<p>Time to down sizing!!!
We found a townhouse, good location, good size for us.
It’s brand new and still under construction.
Like it so much.
My broker told me, builder won’t accept any bargain for the price,
they will only give us some free on upgrade options.</p>
<p>Well, we don’t need any upgrade, we just want a better price.
Newspaper said the housing price is not on the bottom yet, possible 10% drop this year.
And, most important, we want to save some money for vacations. Upgrade is really not important for us, we like vinyl floor and carpet, we don’t need granite or marble counter top. </p>
<p>Do you have any experience about bargain with builder? Willing to share?
Thank you.</p>
<p>I’ve built 3 houses in the last 25 years - typically, you don’t ‘bargain’ in the sense that your agent writes an offer, he sends a counteroffer, etc. You basically start with a long spec sheet of what comes ‘standard’ with the house and what comes optional and what the allowances are. By swapping budgets around you can save money (as you found out). The ‘negotiation’ can be done by telling them up front what you want and they will tell you what they can do to meet your requirements, or walk if they won’t or can’t do it.</p>
<p>If the builder is ‘hungry’ he may negotiate but if he has indicated up front he is not going to, that’s not promising.</p>
<p>Keep in mind that depending on what you’re building, the cost differential can be significant between options - that is, if he has already priced in granite and you request formica, what happens to the price difference? If the price of the house is the ‘base’ price and everything is an upgrade, some of which would be free, that is not ‘saving’ you money as you get something for free, but you’re paying for it either way. </p>
<p>If the house is near completion you have a choice of letting them complete and list it, then make an offer It all depends on where you are and what the market is doing.</p>
<p>One reason that a builder might have a policy against accepting a price lower than listed price is that your low price can have future implications for the units remaining to be built, as the price you pay will become public and future buyers could use your price in negotiations, whether implicitly or explicitly.</p>
<p>This is less likely to be a consideration when one buys a previously-owned house, as each owner is selling only one house, has no particular reason to care about future home sales in the neighborhood and has a unique house to sell (because the condition and changes to existing houses will vary over time.)</p>
<p>I suppose you could try making an offer that contingent on you selling your current larger house. Sale price of that house may be your biggest variable.</p>
Agree with this! We just closed on a newly built condo unit that we bought from the builders. Our realtor said they hardly ever agree to sales before construction is finished, but because of their working relationship with our realtor they made an exception. We were also told there was no negotiation on the price – and there wasn’t. BUT, because we got in early we were able to pick paint, counters, cabinets, lights, etc. We made significant upgrades and weren’t charged extra for anything. The other units are now on the market for higher than the original price we were quoted when we were looking. The main factor is that the market is pretty hot in our new city (Cambridge, MA) and the quality built/redone places sell quickly.</p>
<p>OP, how is the market in your area? Is the 10% drop you mentioned just for your area or was that a nationwide average? Although it can’t hurt to try negotiating, if the builder has a sense that these townhouses will sell well you won’t get very far.</p>
<p>I’ll just note that in some cases the builder has a specific package of fixtures – and if you change them out you don’t save much. “Happy to change it out for you, but if you don’t like my hanging lamp, you probably won’t like my credit for it either.”</p>
<p>In my experience, especially in a townhouse or large subdivision community, the builder has done his homework and there is not much if any price negotiation going on. And by “done his homework” a large building firm knows exactly what the market is, and exactly how many units they need to sell and probably will sell in a given time period. These guys are pros and have been doing it a long time (or at this point, they are not in business).</p>
<p>Unless there is a long line of buyers behind you, or the builder has unlimited funds to wait out this nasty housing market, you can ALWAYS bargain. </p>
<p>He wants to make a certain profit, you want to pay a certain price…it is all about finding the meeting point! Good luck!</p>
<p>I would think the local market would dictate how firm the builder can be in reality. What’s the harm in giving a lower bid? All they can do is say no. If you meet the original price after that I would not imagine that any rational person would not want to then sell it to you.</p>
<p>Ilovedcollege - that’s what we are going to do. But one thing my broker told me, I’m not sure if this is 100% true or not. She said if the builder doesn’t accept our price, they will pull out the contract and cancel the whole transaction. She said we won’t have second chance for the house and the builder will not accept any of our offers in the future (even for other unit). Is this correct? I can understand builder want to keep the price and “be fair” to other customers. But why can’t we give offers for other unit in the future?</p>
<p>I’ve reread your posts a couple of times to see if I can decipher what is really going on. It sounds like this builder has made it clear to your broker that he is just not going to negotiate. Unless you are willing to offer the asking price I don’t think you should pursue it.</p>
<p>Something else will come up that is more affordable and maybe you will like it better. While you are looking you can keep you eye on these units and maybe at the point they are listed it will be for a lower price or after they have been listed for awhile the price will come down.</p>
<p>In California (nightmare housing world)—home builders in the Central Valley sold houses in 2008 for one price. You can bet they sold those same house in 2009 (and now!) for much less. Being fair to future and past buyers is kind of irrelevant in this market. All houses, new or used, sell at what the market will allow.</p>
<p>Now if you just irritate this builder for whatever reason, it is totally up to him to sell to whomever he wants. Remeber the days when the housing market was so hot you had to send a letter with your offer explaining what a sweet Leave it To Beaver family you were and that is why they should sell to you?
