Notices

Negotiating on a new house

Old 01-22-2020, 10:41 AM
  #1  
Admirals Club Admiral's Club Member
Thread Starter
 
Join Date: Dec 2015
Posts: 669
Received 1,030 Likes on 563 Posts
Default Negotiating on a new house

I've never bought a new house. How much can you negotiate? Regular 4 bed 4 bath spec home. Been on Zillow for 154 days. I've got some experience with pre-owned homes; and have a decent feel for the market and negotiating, but haven't ever negotiated with a builder before.
Old 01-22-2020, 10:45 AM
  #2  
Admirals Club Admiral's Club Member
 
Join Date: Mar 2010
Posts: 353
Received 16 Likes on 15 Posts
Default

Hire a great realtor. It's their job to negotiate. I've seen far too many people try to be experts in a field they are not an expert in and mess things up. If you have not walked into the project you can still hire one. Just DO NOT walk into the sales office without an agent, once the site agent gets to you, the realtor is cut out of the deal. The site agent works for the builder and will do anything to be as profitable as possible for their employer. Negotiating on new home construction depends greatly on the lot, market, sales bonus for the site agent, etc.
Old 01-22-2020, 10:47 AM
  #3  
Senior MemberCaptains Club MemberPLEDGER
 
Join Date: Jan 2005
Location: SC
Posts: 12,052
Received 8,297 Likes on 4,392 Posts
Default

Assuming other similar houses are in the same neighborhood, I would start with the register of deeds and see what similar homes sold for.
Old 01-22-2020, 10:48 AM
  #4  
Admirals Club Admiral's Club Member
 
Join Date: Aug 2016
Location: Maryland
Posts: 725
Likes: 0
Received 373 Likes on 224 Posts
Default

Originally Posted by Kenny Powers View Post
I've never bought a new house. How much can you negotiate? Regular 4 bed 4 bath spec home. Been on Zillow for 154 days. I've got some experience with pre-owned homes; and have a decent feel for the market and negotiating, but haven't ever negotiated with a builder before.
Offer them what you want to pay or maybe a little less. Builders will negotiate just like normal sellers. You can get a realtor but there's 3% that the builder will give the realtor versus you. Post the listing.
Old 01-22-2020, 10:50 AM
  #5  
Senior Member
 
Join Date: Feb 2012
Location: Middle Sound NC
Posts: 1,488
Received 562 Likes on 334 Posts
Default

Depends on the builder. the timing, and your ability to close.

I have some in my area that LOVE to negotiate, and some that will not entertain an "offer", full price or walk.

Give us some more details. Is it in a large community or is it s one off build (Spec) in an area with other styles of homes? Onsite agent, or just listed through a normal brokerage house?

Pricing? Comps in the area? Is it being used as a showcase home or model?
Old 01-22-2020, 10:50 AM
  #6  
Junior Member
 
Join Date: Dec 2019
Posts: 10
Likes: 0
Received 2 Likes on 1 Post
Default

I usually start by offering 50% of asking price whether it is a house, car, or boat, so we can split the difference at 75%.
Old 01-22-2020, 10:51 AM
  #7  
Senior Member
 
Join Date: May 2006
Location: Fort Pierce,FL
Posts: 5,687
Received 1,024 Likes on 666 Posts
Default

It really helps to have a good realtor, but they are hard to find. A good realtor would have already sent you a list of 8 to 10 comparative sales that took place in that area in the last year. The comps would include all the math so they accurately reflected the value of this property. You dont want to offer too low without a good reason as it could piss off seller. A good reason might be all cash, settlement without inspections in ten days. When you make that kind of offer everyone expects you will get a substantial deal.
If you need a loan then settlement isnt even guaranteed to ever happen. Plus the bank will require inspections and then the seller will get nickled and dimed for all kind of repairs. You see the difference?
Either way a substantial cash deposit always shows you are a serious buyer. As a seller I never take a buyer seriously who only puts $1000 down. When they put 10k down they now have my attention.
You like many on THT dont have your location in your signature or you might get some realtor recommendations in your area.

Last edited by barrell; 01-22-2020 at 11:06 AM.
Old 01-22-2020, 10:56 AM
  #8  
Senior Member
 
Join Date: Jun 2018
Location: Southeast Connecticut
Posts: 398
Received 1,283 Likes on 679 Posts
Default

Comps are a place to start...but on new builds...it's harder to comp them.

What works in your favor...it's been sitting on the market for half a year. Not sure of the size of the pockets of the developer/builder...but a lot of them don't like tying up that much money for long, the smaller ones like to sell so they can start the next project. Larger ones with deeper pockets have the bank to let a home or three sit while they build others. But..ya never know til you start the process.

Also many of them leave plenty of room to be chewed down/negotiated down...others tend to stand firm. But again....it's been on the market for 1/2 a year..that's in your favorite, they want to extract the cash from this and move on.

Old 01-22-2020, 10:58 AM
  #9  
Admirals Club Admiral's Club Member
 
Join Date: Aug 2016
Location: Maryland
Posts: 725
Likes: 0
Received 373 Likes on 224 Posts
Default

I'll add, you need to consider what's in your offer. Like if you have a house to sell, I wouldn't bother.
Old 01-22-2020, 10:58 AM
  #10  
Admirals Club Admiral's Club Member
Thread Starter
 
Join Date: Dec 2015
Posts: 669
Received 1,030 Likes on 563 Posts
Default

Originally Posted by t84a View Post
Offer them what you want to pay or maybe a little less. Builders will negotiate just like normal sellers. You can get a realtor but there's 3% that the builder will give the realtor versus you. Post the listing.
This was my thinking. Buying without a realtor worked well for me on my current house. They had a full price offer, but took mine for less due to this.
Old 01-22-2020, 11:00 AM
  #11  
HTJ
Admirals Club Admiral's Club Member
 
Join Date: Jun 2013
Location: Baytown, TX
Posts: 11,033
Received 3,108 Likes on 1,917 Posts
Default

Originally Posted by karlk1125 View Post
Hire a great realtor. It's their job to negotiate.
This, puts the advantage heavily in your court and a licensed RE agent has fiduciary duty to a client (you), the builder rep does not but oh how they can write benign looking contracts that come to sting later.

