Do builders negotiate on new homes?

Asked by Maniz, Colorado Sat Feb 5, 2011

My wife and I are looking at buying our first home from Richmond American in Castle Rock. Do builders negotiate on prices of new homes? If so, by how much? We saw that structural upgrades are priced separately from design upgrades and we want to negotiate on the bottom line price; their asking price is definitely too high for the size of the house.

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137
James Wehner, Agent, Scottsdale, AZ
Sun May 8, 2011
Yes, they will negotiate, especially in today's economy. There are however many factors that will determine how much they will negotiate.

Is it a spec home or are you starting from ground zero building a home? Spec homes will have more room for negotiating.

What is the demand for new homes in your area? If builders know that they have good interest in their product and have a good idea of what the average buyer will pay (which they usually do), you will have a tough time getting the home with upgrades below that amount.

Work with a good buyer's agent, NOT the agent in the sales office who represents the builder's interest.
Web Reference:  http://www.jameswehner.com
3 votes
stephen holb…, Agent, denver, CO
Mon May 2, 2011
This is kinda fun. This is my 3rd response. You're getting answer from all over the country; none of whom know Richmond Homes. I'm in Denver. I've known Richmond Homes for over 35 years. My first advice is my current advice. Yes Richmond negotiates. You negotiate to pay what they want for the house...or not. Period. Bringing a broker with you isn't going to help. It's their way or the highway.
3 votes
Stephan I would guess you know your area well and the other agents are just answering what is typical in their areas. We often help buyers negotiate great deals on building and like your Richmond Homes, some are more "friendly" than others...
Flag Sun Jul 15, 2012
Scott Hulen, , 64068
Sun Apr 24, 2011
My turn to add to the zombie post. As a new home builder we will not and cannot negotiate on price! The penalty for this will destroy the comps in the neighborhood and effectively shut down the subdivision because of the zombie appraisers. We can’t even put houses on sale. What we can do is offer incentives such as golf memberships, refrigerators, reduced price upgrades, gift cards, and special promotions on various deals to bring attention to the subdivision. This means our price model needs to be zombie dead on! Ha Ha
3 votes
Ron Rovtar, Agent, Boulder, CO
Fri Apr 22, 2011
Yes, builders do negotiate on new homes and they are generally very good at it. They may make a concession in one area, then negotiate a higher price for an improvement in another area. That is why they separate as many factors as they can, forcing you to re-negotiate every time you make a change to the house. HOWEVER, for the most part, builders are good business people. They want sell you a home (especially in this market) and they want you to be happy with the home you get. They are willing to make concessions (again, especially in this market). And, they probably will negotiate on your terms if you stick to your guns and insist on discussing the whole package.

Kind regards,
Ron Rovtar
Prudential Real Estate of the Rockies
Days: 303.981.1617
Evenings: 303.473.1926
ron@rovtar.com
http://www.rovtar.com
3 votes
This is a good explanation. Home builders aren't out to get as much money as possible, but they are in a business. There's no reason for them to concede to your budget if they can haggle it higher. It depends on the company you hire as well. http://www.virginiabuilding.com.au
Flag Wed Feb 18, 2015
Carmen Brode…, Agent, Scottsdale, AZ
Sun May 22, 2011
Yes definitely. In Scottsdale they are usually more inclined to throw in free upgrades rather than the price of the home. However anything is possible so go for it! Good luck!

