Home Buying negotiating with builder

Hello Leonardo,

Everything is negotiable when you have the right realtor next to you. A good realtor has contacts with all kinds of people. He can point you towards few lenders where you can compare apples to apples to see if you are get getting the right loan and interest rate.

Your builder, lender, title company, house inspector, appraiser are all key to getting your dream home. Your realtor does this day in and out and should be able to guide you in the right direction.

Chris
Coldwell Bankers
www.ChrisRealEstatePro.com
832.859.8698

Hi Leo,

I would absolutely recommend using a realtor during your negotiation with a Builder for new construction. I've personally worked with a lot of different Builders with Buyer clients of mine (and on the flip side, sold homes in which the Seller purchased new construction going directly through the Builder and lost money on the sell). A couple of things to consider:
1) Is the neighborhood a brand new development, an extension of a newer/recent development, or a neighborhood where the Builder is nearing completion and there are a mix of resale and new construction? The answer to this is extremely important when looking at list price and formulating a purchase price, considering most importantly, the appraisal!! As the owner of a residential appraisal company, we work frequently with new home communities. Many times they have access to comps/sales that aren't disclosed in the MLS. This is so important when looking at what price you want to be at in the neighborhood.
2) Builders aren't necessarily selling what they used to sell a couple of years ago. There are more inventory/spec homes on the market than there were before and typically there is more room to negotiate on these.
3) Is your purchase contingent on selling your current home? This makes a difference and you'll want to be informed of the specifics of the Builder's contingency contract.
4) You should be advised how the earnest money works on new construction, the new construction/Builder contract, inspection period, working with the Builder's Lender, etc. Builders are not going to divulge all this information. The sales associate is simply looking to get you contracted on a house and push their in house lender.

Please feel free to reach out with further questions. I'm always happy to help. I'd gladly share my experience I have with various Builders and my thoughts on the communities you are interested in.

Darby Grimmett / KW / darby@darbygrimmett.com / 936-827-9217

Hi Leo, simply put, lender incentive can be a good or bad thing, depending on interest rate and term. With the incentive to include closing close, that's quite a bit of saving for any buyer. I would suggest to ask to see the fine print and best, have a realtor throughout the process. Any qualified agent should know the right questions to ask. Lastly, not all builders are same, be careful and happy house shopping!

John

Lennar is selling very quickly and is a top producer so they do not typically need to give a lot of incentives to sell. The '15k promotion' is probably a lure and not really one.
You need a proper comparative market analysis made by a realtor to know for sure if you are getting a good deal.
I have experience building houses myself and working with builder to sell their homes, feel free to contact me directly.
Lennar has a good reputation as a builder but you still need to negociate the price.

It is always better to be represented by a Realtor when buying a house. As they are more current on what is going on with the market and the offers given by the builders. You should interview couple Realtors and see if you like to work with one.

The reverse question is: if you could have an expert on the housing market and somebody with some clout that could get things done when something goes wrong ( in new home construction things always come up), and it costs you nothing to have the representation, would you do it? I think most people would say yes, a free expert fighting for me, that's a no brainer. The builder sales rep is always friendly in the beginning but in the end the sales rep works for the builder and not you. Take the expert that costs nothing for you and can go to bat for you when something doesn't go right during pre-construction, construction, or with the mortgage company. Make sure your agent has experience in dealing with builders and/or has a relationship with them, that goes a long way if something comes up.

That is a great question. I always recommend that buyers be represented when buying a new home. It costs you nothing to have a Realtor represent you, but gives you an additional voice and someone who can proactively follow progress along the way for you. I recently helped buyers on new construction and I'm sure they will tell you it was great to have someone act as their liaison. While having a Realtor cannot guarantee you a better price, they can help you ask for and negotiate other items for your home. Or ask questions they feel would be important to you that you may not know to ask. I have had some buyers initially want to build and buy new and then decide to buy an existing home that better met their needs and budget. A sales rep for a builder will only be able to show you what they have. Keep in mind that if you have started a discussion with a builder they will sometimes not allow you to have your own agent. Communicate your desires with them BEFORE you sign anything.

In the same regards with lenders, using a builder's lender will often gain you incentives such as money towards closing costs, or them paying for your title policy. An outside lender may not be able to do all that, but often they can be competitive with pricing and fees. More importantly an outside lender, in my experience, really shines when it comes to customer service. They know if they don't have satisfied customers they have the potential of losing business or not gaining additional referrals. A builders lender will always get business. In my last two transactions one client used an outside lender, the other used the builders lender. It was a dramatic difference in communication, explanations to the buyer of the process. Ultimately the outside lender transaction actually went smoother and closed quicker. A lender I use frequently is Ben Sinclair with Premier Nationwide Lending bsinclair@pnlending.com. If you'd like other names let me know

Leonardo, Great question! I would always suggest using a realtor when purchasing either a new or used home. Built into the builder's price, is the realtor's commission. So having an opinion from a professional, is definitely recommended. In order to give you more details regarding your options, it would be great to be filled in on all of the details of what the builder has offered you. If you go with their lender will they cover the closing costs? What interest rate are they offering? Is the $15k they are offering for actual upgrades, or are they standard features most homes come with now? Let me know if you're interested in further discussing this.