I have recently had interactions with several buyers who have purchased or are in the process of purchasing new construction homes. In these situations, the buyer did not bring their own agent into the buying process and is now realizing these issues:
- Builders are giving good discounts on the “base model” of their homes, but buyers will upgrade many of the items, so the price will increase.
- In a $ 400,000 home, it is not unusual to end up with $ 40,000 – $ 60,000 in improvements. This is usually well above the buyer’s expectations.
- Most builders stick with the price of upgrades because many of these items make up healthy profit margins for the builder.
- In this market almost everything is negotiable, but you have to know what to ask and when. Most new construction buyers are not familiar enough with the process to know these things.
- Builders will sometimes clean their “spec homes,” homes that were built without a signed Purchase Agreement, at a price substantially lower than the custom version of that same model.
- The builder representative will be very helpful and friendly, but he is representing the builder and is doing his best to get you to buy from them.
- When a builder is finishing a development, they will often substantially lower their prices on the last few houses in an effort to get out quickly. Just this weekend I saw a $ 400,000 new-build two-story home in Albertville for sale for less than $ 300,000. There was another that cost $ 350,000 but now it has been reduced to $ 275,000.
Most builders offer the buyer’s agent a commission by default (anything in the MLS must have a cooperative commission) and most of the time it doesn’t change the price whether you bring your own agent or not, so it suits you Interview multiple agents and choose to work with one before choosing to buy a newly built home.