Carmen Brodeur
Scottsdale Luxury Realtor / Former Attorney
2 votes
Gerard Carney, Agent, Spring Hill, FL
Sun May 22, 2011
ABSOLUTELY, either you or your Realtor can bargain and haggle a price, oh and by the way in the price of the house is the commission for buyer side agent so go get one when buying from a builder, let you agent do the talking and get you a better deal!
2 votes
Jack Welch, Agent, Santa Fe, NM
Fri May 6, 2011
Most Builders try NOT to negotiate price. Rather, they offer a buffet of "choices" that allow one to "build to preferences", instead of accepting the property "As Is". In some cases, the Builders provide "Spec" homes that are completed with finishes selected by the Builder. These types of homes are far more negotiable relative to price. If it is a "to be built" home, you will likely find some resistance negotiating the bottom line price.....but try it anyway. One never knows.
2 votes
Vinney Sawhn…, Agent, Jersey City, NJ
Sun May 1, 2011
Builders absolutely do negotiate! Never feel shy about asking for a discount off the list price despite the builder sounding firm on their prices.
2 votes
Tim Combes, Agent, Edmond, OK
Thu Apr 28, 2011
Yes, they do! If you run into a home builder that is not willing to work with you, move on to another one. As you've probably noticed through the responses to your question, just contact a local, reputable Realtor.
2 votes
Helen Davis, , Newnan, GA
Thu Apr 28, 2011
Many builders don't want to negotiate on the base price, but they will negotiate appliances, blinds, closing costs to compensate.
2 votes
Lon Welsh, , Denver, CO
Mon Apr 25, 2011
The amount (if at all) a builder will negotiate is a function of supply and demand for that particular property. If they have a glut of similar homes on the market ... they will certainly negotiate. If it's a relatively unique product or there isn't much inventory of that type in the area - why would the negotiate?

You can look up the sale price(s) of other builder homes near by in county tax records, since the MLS often does not have this information. You could also check out the price and inventory trends on our blog - see link below. You want to look at MOI (months of inventory). 6 MOI is a balanced market. More than 8 and the buyer has the upper hand. What is the MOI for the area you are considering?
Web Reference:  http://blog.yourcastle.org/
2 votes
Justin Ruzic…, Agent, Greenville, SC
Sat Apr 23, 2011
Stephen B Holben, is it that the answer will never die or that there are not enough new questions being asked that Trulia goes through thier list and says, lets put this back up? Scary, but if you pay attention, they do this with a dozen or so Q&A's...
Oh well, here is a blog to help this buyer if they are still looking:
http://blog.house-guy.com/2011/02/buying-home-of-your-dreams.html
2 votes
Gilbert Wash…, , Katy, TX
Sat Apr 23, 2011
Yes builders do negotiate on prices of new homes. Keep in mind that bigger discounts will come from inventory homes that are already built, especially if they have been on the market for a while.
2 votes
stephen holb…, Agent, denver, CO
Sat Apr 23, 2011
What is this...the Zombie post that will not die?? Based on your information, I gave you the best answer you could get almost 3 months ago. Here it is again, succinctly; Yes and no. With Richmond, they negotiate their way or the highway.
2 votes
Lytisha Shul…, Agent, Byson City, NC
Fri Apr 22, 2011
In my area they do. Most builders are ready to sell and move on so therefore, if they dont negotiate then they will be holding on to the spec home for a while. MAKE AN OFFER to see! Good luck
2 votes
Jon Terry, Agent, Golden, CO
Wed Apr 20, 2011
Yes, yes, and yes are the answers. In fact, most builders have impressive incentives that they rotate in an effort to attract buyers. Always check online to see what the incentives are at any given time. Also, do not be afraid to negotiate. I have discovered that builders often need their base price to remain at a certain level; however, they have more room to offer other things, for example, discounts on upgrades, lot premiums, etc. Make sure you’re working with a broker that has helped other buy from builders.
2 votes
Jon Roberts, Agent, Denver, CO
Sat Feb 5, 2011
Maniz,
As you can already see from the responses below, the answer is yes. Builders can and will negotiate. However, in my experience working with builders as a Buyer Agent, do not expect a huge concession on price.

And to re-emphasize some comments below: Do secure a Buyer Agent who will represent you. Builders do not use the standard Colorado Real Estate Contract and their sales contracts are much more favorable to the builder (their lawyers drafted the documents for the builder). Tthe sales agents at the builder site WORK FOR THE BUILDER... not you. It is good to have an experienced agent on your side and there is no savings to be had without one. Best of luck!
Web Reference:  http://www.jonrroberts.com
2 votes
The Stephen…, Agent, Portland, OR
Fri Oct 3, 2014
Yes they typically do. Here is a PRO TIP for you... they don't want to decrease the price because that hurts their ability to appraisal their subsequent home sales... they are much more willing (in general) to stack the home full of extra upgrades then they are to reduce the price.
1 vote
John Arendsen, Agent, Leucadia, CA
Thu Oct 2, 2014
Oops! a little late to this party judging from the date of this post. But yes builders can and do often negotiate. Everything and anything is NEGOTIABLE.
1 vote
Bev West, Agent, Greeley, CO
Thu Oct 2, 2014
Rule of thumb-everything is negotiable. Never hurts to ask.
1 vote
Michael Brow…, Agent, Allen, TX
Tue Sep 30, 2014
Builders do negotiate on new homes, however, if you are having a home built from the ground up, there is less of a chance of getting a price cut, but you may be able to get some "freebies" thrown in.

