I am going to attempt to negoiate with a home developer tomorrow

[krunchykrome]

We've found a nice townhouse we would like to buy. The townhomes havent been built yet, but we saw a model and priced one with options. I have been told in the past that developers will not negotiate on new homes.

Here are the facts:

Six months ago, the homes were originally priced at $390K (starting before options)

Today, starting price is $330K. After we priced it with options, the price came to $360K.

I'm going into the office tomorrow with my offer. If they accept my offer, I will begin the contract process as early as the next business day, no bullsh*tting.

My offer will be that we take the house at base price of $330K, and we want all of the options we picked for $5K. On top of that, we want them to pay for $6500 of the closing costs.

Do you guys think this is unreasonable? Am I stretching it here? I figure that we are in a better position than the developer. They have materials, and work in progress invested in these homes in a very poor market. It's costing the developer money everyday a house is not sold. We on the other hand have another pre-existing home (pre-owned) that we like that has been on the market for 90+ days. The new home is our first option though.

What do you guys think?

 

[blinky8225]

Well, it's a buyer's market now, supposedly, so I would say to at least give it a try.

 

[Aharami]

give it a shot. whats the worst than can happen?

 

[TruePaige]

Originally posted by: Aharami
give it a shot. whats the worst than can happen?

 

[dartworth]

you go girl...stick it to the man

 

[Slew Foot]

Go for it, heck even start lower, what the worst they can do, come back with another offer?

 

[AlienCraft]

If you're not embarassed to say the price you have in mind, it's too high.
Your price is too high, imo.

 

[pstylesss]

If that's the price you want then I would ask lower. It isn't going to hurt and they'll counter offer. The developer has no personal attachment to the property so you won't hurt his feelings.

 

[seemingly random]

If this is the one you _really_ want and are afraid of hurting the salesman's feelings, find another comparable townhouse (is this different from a townhome?) to work on your negotiating skills. It might not be a bad thing to have another deal going that can be used as leverage. Instead of making a demand, I'd let them talk and see just how far they're willing to go. Once they see that you're serious, you might be surprised. You are in the driver's seat but don't necessarily need to rub their noses in it.

Like others, I'd go lower - or better yet try a couple of other places to get a feel for things. How are you going to feel if your first offer is accepted without a fight? If you're not used to negotiating, don't let them throw you off - if they're any good, they will. Don't take any of it personally (easier said than done). Be ready to walk away if you don't get what you want.

When you're talking this much money, there's always going to be emotion involved on both sides - some just do a better job of hiding it.

 

[EagleKeeper]

If the units have not been built, you may have a harder time with the negotiations.

At present, they have an investment in the land only.

 

[BurnItDwn]

Doesn't hurt to try.
I've never bought a "new" home, but the two I've bought over the years have had different amounts of success with negotiation.

My townhouse was listed for 118K and I could only get them to budge down to 115K (that said, it was priced right below market, and it was towards the end of the housing boom.) Managed to get 2.6% of the price reduced.

The house I live in now, was listed for 189K when I viewed it. I was going to make an offer the next business day, and I found out they had dropped their asking price down to 181K, I got the house for just under 175K. We negotiated 3.4% below the revised asking price.

You probably don't have as much room as I did in my situation, but they may budge a bit.

 

[vi edit]

Originally posted by: Common Courtesy
If the units have not been built, you may have a harder time with the negotiations.

At present, they have an investment in the land only.

Kinda what I was thinking. Far less bargaining room in a non-built house than one that is sitting in inventory collecting dust and interest fees.

 

[krunchykrome]

Originally posted by: vi edit

Originally posted by: Common Courtesy
If the units have not been built, you may have a harder time with the negotiations.

At present, they have an investment in the land only.

Kinda what I was thinking. Far less bargaining room in a non-built house than one that is sitting in inventory collecting dust and interest fees.

yea, I don't think they will budge. New homes have a better chance at negotiations at the very begining of development or at the very end when only a few homes (already built) are left.

 

[ViviTheMage]

Originally posted by: krunchykrome

Originally posted by: vi edit

Originally posted by: Common Courtesy
If the units have not been built, you may have a harder time with the negotiations.

At present, they have an investment in the land only.

Kinda what I was thinking. Far less bargaining room in a non-built house than one that is sitting in inventory collecting dust and interest fees.

yea, I don't think they will budge. New homes have a better chance at negotiations at the very begining of development or at the very end when only a few homes (already built) are left.

good luck.... I had a hard time bargaining down centex homes, those f*ckers sold fast....

