What's the asking price?
$70,000 = $374/month (5% 30 year fixed rate)
You said "WE" found a new house.
Do "WE" have potential for increased earnings in the next two or three years?
If that's the case you may want to negotiate the asking price with a Seller-Funded 3-2-1 Buydown. Sometimes Builders are more inclined to offer incentives rather than reduce their asking price.
(It ticks off the Buyers who previously bought in the development at a higher price.)
You can plug in asking price, and calculate the savings provided with this strategy here:
Good luck with your negotiations!
Remember: If you cannot afford it...walk away.
To amplify, there are so many good buys now, and great incentives with the Tax Credit and low financing rates - both of which will soon end. So get your answer on this one so it doesn't stall you or slow you down. If it is a go, great, if not, forget it and redirect your attention within your budget parameters.
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There are great deals on homes available. Instead of focusing on a home that is outside your qualification limit look seriously at the ones that are. Being "house poor" does not leave you any cushion for emergencies or to enjoy other things you like to do.
If the home is priced at 2 Million the builder should be able to come down 70,000.00, if it is priced at 300,000.00 I doubt that they would be able to drop it like that.
Most builder get loans to be able to build homes and the drop that they would need to do at a 300,000.00 price would not normally be enough to pay off their loan.
The second thing that you will run into is what stage is the developement in. If this is the last lot or near the end of construction in the developement the builder may be more likely to drop price. If their are many lots left the builder needs to worry about future appraisal issues. If they sell a 3000 square foot home at 250,000 instead of 320,000 evry appraisal for 3000 square foot homes over the next 6 months will show that home as a comparable and the appraised value of future sales will be reduced. This could cause sales problems for the builder on newly built homes as they may not appraise for contract price.
By the way I had buyer clients sign with a builder on the last lot in subdivision Sunday night. We have been negotiating with a builder for 3 weeks. With the nuggets of knowledge that I just gave you we were able to save about 50,000.00 to come to final build priced at 310,000.00.
The key to saving the most money with a builder is to purchase one of their last lots.