I represent a builder and in general, new construction doesn't leave a lot of room for negotiation. So that is the first hurdle. The second is that this market is going down, not up, so the chance of getting top dollar for your house will be slim. Most people who have fallen in love with another house price their house lower in order to sell it quickly and meet the contingency. They almost never get top dollar due to time constraints on the other house contract. But all that aside, I would say stay where you are if you are happy there. Don't be tempted to buy and sell and possibly be less comfortable financially.

Good luck.

Jo

Jo,

thanks for the quick response and info about builders not leaving a lot of room for negotiations. We are too conservative to consider borrowing more than we could comfortably repay, hence the need to get such a great price reduction.

Too many things need to go your way for you to get this new home..1st, you need the builder to reduce his price 60k,chances aren't great that he would do such..2nd, you need to sell your home at the top end of what it may or may not be worth,very difficult in todays market..3rd, you would have a contingency on the deal, and given the slowdown in sales, the builder may be better served by finding a buyer that has no contingency.. I'd stay where you are..best of luck

I have no clue about your potential financing requirements, but if you are going to rely on obtaining a jumbo mortgage (>$420k) you might want to check out financing first. Due to the current market situation, jumbos are not as attractive as in the past. Some lenders have just flat out stopped doing them.

If you are qualified, getting a jumbo is no harder today then it was prior to the "alleged" crisis..

You guys were suppose to say go for it...I won't show my wife this post.

If we could sell at "our" price (which would be at the upper limit but not an unreasonble) we would not need a jumbo, and could put 20% down.

Even though, the reality is a LOT of things would have to go our way

Sorry to be the wet blanket, but if you like this builder's work, ask him to show you what he could build for $450-$475K in that same neighborhood. Then put your house on the market and work from there. You may have to rent if your house sells, but we've done exactly that and it isn't a big deal.
Best of luck.

Jo

I may be somewhat guilty of reading all the doom and gloom and thinking that its a "buyer's market" and we can get the house for 510k. Of course the flip side is that in this "buyers market" we need to sell ours at a premium.

The 569k this builder is asking is the lower end for this community. Maybe I need to ask how long it's been on the market.

Local has a lot to do with it. I do not live in a buyer's market. It had moved towards neutral but then supply dipped below 5 months and August 07 saw more houses sold and for a higher price in my area than in August 06. It will flow that way the rest of the year now because we had a freak storm last October that basically stopped real estate sales for months. So, from October on out our numbers will be great compared to last year because of an odd reason. While it may be a buyer's market in some coastal areas and NV, it is not that way in all areas.

Find out if your area is currently buyer, seller or neutral market. Then, find out if the builders are hurting or not. There are some areas where new builds are not selling but older homes are. If your area falls into that market, you may have an opportunity.

The generalities on this board are just that. Not all areas were on fire the last five years and not all areas have tanked now.

Many years ago when my first dh and I moved outside a big city we also started looking in a new subdivision. The husband had the nerve to ask about negotiating, and frankly it never entered my mind to do that with a builder. So, he took us past the model and to another one we liked even better. The previous sale had fallen through for some reason in the 11th hour, and he did offer it to us, with no choice of flooring or appliances (too late, already locked in) for a 10% discount off new build price. Yes, we took it and the up part was we closed as quickly as one could be arranged. I just looked up that property a few days ago and found it for sale again. It has appreciated four hundred percent. LOL.

It may be tough getting top dollar for your house in this market. However, when I accompanied my realtor on a preview tour a few weeks ago to check out houses for another client, we found that some of our local builders were offering considerable discounts on spec homes - $70K-$100K off the list price on houses in the $500K range for people able to close by a certain date, plus low, fixed interest financing. Your area may not be as bad as our's, but it wouldn't hurt to ask.

If you really like the home, why not ask a realtor about it and how long it has been on the market. It's better to find out now what you'd like to know than to always wonder "what if?". You might be happily surprised to find your house is worth more than you think and the builder may be willing to come down.

Builders in our area are auctioning off their spec homes and not currently building any more spec homes. This past weekend, one builder had 4 brand new 1800-2100 sq ft homes up for auction -- starting bid at $129,000 for homes that normally would have sold for 180ish. All four homes sold at auction. So I think builders will deal, unfortunately I also think you don't stand much of a chance in getting top dollar for your home. So although you may win in buying the home from the builder at a great price, you're going to lose in selling your home in a buyer's market.

