Home Buying in Elk Grove>Question Details

Jim, Home Buyer in Elk Grove, CA

We are considering placing an offer in a move-in ready new construction in Elk Grove, CA. The builder is

Asked by Jim, Elk Grove, CA Thu Aug 14, 2008

asking $549k, but the price is negotiable. A similar lot just sold during a special pricing of $529k. What do you think is a reasonable price that the builder will accept?

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If you have been working with a buyers agent all along, he or she would have a pretty good idea of the market value of the homes that you like. Generally it is a range of values. Example: 4000 sq foot new or newer home might be worth between $480K and $580K depending on location, interior and exterior upgrades etc. The question to address then is this home at $549K one of the nicest, best located, best equipped homes? Or is it prettty basic without much in the way of upgrades and incentives. - If it is a 4000 square foot home at $549K it should be nice. Although there are 4000 square foot homes in Elk Grove for less than $480K they are often short sales or repos in poor or barely fair condition.
1 vote Thank Flag Link Thu Aug 14, 2008
Thank you everyone. All excellent advise. Well, I offered 500k and they countered 529k. Disappointed, I waited a few days before responding while still searching for other homes. Finally I countered 515k and it was accepted. Kind of fortunate, I did not wait too long as all the other lots (2) of the same model are now reserved. This was totally unexpected considering the current market and price point.
0 votes Thank Flag Link Thu Aug 28, 2008
Without knowing much about the specific community, it is tough to give you specific advice. I have seen some builders underprice their inventory lately (just like banks with their REO's) to generate sales activity and demand. You certainly won't get what is not asked for. Many builders will attempt to preserve the ultimate sales price so that subsequent phases and releases of new units continue to appraise at a higher value. Negotiating more upgrades, having the builder PAY OFF Mello Roos bonds in advance, pay HOA dues for X years, pay your closing costs etc. may prove to be the path of least resistence. Hit them hard though on price, terms, contingencies, etc.

Price aside, be sure to do research into the builders reputation and do your best to find out if the developer is paying its sub-contractors before you do anything. Perhaps you heard on the news a few months back that new homeowners were stuck with liens after purchasing and closing escrow on new construction homes. The builder did not finish paying its sub-contractors, and the new owners got stuck with the bill despite having title insurance. Turns out the type of title insurance they obtained did not protect them against this. If you are working with an agent, he/she can advise you in this regard. Good luck to you.
Web Reference: http://www.erinattardi.com
0 votes Thank Flag Link Tue Aug 19, 2008
Erin Stumpf…, Real Estate Pro in Sacramento, CA
Builders will always mark a house up then show mark downs and etc entice buyers. Your buyers agent should be able work with builder associates get a good feel on right offer including taking inconsideration home sold for $529K. You need to confirm home you have interest in comps similiar to home sold for $529K . You dont want to low ball and offer hack off builder. I am sure your buyers agent will find a happy medium between you and builder. http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Thu Aug 14, 2008
Hello Jim, and congratulations on the purchase of a new home. This should be a very exciting time but can be very frustrating. I hope that you are working with an agent who has experience in new construction. Your agent should be able to give you comps in the area of homes that have sold, are pending and that are currently listed. This will give you an idea of what prices are doing. If you have not contacted an agent yet, do it. Having an agent represent your interest as a buyer are paramount. Without knowing more about this specific house or development I can not give you an opinion regarding the price.
I hope this helps. If you give me more info I could hopefully be of more assistance.

Good luck,

James Blaylock, REALTOR
Keller Williams Realty
Web Reference: http://www.jimblaylock.com
0 votes Thank Flag Link Thu Aug 14, 2008
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