Is certainly some regional influence/effect but negotiating on a new construction home here (Texas) is more about getting amenities/upgrades tossed in, they will move a lot easier on that than the price. And it's still largely a sellers market everywhere.

Get prequalified and obtain your own financing before hand, either with a mortgage broker or your own bank/credit union - do not even sniff any financing packages the builder offers - no one told those guys it's not 2007 anymore and they're still in full on predatory mode. Happy shopping and good luck
Old 01-22-2020, 11:04 AM
  #12  
Admirals Club Admiral's Club Member
 
Join Date: May 2008
Location: Philadelphia
Posts: 5,188
Likes: 0
Received 1,260 Likes on 686 Posts
Default

Is this a one off or part of a Development. Most builders will deal a little on the first or last house of a project.
Old 01-22-2020, 11:06 AM
  #13  
Senior Member
 
Join Date: Feb 2012
Location: Middle Sound NC
Posts: 1,488
Received 562 Likes on 334 Posts
Default

Originally Posted by Kenny Powers View Post
This was my thinking. Buying without a realtor worked well for me on my current house. They had a full price offer, but took mine for less due to this.
Again, need more info before we can talk about this part of it. Some builders won't negotiate a dime with or without a broker, some will help you more since they aren't paying a buyers agent, and some won't.

Old 01-22-2020, 11:08 AM
  #14  
Senior MemberCaptains Club Member
 
Join Date: Jun 2007
Location: Winterville & MHC, NC
Posts: 4,836
Received 483 Likes on 255 Posts
Default

Around here.....Zero. You may get some upgrades but thats the extent. The house being on the market that long though may get you a few grand but the whole BS of settling at 75% is likely never going to happen. Depending on the market, I doubt the profit is more than a few points.
Old 01-22-2020, 11:10 AM
  #15  
Admirals Club Admiral's Club Member
 
Join Date: Nov 2012
Location: Charleston, SC
Posts: 8,660
Received 1,203 Likes on 714 Posts
Default

Days on market is king here. No clue on your area but that's a long time. I'd also check price history, usually can be found on zillow.

What percentage of hood is built out? What phase of dvelopment Is It in? How long are other new places on market?

Without these answers its kind of a "how long is the string" question. Post link to home for better answers.

if you aren't using a realtor make SURE To specify inthe contract as much. Something to the effect of "no commission to be paid for buyer agent, purchaser chooses to negotiate and act on his own behalf without realtor representation. Purchase price reflects 3% reduction based on these facts".
Old 01-22-2020, 11:11 AM
  #16  
Senior Member
 
Join Date: Feb 2012
Location: Cary, NC
Posts: 670
Received 154 Likes on 86 Posts
Default

Last thing I would do is hire a realtor. That's just me. I never had a problem having a conversation about what I was willing to pay versus what they are trying to charge. I agree with you on the point that not having one saves you a solid 2% off the bat.
Old 01-22-2020, 11:14 AM
  #17  
Senior Member
 
Join Date: Feb 2012
Location: Middle Sound NC
Posts: 1,488
Received 562 Likes on 334 Posts
Default

Originally Posted by Double tyme View Post
Days on market is king here. No clue on your area but that's a long time. I'd also check price history, usually can be found on zillow.

What percentage of hood is built out? What phase of dvelopment Is It in? How long are other new places on market?

Without these answers its kind of a "how long is the string" question. Post link to home for better answers.

if you aren't using a realtor make SURE To specify inthe contract as much. Something to the effect of "no commission to be paid for buyer agent, purchaser chooses to negotiate and act on his own behalf without realtor representation. Purchase price reflects 3% reduction based on these facts".
Again, depends on the builder if he will do something like that. GC guys who build a few a year....yea they may do that. Guys who build 10's or 100's per year won't....or at least shouldn't. It's cutting off your nose to spite your face....long term.
Old 01-22-2020, 11:22 AM
  #18  
HTJ
Admirals Club Admiral's Club Member
 
Join Date: Jun 2013
Location: Baytown, TX
Posts: 11,033
Received 3,108 Likes on 1,917 Posts
Default

Originally Posted by thefuzz View Post
Again, depends on the builder if he will do something like that. GC guys who build a few a year....yea they may do that. Guys who build 10's or 100's per year won't....or at least shouldn't. It's cutting off your nose to spite your face....long term.
For most people walking starry eyed into a builders office without representation is akin to a 20 year old hitting the local Chevy dealer with a check stub in their pocket - you will be accommodated and it won't even hurt...at first.
Old 01-22-2020, 11:24 AM
  #19  
Senior Member
 
Join Date: Nov 2013
Posts: 376
Likes: 0
Received 54 Likes on 44 Posts
Default

I send a friend in and offer a low price which may give me the sellers lowest price. If that works I go a little lower and try to make a deal or maybe get extra appliances.
If a realtor brought the house to me then I would use them and if not I don’t bring in anyone else that may keep the price higher.
That being said I am familiar with the process.
Old 01-22-2020, 11:31 AM
  #20  
Admirals Club Admiral's Club Member
 
Join Date: Aug 2013
Location: Sienna Plantation, TX.
Posts: 2,912
Received 1,524 Likes on 719 Posts
Default

Brand new construction? Probably not much to deal on. At least around here. Most new neighborhoods sell out in phase 1.

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.