If you are a cash buyer you hold a lot of power these days. But the whole market in your area really dictates the outcome.
Prices continue to fall around my area…next month you may get him to cave in on the price?!</p>
<p>It is predominantly a buyer’s market, and even new home prices can be and should be negotiated. We bought our two houses new while they were still under construction. Typically, the builder would not want to negotiate/bring down the price of the first several units to be sold because it would automatically drag the price of the rest of the units down. A builder would be happy to throw in some “freebies” such as granite upgrade, cabinets upgrade, etc. that would not end up reflected in the sales data posted online. The builder will become more willing to negotiate the price at the end of the construction project, when there are only a few unsold units left. It is in the builder’s interests to close the remaining sales quickly and move on to the next project. So earlier buyers always get first dibs on better lots/units with not much room to negotiate, but later buyers could pay much less than the list price for “leftovers” with not too many options to choose from.</p>
<p>We, and D1, have a contract on a condo under construction in South Boston. It was truly an odd situation. The place was not on the market yet, but the realtor we were working with was going to get the listings (three units). So he got permission from the owner to show it. Things were turning over so fast, and D1 could see the potential, that we decided to make an offer. In the meantime, the realtor called us to let us know someone else wanted to make an offer on the 1st and 2nd floor units, but were offering lower than asking prices by more than $20,000 per unit. We came in with $9,000 under listing price and the owner accepted our offer. I guess he figured if he could make a sale that quickly, before even formally listing it, and have a precedent for setting prices for the other units, he could get more than the other buyers were wiling to offer, even if they were going to buy two units. </p>
<p>D1 got to pick out her paint colors (other construction was too far along to make any requests); realtor is only taking 4% commission (since he represented both buyer and seller), and he’s throwing in a 40" flat screen TV for daughter. The other family (and their realtor) was not very happy that the seller sold to our daughter, and implied that they would have done anything to get both units (obviously not since they came in so low). So I guess they spent another week or so looking around at other places, and came back and bought the first unit after seeing what was out there, and the prices. I’m not sure what price they agreed on. The third unit is two-story and included a parking spot, so it is going for MUCH, MUCH more money and just went on the market last week. None of the places will be move-in ready until the third week of July. </p>
<p>So yea, you can bargain, even in a competitive market, but be prepared because you could end up on either end of that deal.</p>
<p>Oh, realtor also had builder throw in crown molding throughout the place as opposed to just the living area.</p>
<p>I went to the office and site almost every weekends in May, the sales is not fast, I will say it’s a little bit slow. I found they have list four homes on Zillow and Trulia. Does that means the sales is like what I saw - slow?</p>
<p>One more question, the model home is exactly what I want, or, should I wait for the model home? Sales person said they have no idea when they will release the model home… Will model home cost extra? how much? Thanks.</p>
<p>At least in my neck of the woods… “Model home” is one of the first finished homes in the development which is reserved by the builder as a show home, most likely staged with nice furniture, plants, etc. and a landscaped yard. Typically it will be the last home to be occupied by the owners in the development, so in most cases it will be one of the last ones to sell, but in some situations it maybe the first one to be sold (on the condition that the builder continues to use it as a model until most of the units are sold). The drawback of buying the model and letting the builder use it as a model is… well, there will be lots of people snooping through the home and stomping the carpets before you get to move in. Of courese, the builder will clean up everything and touch-paint the scuff marks. Some buliders will add special touches to the model home to advertise available upgrades, some will use standard finishes. You can make an offer on one of the other units and specify in the offer that you want everything in the unit to be exactly like in the model home if you want to move in sooner than the completion of the entire development.</p>
<p>Does the relator you are working with also represent the builder? Unless you are a very savvy real estate shopper, I strongly advise getting a realtor who is not working for the builder.</p>
<p>OP - It sounds like you love the new townhouse. But if you are really wanting to bargain, you will likely have better luck shopping for an existing unit. In many areas, the tough economy means eager sellers.</p>
<p>My realtor does not represent the builder. I just gave her the number, “shock” but still willing to deal with the builder. The bottom line - same price but get as many upgrade as we can, at least make our unit more value compare with others, which maybe will help for resale in the future.</p>
It all depends on where you are and what the market is doing.</p>