New Construction "Poker Face"

[Beasley12]

I am riding high right now.  My divorce will be finalized at the end of the month making me free to app for FHA. I found out that the grant program that I plan to use has WAYYY more money than I thought so by the time I am ready, there will be plenty ......and I found a model house identical to the one I want.  I have 200 pictures....lol 

Anyways, I walk into work today and one of my coworkers starts drilling me about not falling in love with the house and having a "poker face" during negotiations.  He starts talking about incentive packages and this and that....by the time he was done I wanted to cry.  First and foremost.....I do not have a poker face.  How I feel is what you will see on my face....sorry about that.  Feel free to blame my moma.  If someone has any negotiating tips for new builds I would love to know them.  I am not a negotiator....at all. I will be working with a broker however I want to be comfortable knowing that I know a few things myself.  

Funny thing is....I didnt think new construction homes could be negotiated.  I figured if the house costs 100k...then you pay 100k plus whatever upgrades you want.  No one in my immediate family own a home.....they dont know....I dont know. 

[foofighter74]

Upgrades are usually quite overpriced.  As for the home itself, it's just like anything else - the seller marks up the price to increase their profit.  They have costing people who can determine exactly what they have to charge to meet their basic profit requirement so there is negotiating room - it's just that most people assume, like you did, that a new house costs a certain amount, and that's what you have to pay.

I can tell you that there are websites that list the prices the development has charged for the model in the past.  For example, on zillow, our model in our development where we are currently building was selling for $8,000 less as a base price last summer.  So we walked in with that sheet in our hand and started from there.  Did we get a full $8,000 off the price? No, but we got enough to feel like we'd accomplished something.

[Autumnslight]

If you're not the negotiating type, definitely get a good realtor to do the negotiating for you! Some builders will totally take advantage of unsuspecting buyers without realtors. On the other hand, you can generally negotiate some good deals yourself, if you do your research and stand firm.

[jordanmedical]

I agree, lucky for me, I had a realtor who loved to negotiate. Wouldn't have even known I could negotiate for HOA to be paid.

[Mike_B03]

Usually you can't negotiate the sales price of the house, but you an sometimes negotiate some upgrades or X amount in upgrades. It really depends on the community and the market, if its a hot market and houses are selling quick, they're not do any negotiating or incentives at all.

[Beasley12]

Well I am hoping to get a little wiggle room. I would be happy with no money off the house but with $5000-10000 in upgrades! Dare to dream......

[Autumnslight]

My builder was offering a few grand of incentives, and I negotiated for more. I ended up with a little over $10k of additional discounts over the initial incentives. Of course, I started off by asking for almost $30k in discounts, which I obviously didn't get. But hey, it was worth a shot!

It really does depend on the market though. If there are only a couple lots left and the community is selling fast, you probably won't get much in the way of discounts. But, if you can find a community that's selling more slowly, or if there are certain lots that aren't selling well, you can usually get better deals.

I chose a community that hasn't sold many new lots recently. I also picked a lot that was a little smaller than some of the others, and was in the middle of a stretch of empty lots. I had heard my sales rep mention that he hadn't been able to get anyone to buy one of those lots, and how he wanted to get someone into one of them, so that others would hopefully follow. I latched onto that, and used it in my negotiating. I initially went through the process having "chosen" a lot that had a premium on it and was in with all the other already-developed lots. Then, when we got into the heart of the negotiating, I mentioned that I'd be willing to change to one of the lots that I'd heard him mention, if it would help the deal. That's what basically cinched it I believe.