Knowing where you live may help a lot. There are a lot of people that come here and may be able to jump in about how your market is doing

Many years ago when my first dh and I moved outside a big city we also started looking in a new subdivision. The husband had the nerve to ask about negotiating, and frankly it never entered my mind to do that with a builder. So, he took us past the model and to another one we liked even better. The previous sale had fallen through for some reason in the 11th hour, and he did offer it to us, with no choice of flooring or appliances (too late, already locked in) for a 10% discount off new build price. Yes, we took it and the up part was we closed as quickly as one could be arranged. I just looked up that property a few days ago and found it for sale again. It has appreciated four hundred percent. LOL.

I agree. The closer the builder is to being finished on a build, the cheaper they will offer it. There's a house in one development that had the foundation poured, it now has the outside done and still is not under contract.

As was said, you will have no choice on flooring, cabinets, elevations, fixtures, but if you couldn't afford the house otherwise you may get $60k to $70k off. I say talk to them and see what they can do for you.

Another thing to think of. If you do get to the stage where the builder has homes that were spoken for but the buyer backed out (quick move in's) you may be able to deal with them saying take out things like granite counters, change faucets if they were upgraded as well as fireplaces and tile, you may be able to get the home for a really good deal. This is assuming the builder is having a hard time selling the house.

I'm not talking houses that have been completed, but ones where permits were pulled or foundation poured, framing out.

thanks for all the advise. I am going to call the realtor and ask if the builder is motivated. If so, I will then try to to find out what is reasonable for my house. That should answer a few questions.

Tip, using an agent may not get you the better deal.

Nothing ventured...nothing gained. Traditionally, builders don't negotiate on price...but we are not in a typical market.

Just last week a name builder in PA was auctioning off beautiful homes in an over 55 golf course community near Nazareth PA...for HALF PRICE. Last week Hovnanian had a 3 day sale to move inventory.

These days, never say never. Ask...you may be plesantly surprised at the response.

I also agree with roselvr...the lower the price the lower the REA commission...that said...I would not show your hand to the REA...just ask to meet with the builder...approach the builder...and see if you can work out a deal on your own....unless you signed something stating that you have forfeited your right to negotiate your deal.

Last week Hovnanian had a 3 day sale to move inventory.

I have to remember to bump the post...

I've heard that some of the actual contracts that they signed were not signed on that weekend but were in fact people that already signed prior to the sale. Wouldn't doubt it.

JS HOV has another incentive for people with existing homes:

Do you want to buy a new home, but have to sell your current house first? J.S. Hovnanian & Sons now announces their ground-breaking House-to-Sell Contingency Program that eliminates the worries of transitioning from your current house to a new home.

Now you can reserve the home you want on the homesite you love with just a $1,000 deposit, and get:
 90-day first right of refusal on homesite
 3 business days to match any non-contingent deposits on that homesite
 FREE scheduled Design Gallery appointment to personalize your new home
 FREE scheduled Staging Consultation to help you sell your current house
 FREE scheduled MLS Consultation
 FREE Professional Appraisal to help price your current house

So you can focus on selling your current house with the security that your new home will be built when you're ready.

This is the best "Contingency program" available today, so there's no reason to wait. Contact me to learn more about this program and to choose the home and homesite you love, before someone else does.

I also agree with roselvr...the lower the price the lower the REA commission...that said...I would not show your hand to the REA...just ask to meet with the builder...approach the builder...and see if you can work out a deal on your own....unless you signed something stating that you have forfeited your right to negotiate your deal.

If this is a new home community, you really don't need an agent, unless they've put a lot of time in with you and you feel obligated.

Here on the East Coast, prices are plummeting. Houses in my development are now listing at 40K less than what we paid less than 6 mos ago. If you need to sell your house first, then do it. I sold right on the cusp. In this market, I wouldn't dream of putting my house on the market. You would do better to wait it out.

And of course, the best negotiating tool is cash in hand. In this market, I believe that a developer will lower his price if he knows that the sale is certain.

roselvr: "If this is a new home community, you really don't need an agent, unless they've put a lot of time in with you and you feel obligated."

Good point. However, as the OP stated that they "accidentally" looked at the home, I thought that they were not looking with a REA at all...and were simply referring to the on site REA who markets the homes for the builder.

