During this housing down turn many potential home buyers and Realtors see an opportunity to negotiate with sellers. While being true some thing need to be clear. On a resale home if it is priced right to begin with the seller won't have much room to negotiate with a potential buyer. The seller still has fees and loans to pay off. On the new home side, things are similar. The builder has construction loans to pay off, commissions to pay and sometimes "back end participation" to the developers as well. While a couple of years ago builders could price the home $50,000 high and than give a discount, that is no longer the case. I Colorado Springs most of the national builders have gone by the wayside and this practice really doesn't work for the local builders who actually support our community. So here are a few simple suggestions.
1. Buying inventory will get you a better deal: Most builders don't want to pay the interest carry for longer than they have to. Keeping in mind the home does have a point where it just doesn't make sense to sell it. Most builders will have there inventory priced competitive with the NEW HOME market in the area not the RESALE market. So keep this in mind when considering an 'offer'
2. Builders wont negotiate on base price of a 'dirt start'. 'pre-sale' or 'to be built' depending on your terminology- in looking for a 'deal' on a home to be built your better off asking for options or a land scape package. Some builders have an incentive package already put together.
3. Before you need to know what the builder is going to give you, finding a house you love is far more important. Nothing can be a bigger turn off to an on-site sales person than a prospect walking in the door and first question is "what are your incentives" Some people buy on incentives only, I understand, but when there builder leaves town and they don't have a warranty in hind site what was more important?
4. When looking for a home and a 'deal' be at least pre-qualified if not pre approved, the builder will be much more apt to 'deal' if they know your situation is solid.
5. The dreaded 'Builders Lender'- Once again I think we can thank our national builder friends for the confusion here. Builder have a lender they work with and tie incentives to. The builder does this for one main reason, WE SPEAK THE SAME LANGUAGE. Meaning we have a long term working relationship with the company, we know what everyone needs in order to have a smooth transaction. Builders know what fees to expect when paying closing cost so nothing is a surprise in the end. ABC lender that the builder doesn't know may have weird fees, rules, appraisal issues. Trust the builders, we know what we're doing and your rate won't be ant higher, in the case at CreekStone Homes I know our lender can and will match competitors rates. on that note be careful of getting a rate quote from any one, there is no rules that say the lender can't say 4.2% but when the house is finished the rate shoots up to 6.1% just before closing. Of it sounds too good to be true it probably is. More to come on this.
6. If you have a home to sell, need to get a job in the local area, may be getting orders etc. negotiation is difficult at bets. While some builders are accepting contingent contracts bargaining power isn't as strong for the buyer.
7. One HUGE NO, NO- coming to the builders offices with out Realtor representation and asking for a discount because you don't have a Realtor. While some builders will do this, most won't. We need our Realtor community to support us and this is a sure fire way to be black listed. It also may give the builder a chance to make a little extra money god forbid.
8. When the builder says that's all, believe them, that's all. Don't get MAD if your 'offer' is countered, as I said before sometimes holding on to a home is a better decision for the builder.
9. Buying at the end of a month is a good idea- you may get a better deal so the builder cam make her monthly numbers. Sometimes this is true nut right now anytime is a good time to buy.
10. Builders are here for the same common goal as you and your Realtor- we want you to find your dream house you can raise a family in and be happy for a long time. After all isn't that the bottom line anyway?
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