Price negotiation on new construction?

Asked by Shawn, 19454 Wed Apr 8, 2009

There appears to be a multitude of new construction model homes offered at reduced prices, but most, if not all, new construction are keeping there prices for yet-to-be-built homes elevated. Some have made minor 3% price drops....not nearly enough to fill out developments and attract buyers. I have talked to several of them and most aren't willing to budge on their inflated prices despite loss of home value, the market and the reduction in prices of materials of construction.

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Edmund Choi, Agent, Paoli, PA
Thu Apr 9, 2009
New construction is easy in this market. It's all about timing and patience. If you're not in a rush, but want to claim the $8,000 tax credit, you have a few months to wear them down. By the way, get a Buyer's Agent; those sales reps are acting on behalf of the builder. Good Hunting!
Web Reference:  http://GMACproperties.com
0 votes
Judy May, Es…, , Collegeville, PA
Thu Apr 9, 2009
Hi Shawn. Negotiation is certainly an option on new construction, however it's often on upgrades and add-ons -- as opposed to the base price. I've seen new home builders offer thousands (at times tens of thousands, depending on the home, the development, etc.) in upgrades for FREE. This aspect of negotiation affords a buyer a tremendous opportunity.

I know you're just looking; however, when you're ready to actually go out and visit new home sites, I would HIGHLY recommend that you first hire a buyer's agent to represent you. In most cases, if you visit a new construction site without a Realtor the first time you're there, builders will typically NOT acknowledge that you are represented (that is, they won't pay your Realtor's commissions). And I can tell you that, in this market, you truly NEED proper representation -- whether resale or new construction.

In particular, with new construction there are contract clauses that buyers MUST be aware of (and, unfortunately, builders' reps don't always point these out). These clauses impact YOUR rights, so you do not want to go it alone.

Please be sure to interview 2-3 Realtors and ask them about their experience with new home construction as well as with real estate generally. Ask them about how they do things and how they're different from other Realtors, etc. (Before I entered real estate, for example, I practiced law, so I have experience with contracts and knowledge of negotiation strategies that most Realtors simply do not -- and cannot -- have) Then go with your "gut"....that is with someone your trust and someone you genuinely like. You'll be spending quite a bit of time with this person and, perhaps more importantly, you need to hire someone who KNOWS contracts and negotiation strategies to best represent YOU!

If you have any additional questions, feel free to call me direct on my cell at (610) 324-5240. It would be my pleasure to assist you in any way that I can.

One more thing: I've put together FREE Special Reports for Buyers & Sellers.......you can request a copy of each online at http://www.JudysFineHomes.com/meet/reports.htm.

Good luck with your home search!

Warmly,
Judy

Judy May, Esquire, REALTOR
"A Refreshingly Different Real Estate Experience"
http://www.JudysFineHomes.com
http://www.CollegevilleAreaHomes.com
judy@JudysFineHomes.com
C: 610.324.5240

CENTURY 21 Alliance
2828 Audubon Village Drive
Audubon PA 19403
O: 610.666.0202 x. 226

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http://www.CollegevilleAreaHomes.com
0 votes
Sean Dawes, , Philadelphia, PA
Thu Apr 9, 2009
Shawn,

Are you referring to homes which are not built yet on their lots? Say they have a model home and then lots which they are trying to sell and build you a home on?

If so this is because their loans they must carry in order to do construction to perm is hard for them right now. It ties up a lot of their money and equity lines during the build stages.

I was just talking to a builder yesterday with my mortgage guy because the mortgage company I do business with has this nice new program to offer builders stuck in this situation. Basically 3.5% down construction to perm loans FHA.

If you want, give me a call on my cell phone (215) 858-2266 or email me at sean.dawes@longandfoster.com and I can see which builders you are referring to and maybe talk to them for you. Ill get on the phone with my mortgage guy and we can conference call them.

Just looking to help not try and get a sale so please do not think I am trying to just get your number. I don't think we can send messages through trulia or I would.

Sean Dawes
Long and Foster Real Estate Inc.
Direct (215) 858-2266
Office (215) 409-6900 ext. 16
sean.dawes@longandfoster.com
Web Reference:  http://www.SeanDawes.com
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