Home Buying in Essex County>Question Details

Pandcinnyc, Home Buyer in New Jersey

Tips on negotiating new construction without a buyer's agent

Asked by Pandcinnyc, New Jersey Tue Feb 2, 2010

We're pretty far along in our search for a new construction home. We think we found our dream home and we're almost ready to start the negotiation process with the sales office/builder. Unfortunately, we visited the development a few times without a broker, and realized too-late that we should have come with a buyer's agent. Therefore we're probably going to have to go into the negotiation process alone. Any tips on negotiating new construction? Should we go for $10k-15k off the asking price, plus credit in upgrades? Any personal experience, articles, etc. would be much appreciated...thanks!!

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Tip number one....going solo places you at the mercy of individuals that do this daily and know what to say before you ask the question.

It's your business whether or not to use an a real estate professional to represent your best interests but to not do so works to the advantage of the builder in so many ways....

Did you register as not currently working with an agent? Try contacting them and telling them you are considering going with another builder because you feel you need personal representation and that since you didn't bring an agent into this relationship....you feel the need to move on and explore other options.

Good luck
1 vote Thank Flag Link Wed Feb 3, 2010
I've represented buyers in negoiating with with various different builders. What I can tell you is that every transaction has its uniques nuisances. As stated you are best in first seeing if they will allow an agent to represent you. ....Here's some basic free advice. Everything is negoiable. Sounds simple right. Well I'll make it a litle more practical. The some builders will say you have to give a certain amount of deposit upfront. The deposit can be negoiated to be given over a period of time if this is a house that is too be built. They will say you have to use their title and mortgage company to get certain incentives. You don't. This depends on the situation. That is how motivated and how much interests the community is drawing. Upgrades. Choose your upgrades carefully. Select items that makes sense to do now then later like recess lights, electrical boxes for fans in the bedrooms, roughing of bathrooms in basement. Some items it does not make sense to upgrade thru the builder. In the long run if the builder wants you as a client they will allow you to get the assistance of an experienced real estate professional. If they don't then likely they are not looking to treat you fairly.

Best Regards,

Jeremy S. Hill, Realtor Associate,
Keller Williams Realty
Office: 856.685.1651
Direct: 609.876.5817
Fax: 609.482.8235
Licensed PA, NJ
"Your Interest 1st Always"
0 votes Thank Flag Link Wed Feb 3, 2010
The best negotiating tip I could offer would be to get yourself an agent. Negotiate it with the builder to include his/her paying a buyer agents' commission and then find a good local full-time agent who has experience with new construction.
There is no rule of thumb on how much to ask off a list price. As agents, we base our offers on comparable sales. So, you'll need that information in order to base an offer. Many times builders will not even negotiate on their asking price, or they will give you an "extra" included in the price. A local agent should know what the builder does generally when selling their properties.
Good luck!
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Wed Feb 3, 2010
You should still contact a Buyer's Agent and inform them of the situation. They will contact the builder/developer and help you get them worked into the equation. You should absolutely have an agent helping you along the way. There is no magic percentage off you should ask for. What if the prices are 60% above the market value? They would be glad to give you 15% off as they are robbing you blind. A buyer's agent will be able to check comps, etc. as well as help you negotiate upgrades and help you fill out the contracts correctly so that you are covered. In this market, any builder would be happy to pay your agent a commission if it means assuring the sale. Do not trust the sales person at the development, they represent the seller no matter how nice they're being.
Web Reference: http://www.dreamtown.com
0 votes Thank Flag Link Wed Feb 3, 2010
Your first negotiating tip is to negotiate with the builder for builder compensation for a buyers broker.

Since you've done all the leg work, perhaps a Accredited Buyers Agent would represent you during this process at a reduced commission. Check out http://www.REBAC.net for a Buyers Rep in your area.

Good luck!

Laura Giannotta
0 votes Thank Flag Link Wed Feb 3, 2010
knock on the doors of those who have already bought there and ask them how flexible prices were. Market is still pretty bad so who knows how much you can get off. They may be more likely to give upgrades than reduce price. Dont forget to ask how happy new residents are with their new house and punch list completion...They may also give incentives if you use their title or mortgage contacts. Dont be afraid to walk away. Ask if they have any spec homes, often these are good deals
Broker Associate
Prudential Fox&Roach
0 votes Thank Flag Link Tue Feb 2, 2010
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