The first thing you should know when negotiating a price with a builder is that builders don’t like to lower prices. Why would they? They lose out on profits if there are people willing to or already have paid their asking price. Here’s a look at how you should go about making an offer on a new construction home to get the most value out of your purchase while also making the builder happy.
Get a Representative
First off, an expert in the field of new home buying will be able to make sure that you aren’t missing any important information when it comes to what is available in the market, home values, and the process of building a new home.
Realtors are on your side. When working with a builder’s representative, they have the builder’s interests in mind because a builder wants to get the most money for the home that they have built; that’s just good business. However, realtors are friends of the builder as well.
One of the many great things about having a representative is that, because they bring in business for a builder, they receive a commission from the builder. Your realtor should not be limited to a specific builder, and be able to give you the best information for everything available in the area you are looking in. A realtor should be by your side at every step of the process for their expertise in the industry. They explain every detail and give you advice through the process.
Regardless of whether you are buying a home that has just been built, or one that has yet to be started, a realtor knows the average price of what you are looking for, and can make sure that you are not getting stuck in a bad deal. After all, home ownership can be a process that takes several decades to complete.
Lowering Prices Hurts Builders
When a builder in a new community lowers the price in a negotiation for your new home, it sets the precedent for all of the new homes in the community, and could cause problems for those that already purchased a home at the base price. For example, if a builder lowers a $250,000 to $225,000, they are reducing the value of the neighborhood. Although it is likely that a builder can come down on prices, you can get much more from a builder by negotiating upgrades.
Upgrades are anything extra that can be included in the home. These can add up to a pretty hefty price tag, giving you a better value than a home without the upgrades at the same price. Negotiating with upgrades helps builders maintain the value of the home and neighborhood, while giving you added perks because the price tag has not changed. Some common upgrades that you can negotiate with a builder are:
- Granite countertops
- Hardwood or tile floors instead of laminate
- Upgraded appliances
- Bonus appliances
Another reason that an expert at your side is a must, is that they have the knowledge of these upgrades and advancements that can be asked for in a negotiation.
Make a Deal
Once you are fully educated on your options, have decided on a builder, location, and what you are willing to spend on a home, you are ready to make a deal. Make sure that you fully understand the legal language of everything throughout the process, and you make sure to negotiate for what you want. Although a negotiation does not always lead to what you want, it is a great way to get more for your money. Do not accept a deal that you are not happy with, but remember to be realistic.
Make sure that you put everything in writing so you can prove what you have negotiated and paid for. This protects you if something were to have been misremembered or disregarded in the building process. What you negotiate should be exactly what you receive for the benefit of both parties.
Working with NuStar
When looking for a builder for a new home in Utah, we hope that you’ll consider us at NuStar construction. We are dedicated to building quality homes that are done right the first time so you can trust us to build you the best home possible.
We love what we do, and want you to love the home you’re in. Give us a call today at (801) 523-8499. You can also schedule your initial consultation with us online here. We look forward to working with you.