When buying a new construction home, it is highly recommended that you have a real estate professional represent you!
1 vote
Paul Alsides, Agent, Woodbury, MN
Tue May 24, 2011
Yes builders will negotiate on their homes. In my opinion, do not go into the first meeting asking for a discount. Get all the items/wants priced out to see where the final price might be. Then determine what you are willing to pay. Have your agent submit an offer to the builder. Some, will negotiate as much as 10%, yes 10%. Have your agent ask the salesperson how sales are going in that particular community. That will determine the discount percentage.
1 vote
Laura Peters, , 92605
Tue May 24, 2011
They will negotiate on small items but not to the extent of discounts and incentives of a sale of a single family residences.
1 vote
Jim McCowan, Agent, Arlington, VA
Tue May 24, 2011
If they aren't willing to negotiate, go somewhere else. As for their finishes and upgrades, they usually have such a huge mark-up on them, it's ridiculous.
1 vote
Cathy Bureau, Agent, San Antonio, TX
Tue May 24, 2011
Yes. Just keep in mind that the longer the investor has money tied up the more negotiable they will be. Good luck!

Cathy Bureau
Green Home Realty
Broker - Owner
1 vote
Gladys Viru…, Agent, Scarsdale, NY
Sun May 22, 2011
Absolutely will negotiate especially in today's market. They are eager to move inventory. Many times they will also throw in upgrades. Take advantage of it all.

Call me if I can help

914 5892455
1 vote
Ethan Besser, Agent, Englewood, CO
Fri May 20, 2011
Dear Maniz,

Yes they will sometimes negotiate. Believe it or not you often will get a better deal if you use a reltor.

Thanks,

Ethan Besser
Keller Williams DTC
303-856-8980
1 vote
Alissa Spears, Agent, Rockport, TX
Sat May 7, 2011
What a great question! I represent a builder and his development in Rockport Texas. He has never negotiated on the construction price, however he will negotiate on upgrades. I believe this is customary for most builders. It helps the overall community if they stand firm on their basic floorplan pricing and then tailor each upgrade to fit the budget of the purchaser. In doing this, the peron who just bought the same florplan for the advertised price isn't hurt when they go to sell. It also helps with the integrity of the developer and therefor you, when you are the one selling.
1 vote
Michael Doro…, Agent, Naples, FL
Fri May 6, 2011
Yes now they negociate almost everything
1 vote
Dawn Barrier, Agent, Las Vegas, NV
Fri May 6, 2011
I would say Yes, for here in Vegas, & most likely your area as well, but you should get with an agent in your area Before you go to the builder, otherwise you may limit your bargaining power.

Depending on your market, the home, its lot,features, etc will also determine what the builder is willing to do for you. Sometimes, they may have a home that is at their bottom $ price and may instead throw in extras towards upgrades or closing costs, etc.... (JMO)
Web Reference:  http://www.VegasDawn.com
1 vote
Kristin & Jo…, , Spring Park, MN
Fri May 6, 2011
Absolutely! Builders like most sellers now are very motivated, however they are typically more interested in negotiation on existing models than on build jobs since labor and material costs have not dropped as much as values. Now there may be some opportunity if the lot you choose is already owned by the builder because that may give them some room there as well!

Building can be incredibly rewarding! Just make sure you have competent representation and that you consider costs now verses adding in the future.

Good Luck and Have Fun!!
1 vote
The Meridian…, Agent, Lone Tree, CO
Fri May 6, 2011
Yes, new construction builders negotiate on the price of their homes. There are different factors that determine hoe much they will negotiate off the price of the home... the time of year, how many homes they have in inventory, the redline on a home, etc.

Make sure you select a real estate agent who specializes in new construction homes and has strong relationship with the new home builders. Simply ask how many new construction homes they have closed in the past year.

A real estate agent's strong relationship with a builder can save you money!

