The key is to remember the agent in the builders office works for the builder, not you. He is not going to tell you that you can possibly buy the exact home he's showing you for $10-70K less from an existing homeowner. Another plus is in the established section of resale homes you won't have to listen to the construction noise when your at home trying to relax.
It also depends on how long the "spec" home has been on the market and how badly they want it off the books. In my opinion, right now the best value in Steiner Ranch is 205 Horseback Hollow, as the price has been dropped several times and is now only $135.71PSF. Its been on the market for almost a year. If I can be of help please let me know.
Betina Foreman- Realtor, C.N.E.
Austin Home Girls Realty
Since you asked this question in Feb. I don't know if you have already made your purchase or if you were just testing the waters with your inquiry. The best values are most likely going to be in the existing homes in Steiner Ranch. The builders mark them up to mark them down so you feel like you got a deal. If you compare the average price per square foot of an existing home in Steiner Ranch versus a custom built one from the builder you might be surprized at the results.
Steiner Ranch homes built before 2009 CMA
Total homes for sale 47
Average 3458 square feet in the home with 4 beds, 3 baths, 3 living, 3 car garage, average year built 2004.
Average number of days on the market before selling 91.
Priced between $225K-$939K
Average Price per square foot is $138.19
Steiner Ranch Homes built after 2010 CMA
Total homes for sale 15
Average 3180 square feet in the home with, 4 beds, 3 baths, 3 living, 3 car garage, year built 2010-2011-new construction. Average number of days on the market 122.
Priced between $315K-$885K.
Average price per square foot $173.56!
The high price per square foot is $245.70.
** So when the builder knocks off a few grand you have to figure out am I really saving money or was it wildly overpriced in the first place.
Betina Foreman-Realtor, C.N.E.
Austin Home Girls Realty
A lot of good advice on this board. My experience is that you are better off purchasing a spec home vs. building one from scratch. You have a lot more leverage in that situation. When you are building it is all about what you want, and not so much about a discounted price. Builders have to protect themselves from moves in the market, and will have to more conservatively price your build then they would a spec home which is simply inventory that has to move.
Good luck to you, and if you need any assistance in financing your new home, just drop me an email.
My collegues have given you some great advice. There are so many questions I would like to know the answer to before taking a position one way or the other.
I do agree that you should interview and get an agent working for and with you-they will get all those answers and be able to give you very specific advice.
Should you have specific questions feel free to call, I would enjoy having the opportunity to help you with this endeavor.
I want to focus on the very last statement you made- "not sure how all that works". That places you at an IMMEDIATE DISADVANTAGE in the negotiations process. Its hard to play the game when you don't know how the game is played. You need representation- someone who truly knows how to deal with builders and knows new home construction.
1st let me give you one basic rule. You will not build a home as cheap as you can buy a spec home already complete or under construction. Granted you may eliminate certain options/features to better control your price but any additional promo/discount will be limited. Builders have to turn inventory. Therefore they will usually have discount incentives on those inventory homes. The real advantage to building is that it allows you to create the home the exact way you want it and in the exact location (best home site) you want it. This is at the very core of "custom" building and custom building is not usually based on huge discounts.
The key is knowing how to construct the offer in such a way as to receive the greatest value for your investment. Greatest value for your investment does not necessarily mean rock bottom price. The key is knowing how to "bundle" an offer so as to leverage greater value. To accomplish this you have to know how Builders work.
This is why I started Cornerstone New Home Solutions. Our company focuses on clients seeking to purchase new homes from builders or build custom homes from the ground up. We have over 25 years of New Home experience. Feel free to check us out at http://www.CornerstoneNewHomeSolutions.com. If you have further questions about your specific situation I will be happy to discuss those with you.
Meanwhile happy house hunting and good luck to you.
Stephen B. McClain, Broker Owner
Cornerstone New Home Solutions
Hello. There are many factors to consider when you "hear" of people getting 60k in upgrades. First make sure you are comparing apples to apples. There are many different price ranges in Steiner Ranch, so 60k could be offered on a $700k house, and 30k sounds about right for a home that is the $400k range. Also, it depends on the builder, their inventory, and the time of year. Most builders do not haggle. They may give you a few additional upgrades but to go from 30k to 60k, is unheard of for a normal transaction. I would find other ways to decrease your bottom line. There are real estate pros that will give you a large portion of their commission for them to represent you in your transaction. Have you heard of a real estate rebate? It is legal and quite rewarding. If I were you I would check into these types of companies.
Keep in mind that we are a non-traditional type of real estate company with the best buyer rebate program in town.
P.S. I love referrals! If you ever have a friend of family member, who is tech savvy looking to find a home in the 225k-800k range, and would appreciate a New Way of Buying a Home in Texas, please refer them to http://www.Buy75.com
BuyersHouseRealty is the virtual evolution of real estate, and we firmly believe in educating buyers! So much that we pay our buyers for their education! Learn more>> http://www.buy75.com/learn-and-earn/why-choose-buy75
Happy House Hunting,
"The Real Estate Deal"
Please feel free to contact me anytime.
The agent can shop you around while you go about your business. A good negotiation can take days or weeks to accomplish. Your agent won't need you again until it is time to sign the contract. A home buyer who will accept the home in builder-basic condition is an easy buyer for the builder to work with. The chance of error on the part of the builder's contractors is lower (they usually mess up on those upgrades that are non-standard). And, if there are certain upgrades that you want in the home, you can group them all together up-front and the agent can negotiate a discount off items selected at the design center.
