Our real estate agent says that builders are not open to negotiating their price but would be open to negotiation with respect to upgrades. Is this true or is our agent pulling a fast one?
Your agent might be honest, but ignorant. Yes, you can expect there to be a 25% reduction if your agent is good. Sadly, yours isn’t. Always have your own, never use the builders agent.
May 30th, 2010 at 3:09 pm
Your agent might be honest, but ignorant. Yes, you can expect there to be a 25% reduction if your agent is good. Sadly, yours isn’t. Always have your own, never use the builders agent.
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May 30th, 2010 at 3:22 pm
In this market, everyone is open to negotiate. It’s probably your agent who wants that extra cash.
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May 30th, 2010 at 3:57 pm
That is generally true because if they sell one house at a discount, they will have to sell the remaining houses at that same price.
Some answers here are just not correct. If a builder JUST finished a development now – after the downturn – and they are pricing those houses at market price – they are not going to sell them at a 25% discount….that is ridiculous.
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May 30th, 2010 at 4:21 pm
Builders don’t like to reduce their price because it affects the appraisals of their remaining inventory. They will, however, include free upgrades and financing incentives.
When a project is close to selling out, you have a better chance of getting them to actually reduce the price of the house itself.
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May 30th, 2010 at 4:32 pm
Totally depends on the builder, the market, etc. You can often get a ‘deal’ in negotiating the cost of upgrades, but if you analyzed it carefully, your ‘deal’ may not be such a good one. In a slack market (right now in most US markets), builders may have already dropped prices, but might be willing to go further. In a sellers market, you’ll pay full price.
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May 30th, 2010 at 5:06 pm
Anyone is capable of entering a price negotiation on a property. The worst that can happen is that the builder refuses to budge on his price. However, a 25% discount (as indicated by another poster) is NOT going to happen. On a $400K house that would be a $100K price reduction. Anyone who thinks THAT is going to fly has bats in the belfry.
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May 30th, 2010 at 5:47 pm
Sure they are however
It depends a lot on when you make your offer and to whom the offer is made. First of all it doesn’t sound like you are dealing with an agent that works for you but rather an agent that works for the builder or themselves. Make sure that you get an agent that works for you all agents are not the same when you go to a building site and you are the first one on the site then the entire posture changes when you are the last one to make an offer on the last available house. The builder has to make their money remember every price is negotiable at some point in time especially in a buyers market however if you come in at a ridiculous price point it just makes the builder very uncomfortable doing business with you. Now you have to understand that the on site agent is a commission driven position so why waste your negotiating skills on someone who may not even be in business next month. So you want to negotiate from a position of strength and not insult . if they are offering you upgrades then you need to know the price value of what they are offering you If they are talking about appliances and cabinets and special bathroom features then you have to slow the deal down to the point that you are sure you are getting a good deal. In this market the builder wants to keep moving and keep building because that is what their business is based on just like a surgeon gets paid the most when he is operating. so of course they are open to negotiating anything and everything to move all the units that they have however it is sometimes easier to buy the last house rather than the first house for the best price unless none of the houses have sold and then if the builder is going belly up you are going to get a good deal from the people that are financing the project however you may never get your roads finished. Have patience and shop carefully and do your homework.
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