How do I go about negotiating discounts on upgrades on a new home? I hope to buy a new home in Stapleton from Infinity Home Collection.

Asked by Stapletonbuyer, Denver, CO Sun Aug 25, 2013

Also, any info on this home builder. Thanks.

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Nicci Hyatt, Agent, Denver, CO
Sun Aug 25, 2013
The master developer in Stapleton has extremely strict rules by which the builders must adhere as far as "giving" any discounts. This is to maintain minimum standards of pricing and to fight against cost cutting measures a builder may use in order to make up for discounting practives. So, to add to the below - it is important to not only find an agent experienced in new home sales but SPECIFICALLY one that is experienced in Stapleton homes. Also, there are no discounts given there for NOT using an agent, so why wouldn't you? We've had clients we worked for who previously had bought new homes and working with us that were astounded at what they previously "missed" (pre-drywall inspections, electrical oversights) by working directly with the sales person for the builder instead of having their own agent. Since you can't negotiate for "not having an agent," you may as well have one!!!
1 vote
Dorene Slavi…, Agent, Torrance, CA
Wed Oct 23, 2013
You would do well to work with an experienced Buyer Representative when going into negotiations with a new home builder.
0 votes
Ron Rovtar, Agent, Boulder, CO
Tue Oct 22, 2013
Hi Stapletonbuyer:

I see from your note below that you would like an agent to guarantee a discount on upgrades. But I think you are perhaps missing the point (or two points.)

One is that builders are doing very little negotiating right now ( like none ). Why should they. They are in the driver's seat with a commodity that is in very short supply. We still are not building anywhere near enough unit and will probably barely reach pre-recession normal levels in 2014. So I would not count on getting many discounts with or without an agent.

The second is that you really don't hire an agent just to get you lower prices from a builder. You hire the agent to help guide you through the entire process with as few problems as possible. It is for example easy to spend more money than you intend, or to get yourself into a costly situation that you did not expect. (Remember the builder's sales staff includes true sales men and women. It is their job to get you to buy more than you intend. And they are master negotiators. Additionally, if you have purchased a home through an agent in the past, you probably know that agents selling existing homes always use a contract provided by the state. The state-approved contracts protect buyers in important ways. But builders use their own contracts, which are not so buyer-friendly. It is much easier to lose your earnest money when dealing with a builder, or to get into other problems you did not expect. While real estate agents are not lawyers and cannot act as if they are, they can help you figure out when you need to talk to a lawyer, an accountant, your lender, local officials (e.g. building inspectors, etc) or other professional. Agents can also help you research which builders might do the best job for you. And this is really important: an agent can help you understand how the choices you make now will affect the resale value of your home. Whether you are buying an existing home or a new one, mistakes you make now can cost you a lot of money, time and frustration when you sell. This is especially important with new homes because you are making a lot of decisions about the home before and during construction. I've seen unfortunate souls spend several years going on and off the market trying to sell a beautiful, well-built home with one flaw that could not be corrected. And, though builders are not negotiating now, they do sometimes offer incentive options to get buyers in the door. Your agent can help you use the best options in the best ways.

0 votes
Larry Brake, Agent, Aurora, CO
Wed Oct 9, 2013
Some builders will negotiate on upgrades, some will not. We're in a bit of a Seller's market these days, so negotiating discounts may be more of a challenge than it would have been two years ago. Builder upgrades can be broken into two categories: 1 - Construction Upgrades, 2 - Interior/Design Center Upgrades. In general, builders make a good portion of their profit on a new home off of construction upgrades, and most of that is made on design center upgrades. Accordingly, you may find them more open to negotiating on design center upgrades than on construction upgrades.

You may also want to consider another approach. If you have the funds available for use after closing on the purchase of your new home, you may want to have the upgrades done yourself after closing. You may find better deals by sourcing materials and labor yourself, rather than paying the builder to do the upgrades. This is often the case with flooring and countertops. You would also avoid financing those upgrades over 30 years.

I would also recommend you have a Buyer's Agent represent you in any real estate purchase transaction, including new construction. Remember, the builder's sales representative does not work for you and has no obligation to protect your interests. In fact, the opposite is true in that the builders sales representative works exclusively for the builder and likely earns less commission if they give you discounts. Accordingly, they will probably be reluctant to go to the mat for you to get a discount. A Buyer's agent has a legal and ethical duty to protect you best interests. They work for you, not the builder. And keep in mind, it costs you nothing to have a Buyer's Agent, as the Builder pays the commission to the Buyer's Agent. Lastly, make sure you have your Buyer's Agent with you the first time you visit a builder. Some builders will not allow you to introduce a Buyer's Agent into the negotiating process after the fact.

Hope that helps. Please let me know if I can answer any more questions for you. For example, another way to save money with a new builder has to do with mortgage options (whether they have an in-house lender, or whether they are willing to pay some closing costs). I'm happy to discuss that with you if you're interested. I'm not a lender, but as an experienced Realtor, I am very familiar with that process.
0 votes
Ethan Besser, Agent, Englewood, CO
Tue Oct 8, 2013
New homes are so hot right now after the financial collapse that you will be hard pressed to find any builder who will negotiate on these items.
0 votes
Bob Gordon, Agent, Boulder, CO
Mon Aug 26, 2013
A buyer's agent can bring a lot to new construction. Will it guarantee you a discount? Don't know. It doesn't cost you anything to have an agent represent you and the Builder will not discount the home because you don't have an agent. From experience though - there are tangible benefits. Realtors can assist you throughout a new construction transaction. Getting the upgrades you want, whether offered or not by the builder; protecting your investment so that you don't accidentally over improve your property; helping you avoid a punch list of issues post-closing.
0 votes
Jean Stevens, , Denver, CO
Sun Aug 25, 2013
The master developer in Stapleton does not allow pricing discounts. In the current market, there are very few builders in sought-after metro Denver neighborhoods which will allow you to negotiate on price. They don't have to - if you don't pay their price, someone else will. A Buyer's agent will be of great assistance when selecting upgrades, making certain the provisions of the contract are followed, and assisting you with any construction problems or delays. You might want to find one who understands and is versed in "green building techniques," which you will find in the Stapleton area.