I hope this helps!

Tammy Petit
The Meridian Group, LLC
1 vote
David Cooper, Agent, Los Angeles, CA
Mon May 2, 2011
Than you Stephen. I know Richmond homes in Las Vegas for almost 20 years. Have had a number of negotiations with them. Price was never, ever negotiable. Plus, upgrades and financing buydowns can be much more valuable. That's why you nedd an "experienced" negotiator.

David Cooper Las Vegas Foreclosure Investor in Bank Owned REOs with Cash Flow. email or call for FREE
daily list. +1-7024997037 not a real estate agent
1 vote
Sherry McGre…, Agent, Murphy, NC
Thu Apr 28, 2011
Everything is negotiable. But, quite often you get what you ask for. Its hard to negotiate on new construction, unless you have a great contract. Quite often, when you communicate during a transaction, you are seeing one thing in your mind, and the Building is seeing another. I would suggest, getting your blue prints done, or at least a good drawing of the floor plan you want, and bid it out to several builders, with the same specifications for all of them. Try three or four, more if you feel its necessary for you to have a good market analysis of new construction in your area. Prepare, a proposal of the desired structural upgrades you want, and a separate one for the design upgrades, and then let each builder decide what his charges would be for him to build this particular home. If, they are all three within a very close range of each other.....then consider the fact that you might be asking for too much for too little.
Web Reference:  http://www.timberwoodmtn.com
1 vote
Jeff Kloenne, , Parker, CO
Thu Apr 28, 2011
Negotiate? Not officially. And usually not direct with a buyer. A good broker will be able make some things happen, BUT, you wouldn't want a developer to negotiate the price of future sales below what you paid, right?
Then, owners may walk from 'underwater' properties and the foreclosure signs will appear. Your value will drop....Your good deal will become a bad one......
So, buy from a reputable builder. See our available homes and talk to our professionals.
1 vote
Rhonda Holt, Agent, New York, NY
Sun Apr 24, 2011
Every builder has in their minds what their bottom price is going to be. Most of them do sell over the market and usually they will negotiate somewhat . But builders are not your typical seller because they have alot of cash and can wait for the right buyer to come along. They are usually looking for the top market price since they put in so much money to renovate and because this is a short term investment for them.
Web Reference:  http://www.RhondaHolt.com
1 vote
David Janis, Agent, Boulder, CO
Sun Feb 6, 2011
Hi,

Check out this article in the New York Times about a woman who lost her $20,000 deposit to a new home builder. Keep in mind that this would not have happened if you used a real estate agent to represent you. The agent will negotiate for you and protect your interests at no cost to you. By using the builders representative ther is nobody looking out for you - and the builders rep will get paid twice instead of one time.

http://www.nytimes.com/2011/02/06/business/06gret.html
1 vote
djennifer009, , Salt Lake City, UT
Mon May 4, 2015
If the contractor is honest, then they won't need to negotiate their price. If they're already charging an honest price, then asking them to change it can be offensive. If you feel like it's to high, though, you can always ask them to break down individual parts of the price. http://www.mvmch.com/home-features.html
0 votes
Allison Cass…, Agent, Westminster, CO
Fri Apr 10, 2015
receiving thousands in incentives and upgrades may be a better deal than simply getting a price decrease.
0 votes
Allison Cass…, Agent, Westminster, CO
Fri Apr 10, 2015
No, because reduced purchase price and closed deal become public record.
0 votes
Monica Rolqu…, Agent, Wilmington, NC
Fri Oct 3, 2014
It really depends on the market. In a buyer's market the builders are more apt to negotiate. However, if the home is in a development and the builder has a lot of homes to sell, then the builder may offer incentives such as closing costs, or an appliance package instead. Make sure you are using a Buyer Agent who can successfully negotiate any potential discounts or incentives for you.
0 votes
Randy Stoker, Agent, Carmichael, CA
Wed Oct 1, 2014
A home builder can negotiate on upgrades or minor custom work but not to the extent you probably desire. If they cut the price on a new home then the next new house they build and try to sell will have a lower priced / value house to compete with; a house that same builder sold! You can see the predicament.
0 votes
megrobelly, Home Buyer, Denver, CO
Sat Mar 9, 2013
Hello, I am planning to buy a house from Richmond Homes and I am a little confused about negotiating the price (upgrades ), well I had my first visit to the model homes already so with my wife already found the house we want well our budget is 300K, no more than that but with all the upgrades we want plus the finished basement it will be more than we can afford it so at what point we can negotiate, they told us that we will save some money if we work with their brokers and I don't know if that is true? Can anybody advice me about hot to do this? also can anybody tell me if I could negotiate the upgrades price in order to try to get my finished basement under my 300K budget. I will appreciate any advice, I am in aurora CO and planning to buy a home in southlands (Withman home). Thanks
0 votes
Suz A, Agent, Longmont, CO
Wed Jan 4, 2012
This is a great string of comments. My original response was buried under other comments months ago. That's OK. I come back to see other responses and many times I am impressed.