Here in NJ, only licensed REA's are permitted to show homes for sale...even new construction...which is why every new development has a licensed REA on site, and is therefore the person who shows the home. Generally, they just take your info, let you browse the model on your own, provide all the brochures and pertinent info, and answer any questions that you may have.

If you decide to buy, the REA acts as any REA would in the sale of the home....however, in our case, that did not preclude us from talking directly to the builder on our own.

I'm not exactly sure if they were working with an agent and stopped in while driving around or if they drove in on their own and spoke to the agent at the desk. Hopefully they can clear that up

Glad to try to make things clear.

We had been curious about this community and one Sat. it was raining and we said, "Why not".

This gated community would not let us in the gate without being "escorted" by an agent. No way No how. We went in the sales office, and spoke to an agent that happened to be working. She showed us several homes, one of which we really liked.

I called her today and asked her is she was a REA or a sales person for the builder. She stated she was a REA for the community. She also told me that the builder was motivated (whatever that means). Of course she asked us if we wanted to come spend more time in the house and community and then put in a contigency offer. I told her not at this point, as I still need to do some research (find out what I could sell my home for).

My impression is that it may be difficult to get a one on one with the builder, but I could be wrong.

Well, me and wife talked more this weekend and she is reluctant to even try as she feels it would be next to impossible to sell our house at a premium in this market. Although I think it would be difficult, I am not totally convinced it can't be done.

We live in the Savannah, GA. area. Anyone one want to comment on this area's market??

You can negotiate with builders. Using agents just creates more overhead but even still in some markets you can get them to come down. Now if you're paying over half a mil for a house then my guess is you are in a strong buyers market or a market that once was and hasn't totally cooled off yet so just stay where you are. Let someone else get into financial distress trying to pay that loan. You'd have to be a millionaire to afford that. Maybe you are, maybe you aren't.
I like the idea suggested to see what they will build for your price range however I haven't typically found builder willing to play along with that idea. They're more like car dealers. Want to sell you what's already on the lot.

Well, me and wife talked more this weekend and she is reluctant to even try as she feels it would be next to impossible to sell our house at a premium in this market. Although I think it would be difficult, I am not totally convinced it can't be done.

List the house then. Why not? If you have bites, maybe the dream home will be a reality.

Hi All,

I am reading this and need to give you some input- I am a realtor. If the house is listed with an agent you will NOT receive a better deal by trying to go around her. The builder of the home probably has a contract with her to sell the house.AND the reason he hired her is for her to sell the house and for him to worry about building. If he wanted to sell it himself and do all of the work why would he have hired her? I dont know about your state (I'm in MA) but my listing contracts give me the commission on the sale if it is sold during the time of the contract being in place period~ even if the seller sells the home himself.

You need to think of it this way. She is spending her Saturdays sitting there showing people houses, she is spending money on advertising and spending an enormous amount of time in preparing the listings, answering phone calls, etc. So she has done what she has been contracted to do and gets you interested in the house and now you go directly to the builder? Luckily most of us have contracts so as not to allow this to happen.

Good luck in your future efforts and one thing to keep in mind is that you may want to bring a realtor into your home to get an idea of the current market, the current sales turnover and what they think the home is worth and how long things are taking to sell. I know many people are confused about exactly what we do but a good realtor can SAVE you time and money. -- Just do your research and find yourself a good one. :)

"So she has done what she has been contracted to do and gets you interested in the house and now you go directly to the builder?"

I agree with your comments, but must add that I have not attempted to bypass the RA, although I hinted I might. Not to say she does not deserve compensation for doing her job, but she has not done much for me. Yes, she showed me the house but that was only because I had to have a community RA with me to get in the gate. She was just the lucky/unlucky RA to ask me how she could help. I made it very clear to her prior to showing us anything that we were just looking and that if she had a serious buyer, she should tend to them. She was very professional and did her job well, but in our case has not had to work very hard for me. I cannot comment on how hard she has or has not worked for the builder. That is between them.

Although I understand the logic in not using the RA, in the remote chance we get to the stage that we make an offer on the house, I will not try to bypass her. My offer will be the same with or without her. Again it would be between the builder and her as to her compensation.

LOL. Thanks. I hope it didn't sound mean but a lot of times people really don't understand the process need to realize that we are doing are jobs and are very used to showing houses to people who are just looking. We honestly understand that and appreciate the truth and many of these people end up being great customers down the line and like the fact that we would spend our time and energy when they are not looking to buy this minute.

Again,, best of luck!!