Get out on sites like Facebook and Twitter, or work with an agent who does, and try to find someone else who is also interested in the same builder and/or subdivision you like. They don't even have to be buying in the same city. You may find a Dallas buyer who likes a certain builder in DFW that you also like who is building in Austin. Many of them are building all over the state and/or country. Don't think you can't negotiate a '2-fer'. I did it many times. Once, in Frisco, TX I saved both buyers $73,000 on their home purchases, building the same home floorplan from the same builder. And, only one of the buyers was my client. The other just happened to be in the model at the same time we were, and we worked out a deal to approach the builder as a team. The other agent really didn't understand what we were doing, but her buyers did. And, we totally rocked that deal by working together for one day!
We love working with buyers who allow us the time to do this job right. There are some very savvy agents in Austin. Call around and talk with a few. Spending one day interviewing agents by phone can end up saving you thousands of dollars, when you come across the one who is going to spend your money as if it were their own.
Many factors come into play when negotiating with builders. having an experienced agent on your side is a good idea. The representative at the builders office's job is to get the builder the highest price possible. Not matter what they say they are not trying to get you the best deal possible. Think about it, you said yourself that you've "heard" of $30K to $60K in upgrades discrepancy.
If you'd like professional representation give me a call, I'd be glad to represent you.
Call ~ Text ~ Email
Bill ~ 512-709-6343 ~ email@example.com
Feel free to give me a call or drop me an email if you would like to discuss further- I won't be available this evening (Sunday), but you can reach me anytime tomorrow (Monday) .
All My Best,
Keller Williams Realty
There is always room for negotiation, regardless of whether you build or purchase a spec home. Negotiating with the builder is no different than negotiating with anyone else as long as you have the hard data available so you know what you're negotiating for and what constitutes a good deal.
Once you have that info, determine what it is you want and present it to the builder. You're likely to get a much better deal on a completed new home than a building from scratch. Also, remember that the price the builder charges for upgrades is typically way more than what you would pay from a private contractor, so when they give you $30K in upgrades, you're really getting far less than that.
Your worst deal of all is going to be building a spec home from scratch, because the builder knows you want what they have. Your second best deal is going to be buying a spec home that is already built and on the ground, finished, without being sold. The builder doesn't want to hold the inventory. But regardless, buying a new home (building or buying a spec on the ground) is your worst investment because you're paying a premium for new. It can take 4 years or more before your above water (that is, before you can sell it and do better than losing or breaking even on your investment).
Your best bet is to buy something that is a couple of years old, still new enough to feel that way, but not so new that your paying out the nose for new.
If you still want to buy new, and you still want to build, try to find a similar floor plan that you can find a previous sale price for, and use that as a negotiating tool. Just be mindful of when the other home sold. It might have sold at the top or the bottom of the market, and you need to know that to understand how its value compares to today.
Risky all the way around without having someone represent you. However, there is no free lunch. While we like to say it doesn't cost you anything to use an agent, in reality, it does. You just don't see the cost because the builder is paying our commission. If you have access to all the MLS data, you know the market well enough over time, and you know what you are doing in the negotiating process (all probably unlikely), then you don't need an agent. Using an agent that represents your best interests 100% of the time will save you well more than the builder's commission they earn.
As others have offered, if I can be of assistance, please see my profile and decide if our company might be a good fit.
I was just showing homes in Steiner Ranch last weekend to some out of town buyers moving into the area. They ended up buying in Twin Creeks instead of Steiner Ranch. You will just about always get a better deal if you purchase an existing home over building one from scratch. There is also less room for negotiating when you are building from scratch. You may find my blog article on buying a new build home of help. It on my personal website along with my blog here at Trulia. Here is the link to the article on this website:
Building your own home does have its advantages as far as you can choose exactly what you want as far as finishings are concerned. Just know that does come at a price. When you use an experienced agent they can educate you about the market and help you in the negotiation process. Builders like to control all aspects of the process so it is always good to have somebody on your side. The builders agent represents the builder and the builder alone. Never forget that. Also you will not save money by negotiating yourself and not using a Realtor even if you are able to negotiate the same price for the home. Builders have separate marketing accounts for the Realtor's commission and if you do not use a Realtor they just keep that money so make sure you are represented by an agent who will be looking out for your best interests.
When a client of mine is wanting to buy a builder home I will still show them similar existing homes in the area. This helps them get an idea of the difference in cost and benefit of building a new home from scratch. Knowing the premium you may be paying is important because when you buy a home you are locking in your profit at the time of purchase... not just when you sell. When making an offer on a builder home I will present the comparable homes so the builder can see first hand where our offer is coming from. Many new build homes do not appear in the MLS so you need to be able to look at the surrounding comparable homes to ensure that the home you want to build is not way out of the range of available homes. Take the time to ensure you are represented. It will save you a lot of money and make the many stages of the home buying process go as smoothly as possible.
Good luck with your home buying purchase.
REALTOR | Mortgage Broker
Keller Williams Realty | 360 Lending Group
Strategies are used based on research and due diligence and industry communication.
It doesn't cost anything to hire a professional to handle negotiations for you. And, the right professional will negotiate and insure that you get a grade of a great price through this industry knowledge, opposed to a situation where you may go out in to go see a the house that wouldn't normally sell for what you're about to pay for it.
Do you have any reluctance to hiring a professional real estate agent to handle this for you can make sure you get the best deal?
Do you have any questions as to why you would hire a professional real estate agent to handle this for you?
When touring new homes with clients, It is my preference to meet with the sales agent as little as possible, as they pick up on my buyer's eagerness to buy the place. (Wouldn't it be nice if you could hire an agent to help you buy a new or used car as well?) Then place an offer for the house in writing to the sales agent without my buyer in the room. It just puts a great buffer between my client and the sales agent. And it saves my buyers thousands of dollars.
I also make sure my clients have access to what other resale homes have fetched in price. That data is indispensable in making a home purchase.
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors