How Builders Price New Construction Homes

Real Estate Agent with REMAX at Barnegat Bay

I am the listing agent for new construction in Stafford Township, New Jersey. The development is Forest Ridge Estates and when complete will have 24 homes on two cul-de-sac streets. Unlike many builders in the area the builder has decided to price all the upgrades in the starting price. Many of the other local builders have priced the new homes with no upgrades and have a lower (can advertise lower) starting price.
What do you think is a more effective pricing strategy?  So far the reaction to this has been very interesting.

Comments (2)

Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

It becomes an easy to sell home when upgrades are FREE! A good incentive for buyers.

Sep 13, 2010 02:41 AM
Dawn Crawley
Dawn Crawley Realty - Pinehurst, NC
Find Pinehurst Homes

Every market is different.  We had a development go in pricing the homes with the upgrades included. They built about 8 spec or model homes which all sold for about 15-20% below their original price.  The prices they wanted for the location and the type of buyers we have was unrealistic. They would have been better off leaving out some of the upgrades, and increasing the size of the rooms a bit. The buyers in your market might have more purchasing power, and therefore can pay and expect the upgrades.

Sep 13, 2010 02:43 AM