You’re looking for a brand new home, but are you off budget? There is actually a way to negotiate with a new construction home, so you leave in a fair deal and space of your dreams. Whether you’re looking to build a new home in Rock Hill, North Carolina or looking to buy a new construction home in Palm Springs, California, let’s take a look at all you need to know about how to negotiate a new home price with a builder in this Redfin article.
Key takeout
Newer construction homes typically have less room for wiggling base prices, but there is plenty of space for incentives. Working with agents who are familiar with new construction is your greatest advantage. If the house is already built or if the builder needs to close quickly, it is most leveraged.
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What is a new construction house?
A new construction home is a new construction that has never been inhabited before and is usually sold by a builder or developer. These homes include custom builds, ready spec homes, and new residential development homes.
The advantages of a new construction home
Modern: Most new construction homes have modern features such as layout, design, and smart home technology. It can also include money-saving elements such as energy-efficient HCAC systems, thermostats, and double-pane windows. Lower Maintenance and Repairs: Everything is brand new, so it’s unlikely to face major repairs or maintenance issues for a while. Also, many new homes come with warranty covering structural defects, systems and finishes. Customizable: If the house is still under construction, buyers may have the opportunity to choose design elements such as flooring, cabinetry and other fixtures.
Cons of new construction homes
Higher advance costs: Most new construction homes are often more expensive than resale homes, especially due to upgrades and customizations. Moving in Timeline: If your home is no longer built, you may face delays in travel due to changes in construction schedules, weather, or supply chain issues.
Can I negotiate with a new construction home?
In short, yes – but perhaps not the way you expect. Builders are usually reluctant to lower base prices as they affect the value of other homes in the community. Instead, they are more likely to offer incentives such as upgrade finishing, closure costs support, and flexible travel days, especially if the home is already built or sold late.
Read about strategies that will help you get the best deal possible when purchasing a new construction home.
Seven Ways to Negotiate Prices for a New Construction Home
1. Working with real estate agents
Choose a real estate agent in your area and gain experience in a new construction home. They have knowledge of local markets, builder pricing strategies, contract terms and timelines to help you defend your best and ensure the best deal.
2. I’ll look into the house
To better understand listing prices, check out recent sales of comparable new construction homes, prices per square foot, builder reputation and inventory, sales pace, contingency and contract details. Understanding your home will help you determine whether the price is fair, identify areas of negotiation, and gain leverage during the negotiation process.
3. Understanding the local market
Similarly, having knowledge about the local market will help in the negotiation process as it helps to better understand how the House list prices match current demand and justify negotiations.
4. Pre-negotiation research builder
Before choosing a reputable builder, exploring your local builder will help you gather important information about quotes and comparison negotiation terms. This will help in the negotiation process. We recommend using agents experienced in new construction homes.
Know what you can negotiate
Builders may not be too upset about the base price, but in many cases they can negotiate other perks.
Upgrade Closing Cost Supports Lot Premium Flexible Mobility Timeline Home Guarantee or Extended Coverage for Flooring, Countertops, Appliances
Builders often prefer to provide incentives rather than lowering prices to protect the value of other homes in their communities. Before negotiating these terms, make sure you have knowledge of your home, builders and local markets and are working with your agents.
5. Time of your offer
It can give you a great advantage when negotiating a later season, end of a quarter, fiscal year deadlines, or if your builder has some unsold, unfinished homes.
6 Negotiate on an already built house
If you are not interested in customization, the builder is usually willing to negotiate with an already built home. Because they spend money on the builders who sit empty every day. Another plus is that you don’t have to wait for it to move.
7. Everything will be obtained in writing
Builder representatives may orally promise perks, but will not count unless they have a contract. Re-check all incentives, upgrades, and timelines.
New Construction Home Price Negotiation FAQ
How much do I need to negotiate with a new construction home?
Negotiating other perks, such as renewals, closure costs assistance, and housing guarantees, could lead to better results. If you want to negotiate a listing price, 1-5% off is common, but we recommend working with an experienced agent in price negotiations.
Can I negotiate at a home with specs?
Yes, you can negotiate on both specifications and ready homes, but you could be more successful in a ready home. If you are considering customizing your home, consider negotiating an update with a spec home builder.
How do you know you’re doing a good deal with a new construction home?
Working with agents will allow you to do a fair deal, along with understanding the local market, builders, equivalents, and the home itself.