I'm betting Maniz bought his home and is enjoying "the dream." So why keep posting to a string like this? Plenty of buyers cruise these pages. It would be really sad if only agents and brokers read this material. That's not happening - is it?

I'm sticking to my guns. I know builders negotiate. There is a degree to which they negotiate and a lot depends on how much a buyer is spending and what they are spending on. They might be more willing to negotiate with buyers who order more upgrades. And, don't expect the builder to budge very much if a buyer wants to install their own floors and appliances.

Richmond builds a very good home. I would be happy to show people new and pre-owned homes in Boulder County. I live in a Richmond home. I sold them. So, I'm happy to tell my clients what I know.

Best,
SuZ
PML of Longmont, CO
720 810 0683
bouldersuz@gmail.com
0 votes
SuZ, yes, buyers are still looking at this page. It came up when I asked Google if new builders negotiate & I've gotten some good ideas.
Flag Mon Sep 30, 2013
Ethan Besser, Agent, Englewood, CO
Wed Jan 4, 2012
Deat Maniz,

Thank you for your question. You can get the best deal from a home builder with an experienced realtor like myself, by your side. It seems illogical but trust me it is the case. Also you need an agent to help you look over and explain their contracts as a good agent will look after your best interests.

Call me and I can get you a GREAT deal on this home!

Thank you,

Ethan Besser
0 votes
Tricia Avila, Agent, Mulvane, KS
Tue May 24, 2011
Not a whole lot it is easier to negotiate for more stuff like finish a third bath
0 votes
Julie Montgo…, , 80238
Tue May 24, 2011
Ten years ago, the answer would have been absolutely not. Today, everything is negotiable, especially if it's inventory they've already built. Let me give you some very good advice ... don't buy new. First, you will pay the builder's price, which isn't necessarily "true" market value. Second, when you see signs like "starting in the mid-300Ks," add another $60 for upgrades (and that doesn't buy you that much). Next, you'll put another $25K into your yard, fence, sprinkler system and landscaping. That's money you will NEVER get back. Do yourself a big favor ... hire a Realtor who knows the market and let them help you find a "nearly" new home in Castle Rock with the goodies already in place. Julie Montgomery, RE/MAX Masters, Inc,, 303-906-3150, juliemontgomery@remax.net, http://www.jmontgomery.com
Web Reference:  http://www.jmontgomery.com
0 votes
Tina Poe, , Wilkesboro, NC
Mon May 23, 2011
Everything is negotiable in this market condition.
0 votes
Ethan Besser, Agent, Englewood, CO
Mon May 23, 2011
Hi Maniz,

Thank you for giving me the Thumbs Up? I would be glad to represent you to a builder and protect your interests in the transaction. If you deal directly with the builders rep their job is to represent the builder's interest and not yours.

Call me and I can take care of this transaction for you as I have done many of them successfully before. My services to you are free and for no obligation.

Thanks,

Ethan Besser, CDPE
Certified Distressed Property Expert
Broker Associate
Keller Williams - DTC
Cell: 303.856.8980
Fax: 303.539.4809
besser@kw.com
http://www.RealEstateColoradoNow.com

The Besser Choice in Real Estate!
0 votes
Charista Bite, , United Neighborhood of Springdale, Tulsa, OK
Sun May 22, 2011
Estate agents in that neighbourhood knows best because they have dealt with so many houses in the area and they more professional no feelings involved. It is better to let them handle it and also give them your budget range so they know what they are working on.
0 votes
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