Is the Builder Negotiable on a Franklin TN New Construction Home?

By
Real Estate Broker/Owner with Franklin Homes Realty LLC

Is the Builder Negotiable on a Franklin TN New Construction Home?Today, I sat down with a couple who is looking to purchase a Franklin TN new construction home. We did what so many of these builders do--we sat down and outlined all the things my clients want in their new home.

When we were finished, the couple was in sticker shock. As is so often the case, the prices on upgrades were outrageous. 

My clients and I stepped outside to talk. They felt strongly that our first offer should be to ask for everything they outlined. We talked about the recent comparables in the neighborhood and what we thought was a reasonable offer.

My clients left and asked that I begin the negotiating process.

Many buyers don't realize they can make an offer on new construction just as they would on any existing home. Some builders are more open to this than others. Having worked with this builder before, I knew he would be willing to negotiate. 

When I told the on-site agent what my clients had decided to offer on this home. She said, "I can't take that offer to the builder." I asked, "Why not?". After all, Tennessee law requires agents present all offers to sellers, no matter how low they are.

She knew I had her and she didn't like it. You could see that she was very unhappy that she was required to write up an offer that she didn't believe would be accepted. I would have been happy to write the offer. However, the builder has his own contract that the on-site agent must complete. That's their choice, not mine.

Had these buyers gone in without representation, the on-site agent would have told them that the offer was unacceptable and convinced them to come up in price. She knew that wasn't going to happen with me because I know the law. 

The on-site agent agreed to write up the offer tomorrow and call us when it was ready for signatures. We'll then go in, review the offer to make sure it includes all we requested and my clients will sign. The offer will be submitted to the builder's main office. 

The rest of the negotiations will be between the builder's main office and myself. In the meantime, I have instructed my buyers not to go anywhere near the model home or to talk with the on-site agent. All communication must come through me or risk showing our hand.

Fortunately, these buyers have options should this negotiation not go the way they hope. The best thing buyers can do is hire a buyer's agent to represent them through the process. Even if, the home is Franklin TN new construction.

Is the builder negotiable on a Franklin TN new construction home? You won't know until you try.

Posted by
Tammie White, Managing Broker/Owner
CLHMS, CRS, GRI, SFR
Franklin Homes Realty LLC
Franklin, TN
(615) 495-0752 
GET REAL. GET LOCAL.
 
This posting with the content written here and photographs displayed are the intellectual property and opinions of Tammie White of Franklin Homes Realty LLC. Any party who uses this material without the written permission of Tammie White is subject to copyright infringement and possible lawsuit.

Comments (26)

Jenna Dixon
Momentum Real Estate Group LLC - Marietta, GA
55 & Over | New Constructions | Horse Farms

I find the same to be true here in the Atlanta new construction market.  Buyers need to understand that unless they specifically hire a buyer's agent, NO ONE is representing them in the transaction.  That sweet girl/lady or charming gentleman in the model home is there to write contracts ON BEHALF OF THE BUILDER.

Sep 27, 2014 03:07 AM
Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!

Tammie,  Some new home consultants are very prickly when it comes to lower than full price offers, but I have been amazed at what the main office has accepted.  Good for you.  I'm glad you got that sales rep off their butt and writing an offer.

Sep 27, 2014 03:48 AM
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Joe - Now all we have to do is get the word out to buyers.

Barbara - We didn't make an offer lower than the base price. We added features and then made an offer.

Chris - I'm with you on that. Builders are hoping we'll put their listing in front of buyers but the incentive should be theirs.

Jared - Some significantly.

Joy - If only they would recognize we are there to help.

Debb - And possibly a huge cost savings.

Jenna - They are really nice until we start writing the offer and begin negotiations.

Belinda - Many couples make the mistake of pricing everything out and then subtracting things to get to their desired price. It's better to add everything you want in and then offer a lower price.

Sep 27, 2014 06:00 AM
Mike Cooper, Broker VA,WV, MD
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Tammie, as a Realtor I see this, but as a contractor I know buyers do get sticker shock because of the prices of things today. New construction is expensive, and upgrades are like buying dessert in a restaurant, it's an easy place to add in profit. 

