thank Flag Link Mon Aug 8, 2011
No problem. The country is probably about to go back into a deep recession so buying now doesn't make a lot of sense. Real Estate deals are dropping off the boards all over the place now. Once the blood is back in the water, you can buy in later for even cheaper.
0 votes Thank Flag Link Mon Aug 8, 2011
Dear Home buyer,
Choose a good agent who can negotiate some upgrades for you.
I have made deals with builders who would not come down in price but gave a $20,000.00 incentive to purchase ,,,, buyer used it in upgrades ... sometimes the builder has great financing, you can always ask them to pay for closing costs ....

Best of Luck
Helene M Moore
Windermere Prestige Properties
0 votes Thank Flag Link Mon Aug 8, 2011
As an agent who was formerly a sales consultant for an Indianapolis builder I am confident that they will do some negotiating. However, most builders do not have the number of spec homes that they used to keep available for quick move-in so are under less pressure to sell at low prices. A new build would most likely give you more negotiating room. Given my builder experience, I am very equipped to assist you in negotiating with any builder in the area. Dana Duncan, FC Tucker. Danaduncan@talktotucker.com.
0 votes Thank Flag Link Sun Aug 7, 2011
Some builders will negotiate on price, and others won't. If they're not open to negotiating on price, then try terms. If they're also unwilling to negotiate on terms, then you might want to save yourself future aggravation by moving on to the next deal.
0 votes Thank Flag Link Sun Aug 7, 2011
That is unusual, most builders are offering nice upgrades to entice buyers. You really should consider working with a Realtor who has experience working with builders and knows the area
0 votes Thank Flag Link Sun Aug 7, 2011
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