Jean Stevens
0 votes
Nina Kuhl, Agent, Denver, CO
Sun Aug 25, 2013
I agree with all the recommendations on getting a Buyer's Agent to help negotiate upgrades. The agent will be your extra set of eyes during the building process, will be on site for the inspection and can recommend what upgrades make sense to get from the builder and upgrades will be cheaper to do after market. Best of all, when purchasing a new build, you will not have to pay a Buyer's Agent since it will be paid by the builder. However, you do need to start the process with the agent involved from the beginning of the process. Good luck!

Nina Kuhl
Cherry Creek Properties LLC
0 votes
Michael Turn…, , Denver, CO
Sun Aug 25, 2013
As it cannot be guaranteed you should be sceptical of any statements suggesting that it can, but with an experienced buyer agent the probability of getting a discount should be far higher
0 votes
Stapletonbuy…, Home Buyer, Denver, CO
Sun Aug 25, 2013
If I get a buyer's agent, can they guarantee getting a discount for me?
0 votes
Again, the master developer drives this issue - they won't let the builder discount under threat that no further lots will be released to them. So, what you are seeking (in a seller's market no less) in Stapleton is not a realistic goal. Get yourself a good home & fix your rate. If you are only fixating on a "deal" those are available in some other neighborhoods still ($/sf in GVRanch cannot be beat), but not in Stapleton.
Flag Sun Aug 25, 2013
Again, the master developer drives this issue - they won't let the builder discount under threat that no further lots will be released to them. So, what you are seeking (in a seller's market no less) in Stapleton is not a realistic goal. Get yourself a good home & fix your rate. If you are only fixating on a "deal" those are available in some other neighborhoods still ($/sf in GVRanch cannot be beat), but not in Stapleton.
Flag Sun Aug 25, 2013
Michael Turn…, , Denver, CO
Sun Aug 25, 2013
A big factor will be working with an agent who has experience with new home builders, contracts and process. Also, as the builder will want to keep consistent pricing you are being reasonable in asking for upgrade discounts as opposed to a discount on the actual price of the home.

Ask the prospective agent/s that you interview if they can give you a referrral for a previous client/s that they have assisted with a purchase on a new home and if that agent was able to negotiate any discounts for them.

Michael Turner
Lead Properties
720 300 0889
0 votes
John Keene, Agent, Denver, CO
Sun Aug 25, 2013
Infinity is currently the top of the line when it comes to buying in Stapleton and they have a wonderful reputation.

Unfortunately, the Conservatory Green neighborhood is in high demand and the builders aren't feeling pressured to negotiate. They are only building homes with a contract. No more spec homes they might get stuck with. So typically, they will charge you for the upgrades you close. The opportunity comes with how much of a design center credit you can negotiate.

As said many times here, you should always use your own agent as the sales person works for the builder, and why not bring in someone to advocate on your behalf?

Not so much at time of contact but during the building and closing process. I've seen builders make some pretty big mistakes and that's where your agent can step in and help you resolve them.

Give me a call if you want to discuss further.

John Keene
Perry & Co.
0 votes
Jim Hendry, Agent, CO, CO
Sun Aug 25, 2013
The use of a real estate agent who has worked with new homes sales is the starting point. The sales person for the builder works for the builder. NOT YOU. The area where you are inquiring about getting a discount is known to the builders as a profit center. Hopefully you worked them on the price of the home as they charge very high rates for not only the materials but the install of them as well. I
0 votes
Brian Smith, Agent, Centennial, CO
Sun Aug 25, 2013
This has always been a very debatable topic. There is always room to ask for things that you might want and if the builder is able to accommodate, then you can usually work out a deal. They want to sell you a home and want you to be happy. Also, negotiating price is usually unheard of. Reason being is they are trying to set a valuation on the neighborhood and fluctuations in price will upset the planning and development.

I don't know a lot about these builders, but as you can see they are developing 4 properties. I would say the price is in line, but would love to see upgrade list.

Although this might sound bias, but you should have an agent represent you. This just gives a second opinion to your decision. Most builders will pay the agent's commission.

If you would like to talk a little more detail, feel free to contact me directly.

Brian Smith
(720) 490-1687
0 votes
Martine Addi…, Agent, Englewood, CO
Sun Aug 25, 2013
Use an agent. One of my clients was in negotiation with a builder and saw he wasn't getting anywhere on items that were important to him. Asked me to help, got the upgrades he wanted and retained lender incentives even though not using lender. By the time we were done, he saved over $15k and he didn't have to pay me a dime.
0 votes
Jesus Orozco, Agent, Denver, CO
Sun Aug 25, 2013
I sold homes for Infinity for 4 years. I left Infinity in late June. Give me a call to discuss.
Jesus Orozco
Kentwood Real Estate
0 votes
Jon Roberts, Agent, Denver, CO
Sun Aug 25, 2013
Find and sign with a Buyer Agent. Their commission is already built into the price. Have them work for you vs. the sales agent at the Home Builder's sales office taking that commission or the builder keeping it.
0 votes
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