Sep 27, 2014 10:49 AM
Janis Borgueta
Key Properties of the Hudson Valley - Newburgh, NY
LIC RE Salesperson

Some builders negotiate and some don't. It all depends on the timing and just how far off in numbers they are. Of course it depends on how sales are going as well. Yes, a buyer and their agent can and should ask. 

Sep 27, 2014 11:59 AM
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

Tammie, good for you, so many times the builders get away with murder.

Sep 27, 2014 12:55 PM
Aaron Poling
Long & Foster - Martinsburg, WV
Working to get YOU the BEST Deal!

I previously worked as a new home salesperson and ran into this scenario all the time. I was told not to write offers outside a certain guideline. Typically no offers below base price.

Sep 27, 2014 01:59 PM
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Mike - You should have seen the price tag on the desserts, I mean upgrades of this builder. Unbelievable.

Janis - Agreed. I call the ones who don't ala carte builders.

Sybil - I think my clients will walk before they let that happen.

Aaron - This offer was above base but the law states that all offers must be submitted to the builder/seller.

Sep 27, 2014 02:15 PM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Tammie White many buyers still believe strongly that they can get a better bargain from the builders rep directly! 

Sep 27, 2014 02:39 PM
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Praful - If I pull this deal off, I'll have some pretty hefty bragging rights.

Sep 27, 2014 03:15 PM
Sharon Kowitz
CRS-SRES-ABR-GRI-E-Pro-CREN ~ COMPASS RE - Cary, NC
Cary, NC Relocation Specialist ~ Buying or Selling

Love this and yes, that on site should just written it up. It's an offer, and most likely you will get some of the items included in order to make a sale and protect the value of the community. Good Luck!

Sep 27, 2014 11:18 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

They are all ears and if you handle it right (the secret), anything is possible. BTW, you may not want a price reduction. There are other goodies scattered about

Sep 27, 2014 11:53 PM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Tammie, so many buyers make the mistake of going directly to the agent in the new construction sales office and/or going directly to the listing agent.  BIG MISTAKE in my opinion. The agent in the sales office works for the builder and the listing agent works for the seller.  Good luck thinking anyone will get a better deal on that formula.

Sep 28, 2014 01:40 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Oh my!  And if the buyer went to talk to the on-site agent . . . and without a SIGNED DISCLOSURE by all parties accepting the dual agency . . . having the on-site agent suggest to the buyer that the builder "Will not take that" they have just practiced UNDISCLOSED dual agency, since they are -- in fact -- negotiating with the buyer.  

Sep 28, 2014 08:33 AM
IRMA Beltran
Century 21 M & M and Associates-Turlock homes Real Estate - Turlock, CA
Your Real Estate Agent 4 Life Always there 4 You!

Great Blog post, we just have to educate buyers on the need of their agent no matter what the scenerio. 

Have a Wonderful Blessed Day!!!!

Sep 29, 2014 04:05 AM
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

 Good on you for negotiating and trying to get the best value for your client.  I'm sure they are thankful, knowing what might have happened had you not been there.

Sep 30, 2014 06:47 AM
Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

Need a Franklin, TN Real Estate Agent? Contact Tammie White immediately at (615) 371-1544.

Oct 03, 2014 03:21 AM
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

I have found most builders negotiate. You never know unless you ask!

Oct 11, 2014 04:21 AM
Jill Watts
Realty Pro, Inc. - Vancouver, WA
A Luxury Experience at Every Price Point!

Thanks Tammie for a blog of many helpful thoughts. My out of town daughter is offering to a builder and can't find a property at a low enough price. I sent her your article so she can ask her realtor to go  ahead and write it up.

Oct 12, 2014 12:43 PM
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Those buyers are in good hands with you, Tammie. The on-site agent won't be able to prey on them. It really pays to work with an agent who knows the law.

Oct 13, 2014 04:12 PM