For most people, they prefer to own a newly constructed house as opposed to purchasing an old one. The reason behind this mostly lies in the benefits of buying a home from new home builders, which include, customization, reduced repairs as well as warranty protection.
Nonetheless, procuring a house from a new home builder is more expensive than purchasing a pre-existing house due to the new fixtures and design. For first time buyers, the price difference could be a deal breaker; however, below are some tips you can utilize to negotiate with the new home builder.
Find out as much as you can about the new home builder
Unlike buying a home from an owner who has been living in it or renting it out for a while, new home builders have no sentimental value placed on the properties they sell. Their primary purpose is to construct the unit and sell it as fast as possible and move on to new projects.
Hence, to gain negotiating leverage, it is advisable to look into the new home builder's sales over the past year. If the contractor has experienced minute sales, they might be inclined to negotiate a lower price to make the sale. However, if they have had favorable sales, negotiations may not be welcome.
Negotiations do not only relate to the quoted price
It is a well-known fact that sellers don't want to give discounts to the first buyer who comes their way because the notion may force them to give discounts to every other interested buyer. Giving multiple discounts could cut back the new home builders profits, especially if they have numerous houses on sale simultaneously in the market.
Thus, instead of negotiating on the price, you can request the new home builder for incentives that are not related to the cost of the property. Such incentives may include asking the contractor to make additional upgrades to the house for free or for them to cover the closing costs.
Get the negotiations down on contract
If the new home builder agrees to the incentives, to ensure that the new home builder does go through with the agreement, the negotiated terms should also get included in the contract. By so doing, the contractor is legally bonded to honor their end of the bargain.
Consider discounts on properties that are still under construction
For properties that are still under construction, the new home builder will provide a model of the residence with all the amenities and fixtures that will get install when construction gets completed. In a bid to reduce the total price of the home, you can instruct the contractor only to install the standard features and leave out the premium features. If a new home builder is willing to omit the premium features, you can use the prices of the omissions to negotiate for a discount.
However, it is up to you as a buyer to determine the costs of the omitted features. In most cases, if you do not know the prices, the new home builder will provide a discount that is a fraction of the total cost of omitted features.