Learn how to make a competitive offer on new construction homes with expert advice from a seasoned Realtor. Discover tips on negotiation, timing, and leveraging incentives to get the best deal.

Realtor Secrets to Making a Winning Offer on New Construction

Making an offer on new construction can be a unique and complex process. As a Realtor in Georgetown, Texas, I've had my fair share of experiences with builders and new homes. Let me share some key insights to help you navigate this journey successfully.

Understanding the Negotiation Process

One important thing to know when making an offer on new construction is that the listed price isn't set in stone. In real estate, everything is negotiable. Let me share a funny story to illustrate this:

Once, I was negotiating a new construction deal and I sent over comparable sales (comps) from other homes to the sales rep to justify our offer because it was well under the asking price. He was amazed and told me no other agent had ever done that before. To me this is a logical common practice that can give you leverage, but this new construction sales rep had never seen it done.

This is why it’s so important to find a Realtor who’s natural extinct is to negotiate everything

If you haven’t already, read our Essential Questions To Ask Before Hiring A Realtor: Your Guide To Choosing Right

Key Points to Consider

• Negotiation Is Possible: Builders put numbers into their system, and either they accept your offer, or they counter it. Demonstrating why your offer is fair, using comps and market analysis, can make a big difference—like when I saved a client $15,000 by showing the builder how similar homes in the area were priced lower.


• Market Conditions: Builders have less leverage to reject your offer if the market is soft or if they've had properties sitting for a while—an example of this is when we helped a client secure a substantial discount on a home that had been on the market for over six months during a slow sales period. The longer the house is on the market, the more likely a seller will lower their asking price. Always negotiate! You don’t get what you don’t ask for.

Timing Your Offer

The timing of your offer can significantly impact its success. Here’s what you need to consider:

1. Completion Stage

• Early Stages: If the home is far from completion, builders are less likely to negotiate since they have more time to find another buyer. If you are in a competitive market and need to make an offer at this stage, then present a strong offer close to the asking price. Highlight your qualifications by showing you are a serious buyer with pre-approved financing. Make sure to indicate willingness to work with the builder’s timeline and preferences.


• Near Completion: As the home nears completion, builders are more willing to negotiate to avoid carrying costs and get the property off their books. Have your Realtor present your lower offer by justifying it with market comps and analysis. Your Realtor should highlight how your offer will save the builder carrying costs and help them close their books. They should also negotiate for additional perks like closing cost assistance or upgrades.


• Completed Homes: Inventory homes, which are already completed, often come with more negotiation room. Builders want to sell these quickly to avoid additional costs. For more on this, read our article on Unveiling The Truth Behind Builder Incentives: A Guide For Homebuyers In Texas

Leverage Incentives

If you read the article linked above, then you know that builders often offer various incentives to attract buyers. These can be powerful tools in your negotiation arsenal.

Common incentives include:

• Rate Buydowns: Builders may offer to buy down your interest rate, reducing your monthly payments.


• Closing Costs: Some builders will cover your closing costs, saving you money upfront.


• Additional Perks: Look for incentives like free appliances, blinds, or upgrades.

Evaluating Incentives

• Comparable Sales: Check recent sales to see if similar incentives were offered. This can help you gauge the value of the incentives provided.

Additional Tips

1. Research and Compare

• MLS Listings: If available, check MLS listings for similar properties to understand current market conditions.


• Finish Quality: Compare finishes and lot locations. A home with a greenbelt lot and view will be priced differently than an interior lot.

2. Be Prepared to Walk Away

• Stand Your Ground: Sometimes, the best strategy is to walk away if the builder isn’t meeting your needs. Recently, I walked away from a deal, and the builder came back with a $10,000 reduction.

Conclusion

Making an offer on new construction requires strategy, timing, and knowledge. Negotiating with the sales rep and surprising him with comps shows that being informed and proactive can significantly impact your success. By understanding the negotiation process, leveraging incentives, and timing your offer correctly, you can secure a great deal.

Remember, staying informed and prepared to negotiate is key. If you need personalized advice or have any questions, feel free to reach out. Ensuring you make wise and strategic real estate decisions is part of our commitment to help you build a legacy that will empower generations.

TL;DR

When making an offer on new construction, remember that everything is negotiable. Use comparable sales to justify your offer, time your offer based on the home's completion stage, and leverage builder incentives like rate buydowns and closing cost coverage. Be prepared to walk away to get the best deal.

FAQs

1. Can I negotiate the price of a new construction home?
   
   
   
   • Yes, the listed price is often negotiable.
   
   
   
   


2. When is the best time to make an offer on new construction?
   
   
   
   • Near completion or for inventory homes, as builders are more willing to negotiate.
   
   
   
   


3. What incentives can builders offer?
   
   
   
   • Rate buydowns, closing cost coverage, and additional perks like free appliances.
   
   
   
   


4. Should I use comparable sales to make my offer?
   
   
   
   • Absolutely, providing comps can strengthen your negotiating position.
   
   
   
   


5. Can a Realtor help with new construction offers?
   
   
   
   • Yes, Realtors can provide valuable market insights and negotiation strategies.
   
   
   
   


6. Are there any risks with inventory homes?
   
   
   
   • Typically, no more than any other home; they can actually offer better deals due to builder incentives.
   
   
   
   


7. What if the builder refuses my offer?
   
   
   
   • Be prepared to walk away; sometimes builders will come back with a better deal.
   
   
   
   


8. Do all new construction homes appear on the MLS?
   
   
   
   • Not always, but it's important to check MLS for comparable properties.
   
   
   
   


9. How do I know if a builder's incentive is a good deal?
   
   
   
   • Compare it with recent sales and consider the overall value it adds to your purchase.
   
   
   
   


10. Can I ask for specific upgrades or changes during negotiation?
    
    
    
    • Yes, requesting specific upgrades can be part of your negotiation strategy.
    
    
    
    

Looking for more real estate insights or ready to start your home buying journey? Connect with us at T. Kerr Property Group, where your home dreams are our mission.

Call us today at: (512) 851-8350