 

[amdskip]

What options do you want?

 

[Descartes]

I bought a house from a regional builder just last year. It was a spec house, so he had to try and move it. The house was ultimately discounted almost $100k from its original price, and I was able to get them to pay the closing costs, add some additional woodwork to the interior, add a new stainless fridge, seal and paint the garage floor, do some more landscaping, etc.

So, I think your options would be better in the current market. A year ago (in ATL at least), builders were hurting but not to the point they are now.

One thing you have to keep in mind is that builders don't want to lower the value of existing homeowners, nor do they want to lower the value of those that are looking. This is why they tend to give more in options than give on the price; they don't want the sales records showing you bought it at a hugely reduced cost from the other homes. So, if he doesn't like the $330k, I'd consider countering with a lot more options instead, especially if it's mostly labor (add a new room maybe, porch, etc.).

Good luck.

 

[ViviTheMage]

Originally posted by: amdskip
What options do you want?

QFT -- you could hire your own contractors to do it cheaper...

 

[krunchykrome]

Originally posted by: ViviTheMage

Originally posted by: amdskip
What options do you want?

QFT -- you could hire your own contractors to do it cheaper...

About $30K in options

Hardwood floors
recessed lighting
fireplace
granite countertops
stainless steel upgraded appliances
upgraded washer/dryer
cherry wood cabinets
upgraded tile for the master bathroom

a few other items that I can't think of right now. But thats basically the jist of it.

 

[m1ldslide1]

Originally posted by: Descartes

One thing you have to keep in mind is that builders don't want to lower the value of existing homeowners, nor do they want to lower the value of those that are looking. This is why they tend to give more in options than give on the price; they don't want the sales records showing you bought it at a hugely reduced cost from the other homes. So, if he doesn't like the $330k, I'd consider countering with a lot more options instead, especially if it's mostly labor (add a new room maybe, porch, etc.).

That's a very interesting point. I'm going to keep that in mind, even if the OP doesn't.

 

[ViviTheMage]

Originally posted by: krunchykrome

Originally posted by: ViviTheMage

Originally posted by: amdskip
What options do you want?

QFT -- you could hire your own contractors to do it cheaper...

About $30K in options

Hardwood floors
recessed lighting
fireplace
granite countertops
stainless steel upgraded appliances
upgraded washer/dryer
cherry wood cabinets
upgraded tile for the master bathroom

a few other items that I can't think of right now. But thats basically the jist of it.

Woofta, lots of options...hope they bite on your offer! tough call on what to do.

Recessed lighting is really neat, and granite counter tops are a must!

 

[krunchykrome]

Originally posted by: ViviTheMage

Originally posted by: krunchykrome

Originally posted by: ViviTheMage

Originally posted by: amdskip
What options do you want?

QFT -- you could hire your own contractors to do it cheaper...

About $30K in options

Hardwood floors
recessed lighting
fireplace
granite countertops
stainless steel upgraded appliances
upgraded washer/dryer
cherry wood cabinets
upgraded tile for the master bathroom

a few other items that I can't think of right now. But thats basically the jist of it.

Woofta, lots of options...hope they bite on your offer! tough call on what to do.

Recessed lighting is really neat, and granite counter tops are a must!

I doubt they are going to accept my offer. I have a feeling we'll end up buying the existing townhome that is 10 years old. It's been on the market for 100 days and we have more room to negotiate.

 

[TwiceOver]

I think they would without the closing costs. The original $360K is a pretty far cry from the $328.5K you are offering. Worth a shot though, it is a buyer's market. Now why any buyer would want to purchase an apartment in this market is still beyond me.

 

[krunchykrome]

Talked to the sales rep. They are willing to give us $9k in closing costs, free stainless steel appliances, and free granite countertops. The thing is that this is an incentive to everyone. I want more...

Im going to meet with the rep today and tell him that we will sign the contract at the end of the week if they throw in hard wood floors at no cost to us. Otherwise, I walk....(and accept the previous offer a few days later )

 

[isekii]

Originally posted by: krunchykrome
Talked to the sales rep. They are willing to give us $9k in closing costs, free stainless steel appliances, and free granite countertops. The thing is that this is an incentive to everyone. I want more...

Im going to meet with the rep today and tell him that we will sign the contract at the end of the week if they throw in hard wood floors at no cost to us. Otherwise, I walk....(and accept the previous offer a few days later )

lol make sure it's real hardwood flooring and not some laminate.