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New home purchase

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Lots of pretty solid advice so far, it definitely depends on the builder.

What I do know is one of my best friends is a builder and they are getting hit HARD. It really is rough right now, and this is in Texas (we are feeling the recession less than most places).

I would say you can get them to drop it another $10k at least. Try for $20k, if you really need $200k then walk away. I would venture to say that if they don't agree immediately you might be getting a call in the next 2-3 months.
 
Remind him of how great the housing market is right now. That should be incentive to drop it $20K

If not, kill extras. Who needs a fancy stove or crown molding? Not me...
 
Originally posted by: Triforceofcourage
I am interested in a new house that I like. However, I created a budget for myself and need the house to be 200k. This price will allow me to be comfortable with all of my expenses. This is new construction and I am working with the builder. They have already discounted the house 30k to make it 220k.

I went there for the first time today and the salesman showed me around. I asked him if it was possible to drop it another 20k. He said no. I didn't really make an issue of it and he said he would call me again this week for a follow up to see if I want to go forward.

Think it would be possible to get him to drop it another 20k if I press it? Will builders negotiate on price or is it a take it or leave it game?
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Problem found. Move on or wait him out.
 
Excellent advice so far. Instead of asking for another $20K off, I'd be asking them to throw in all the appliances; fridge/stove/dishwasher/washer/dryer and the front lawn. That's at least $15K retail for decent stuff and labor.
 
Originally posted by: Epic Fail
Ask the builder to make some ungodly changes until the house is unsellable, lowball with 150k.
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They will usually require more deposit now up front for non-customary changes. Also I don't know of many builders that are looking to build to suit for a loss versus just selling an inventory home.

To others...contracts are improving lately so things are moving. It's still slow. What's happening now is many believe they will get homes for free...

You may be able to work out mortgage rate/costs over a pure house price reduction.
 
They are desperate to sell new construction homes right now. Figure out what your closing costs will be. If you were going to pay 200k + 10 grand in closing costs, just tell him you'll pay 210k and them pay closing costs.
 
Originally posted by: Budmantom
Originally posted by: Triforceofcourage
I am interested in a new house that I like. However, I created a budget for myself and need the house to be 200k. This price will allow me to be comfortable with all of my expenses. This is new construction and I am working with the builder. They have already discounted the house 30k to make it 220k.

I went there for the first time today and the salesman showed me around. I asked him if it was possible to drop it another 20k. He said no. I didn't really make an issue of it and he said he would call me again this week for a follow up to see if I want to go forward.

Think it would be possible to get him to drop it another 20k if I press it? Will builders negotiate on price or is it a take it or leave it game?
Click to expand...

You will be better of getting concessions such as appliance and or closing cost.

The developer is better of doing this because he wont kill the comps in the area, if you buy a $220K home for $200k it will show up in the MLS for all the appraisers and Realtors to see so it may be tougher and tougher for him to sell the other homes for asking price.

One last thing you asking the agent means nothing, put it in writing (offer).
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This. Negotiate for upgrades into the price. Stainless steel appliances, granite countertops, hardwood floors, crown molding, etc. The developer will do this but won't lower the price as it may affect the pricing of his other new units.

Also, what market are you looking at?
 
What's worth thinking about is that while prices in real estate were skyrocketing, the builders were also charging much more for new homes. Not many people stopped to realize that the price of materials & labor really didn't rise that much. Builders were making a fortune (or so I'd think.) Right now, a roll of 12/2 NM-B w/ground is under $40. A sheet of wallboard is $6, and 2x6's are cheap. Labor certainly isn't up - with the drop in new construction, I'd think that labor costs would actually be going down for building a new home.

So, see if you can compare this house to one that your builder built 10 years ago... Use that to bargain with. They're probably used to much higher profit margins. Else, build your own house. I don't know how much lots are there though.
 
Originally posted by: MichaelD
Excellent advice so far. Instead of asking for another $20K off, I'd be asking them to throw in all the appliances; fridge/stove/dishwasher/washer/dryer and the front lawn. That's at least $15K retail for decent stuff and labor.
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Let me give some more details because I think I might have left some out. The 30k "discount" already includes 10k in upgraded appliances and 10k in closing costs. So essentially I wouldn't have to pay any closing costs. The other 10k is just a pure price cut I guess.

My budget does include HOA fees, taxes, property insurance etc. So I am looking at it from all costs. 200k would be the max for me to comfortably pay all of my bills and still save some extra on the side. I know an extra 20k isn't much but it goes above my planned budget and I want to be responsible with this purchase.

Thank you for all of the good advice and keep it coming 🙂
 
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