It all depends on the builder. Believe it or not, there are builders out there that will not negotiate their prices. Having just finished building our new home early this year, we found a builder that was giving a lot of incentives to buyers. During our search, we found some builders willing to do so, but we also found builders that just dropped their prices, refusing to give any further incentives. A couple we visited were holding out for the market to correct itself, so they would not even consider an "offer" from us unless it was full price. Many times, the incentives offered by new home builders have a major string attached...you have to use their lender to get the discounts.
It seems most builders are more willing to throw in a finished basements, free upgrades, etc, then take money off the price. They have deals with vendors and typically pay less for products because they "buy in bulk". In our case, we negotiated more in closing costs paid by the builder, a finished basemement, a deck, and more money for landscaping.
One thing we did learn is that to not listen to the agent that sits in the model who tells you "we can't do that". They do not make final decisions, the builder does. We were told numerous times that what we wanted could not be done, but when we pushed the issue and made the agent actually ask, we (and she) found that the builder would in fact fulfill our requests.
Good luck, and I hope this helps!
P.S. Don't go to a new home builder without a buyer's agent representing you. I was able to negotiate more because I knew the system and the builder agent knew I was an agent. If you don't have an agent representing you, builders typically won't bring things up that could save you money.
Coldwell Banker Burnet
Apple Valley, Mn
I hope this helps.
White Bear Lake
The rule of thumb used to be that you couldn't negotiate new construction. However, with the fall off of new construction activity, builders are much more willing to look at reduced prices. However, keep in mind that it is a business decision for them and there may be some, but certainly not as much emotion as when you are dealing with a seller who is selling their personal residence.
One key point is to make sure that you have a realtor involved asking question and running interference for you with the builder. They have already built a commission into the price for the buyer's agent and if you don't have one, they get a nice little bonus so it only makes sense to have someone working for you.
If you want to email me or give me a call and get me the address I can email you some comps in the area and help you with a history of new construction in that development that will help with you negotiations.
Timing, Financing, Representation and Business Acumen play a huge factor. In case you still have questions, do contact me. I have 11 years total experience representing both a national and local home builder. Therefore, I am knowledgeable about negotiations and pricing in new construction.
Absolutely negotiate the price. Since builders are sitting on a lot of inventory now is a great time to negotiate price and/or options. You will be amazed at some of the great deals out there for qualified buyers. Be ready with a signed contract which includes what you'd like from the builder, an earnest money check and a letter from your lender indicating you have an approval for the mortgage the contract says you will be getting to purchase the home. Once you submit your initial offer is when the negotiating begins in earnest. Good luck!
The others are right, just ask! Also, look around the development and see how many models/specs are for sale, that might tell you how negotiable the builder is. If you're looking for a pre-built, check out the Parade of Homes guide. The other agents are also correct in suggesting you use a Realtor for representation. Good luck! Lisa