Home Buying in 92821>Question Details

jdubc, Home Buyer in Orange, CA

Should you negotiate builder incentives/credits before or after selecting them at the design center?

Asked by jdubc, Orange, CA Thu Mar 28, 2013


The builder is including $5000 credit to the design center (no obligation to use their lender, it's a use or lose situation). However, they want us to select options/upgrades and put down a deposit on anything we select. I've been reading that you can negotiate builder incentives but how will it work in this case if we select them first?

I did the foolish thing of not getting an agent beforehand so I'm looking for guidance and help. Appreciate it. Thanks!

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Connie Bramble 714-337-8718’s answer
It seems odd to me that you would be going to a design center before having a contract signed. All the new homes I have gone through with people, the contract is done first! So I am at a loss for information here. You could try just telling them you want to do the contract first. I do not know why they would say no. Unless there is an expiration or something on the credits and the sales person is trying to get you into the center before that happens.
Just go in and ask.
Connie Bramble
Prudential CA Realty
dre# 898302
0 votes Thank Flag Link Fri Mar 29, 2013
Thanks Connie. Well I've been told they're awaiting for their "white report" from the DRE. I'm also aware that any option/upgrades we select, we'll need to put down a non-refundable deposit. To me this seems nothing more than getting me to commit more financially so I won't back out later.
Flag Fri Mar 29, 2013
Love the question; bring a local realtor and get even more incentives. You are seeing incentives so that they don't have to post lower sale prices. See if they will pay your HOA dues for a year as well.
0 votes Thank Flag Link Wed Jan 8, 2014
This depends on the builder as they are all different.. I would get other bid for the things you are considering for an upgrade.. The prices maybe cheaper else where. Some builders have a standard granite, flooring, paint that they will do. It could be less expensive doing it on your own..
Be sure the builder doesnt add this incentive to your purchase price.. Things to ask about...
good luck
0 votes Thank Flag Link Thu Mar 28, 2013
Thanks Ingrid for the responses for my questions. If the builder does add this to the purchase price, aside from my tax base increasing what other ramifications could come out of it? I believe it will be added to the purchase price but at settlement the amount will show as being credited
Flag Fri Mar 29, 2013
Go look at them at the design center and them negotiate before you agree to the deal. You'll need a frame of reference though so if you're not familiar with construction/upgrade costs you should shop around and see how much these upgrades normally run.

What you'll probably find is that some upgrades are priced competitively while others are way out of line. That has been my experience and one of the things I've helped clients negotiate wisely. Sometimes a $5000 credit to closing costs is worth $10,000 of upgrades at their prices. If there is any room for them to negotiate you'll want to do it before you sign the contract.

On a side note, I've frequently found discrepancies between what a builder has on site for upgrades and the actual materials at the design showroom. Not better or worse, just different. For this reason alone I'd go check out the design center first.
0 votes Thank Flag Link Thu Mar 28, 2013
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