When you buy a new home for yourself, the builder will negotiate with respect to the price, which depends on multiple factors. If you are lucky enough, you can negotiate the best price as well as other upgrades into the deal. Do some market research on what other builders of nearby locality are offering in terms of incentive and upgrades and try to get the best deal.
Often the builder will leave very little room for negotiation either for price reduction or any upgradation. Whether builders are ready for negotiation depends largely on supply and demand, their financing, inventory in hand, paying capacity etc.
Even though the returns on investment on new homes, if put on rent won’t be that great, but you can escape from the endless costs associated with the old houses. Rocco Basile, a construction expert of NY City opines that if you cannot negotiate with the builder for exactly what you want, you can always try for discounts on current upgrade package. It may not be possible for the builder to do much on their list price, but something can be done on the price offered on their upgraded package.
Below are the factors affecting the builder’s capacity to negotiate with the rate offered to you:
1. Location
If the area is in one of the posh locations of the city, please do not expect the builder to negotiate much. In case you refuse, they will get multiple buyers for their property. So, in that he will be quite rigid in terms of the price offered to you. Plus, if it is prime location, you will automatically get the benefit of good roads, nice sidewalks, nearby schools and colleges, and nice local parks, so automatically they quote high.
2. Warranties and New Appliances
Some builders along with new home offer warranty cover on the property inside as well. Typically, the cover will be for the first year. But some provide warranties till 10 years. So, in case of any damage be the house structure or any appliances inside, you don’t have to worry much, and it will take care of by the insurance company.
3. Stick to the Basics
Stick to the basic amenities. Once the ground floor is done, try to customize the property by keeping the costs minimal. You can cut the cost by going for a usual bath tub, fridge, low budgeted counter tops. This may reduce $20,000-$40,000 from your home’s price.
4. Timing
Your timing and the builder’s timing should match for negotiations. If you are buying the house at the end of the fiscal year, you have every chance to negotiate for the price. Suppose last few houses are left, you can grab them at a great price.
5. Qualification
If you have pre-approved loan then the builder can close this deal within no time. In that case, you may ask for price concession or any appliances that can be added. Be it fence, washer, window blinds, or even extra landscaping.
