Home Buying in Herndon>Question Details

Big N, Home Buyer in Chantilly, VA

What are good offers for newly constructed houses?

Asked by Big N, Chantilly, VA Fri May 23, 2008

hi,
with so much uncertainty I dont even know if i should buy a house now.........
But i have read a lot of good stuff on this website.
A lot of people have come up with good justifications to their offers, basing it on past values and, how much the buyers paid, etc;, but im wondering if with new construction, is there room to negotiate, since it never had any past values? I was looking at new townhouses, comparing them in both Herndon, and Ashburn..... are the prices they are listed for more or less firm????? Any help would be appreciated.

thanks

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Big N,

Previous answers have great info. In addition, for single family detached homes, refrain at all costs from buying into a community where there is only 1 builder. That builder has control over all the information and they have no competition within the community to keep their prices in check. Some argue that communities outside of the 1 builder community can keep the builder in check, but not nearly as good as a community where you have 3 or 4 builders competing for your business.

Lastly, be sure you absolutely have to have a new home. In the scheme of things, all other things being equal, buying a new home is a poor investment relative to buying a home that is just a few years old. Yes, in a new home, you get that new home feeling, and if you're really lucky and have money, you might get some customization, but the newness will quickly wear off, not only due to "wear", but due to the fact that you'll quickly realize that you just paid considerably more than what a similar (nearly identical) used home would cost that's only a couple of years older.

New homes have to be built at current costs for land, labor and materials.

Good luck,

Jeffrey
0 votes Thank Flag Link Fri May 23, 2008
Depends on the builder - some just drop them to rock bottom and say "here it is", while others leave cushion to negotiate. It's case by case though there's always some room to negotiate in general.

You so homes to compare them to - you can compare them to others in the neighborhood that just sold as well as similar resales that are 1 to 2 years old. There are always "comps" for new construction in an area such as Herndon or Ashburn.
Web Reference: http://www.LoudounStats.com
0 votes Thank Flag Link Fri May 23, 2008
Sometimes there's room to negotiate. The builder obviously has a "list price" for a house. And there are also "a la carte" options that can be added. Builders will sometimes negotiate on the list price itself. More often, the negotiation involves the amount of options that they'll include at little or no cost. For example, if the new home costs $600,000, the builder may not want to discount the home to $550,000. Just as with comps, it'd set a pattern that he'd have to follow with subsequent sales. But he might keep the price at $600,000, and then throw in $60,000 or so worth of options. Remember: That $5,000 fireplace doesn't really cost him $5,000, and that finished basement for $15,000 doesn't really cost him $15,000. So maybe it'll only cost him $15,000 to "give" you $60,000 worth of options.

And, as with dealing with individual sellers, it depends on the builder's degree of motivation.

But you certainly should try to negotiate. It never hurts to ask.

One other tip: Make sure you visit new construction with a Realtor. The builder's built in an expected commission if there's a Realtor involved. If not, the builder just pockets the money. And a Realtor can help you in negotiations. It's well worth it.

Hope that helps.
0 votes Thank Flag Link Fri May 23, 2008
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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Price is usually negotiable. It all depends on what it important. Lower price, help with closing costs, etc.
0 votes Thank Flag Link Fri May 23, 2008
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