Buying an existing home is all about the art of the deal. A new home, on the other hand, is set in stone, right? Not exactly. While the materials might have a set cost when a builder is estimating your home, you can still negotiate a better price when buying a new build. Even if your drywall and lumber costs are fixed, you might be able to snag upgrades on the cheap. Before you sign a contract with your builder, make sure you’re getting the best price when buying a new build by using these steps first. That way, you can sign knowing that you got the best deal possible.
1. Walk the lots
Your builder has created your dream development, but each and every lot is different. Your builder knows that some lots – like the end of a cul-de-sac, for example – are more desirable than others. As such, your builder might price the home there accordingly. You can negotiate a lower price by taking the time to walk through the available lots and choosing one that doesn’t have a premium price. If you’d be just as happy on a corner lot, why pay high prices for something else?
2. Pull comps
They say that comparison is the thief of joy, but when it comes to buying a new build, comparison might be your ticket to a better price. You can access public county files to see how much homes in the area are selling for or ask your builder for comparison homes and prices. That way, you can gauge where your home price should be and use it as a starting point for your own negotiations. Pulling comps can also ensure that you’re not paying more than you have to based on the current sales climate.
3. Price out upgrades
Your builder has a catalog of upgrades that you can choose from. You’ll get a base price for standard finishes, but each upgrade – think higher-end floors and finishes – will crank up your total price. Here’s the thing, though: Like beverages in restaurants, upgrades are mostly profit. Sure, the materials might cost a little more, but builders skim a hefty premium off of the top. Before you agree to your must-have upgrades, take the time to price them from a separate contractor. You’ll get a more realistic price and can use it as a bargaining chip, or opt to have your upgrades installed by a different (cheaper) contractor.
4. Get incentivized
One way that builders attract buyers and encourage different services is by using incentives and credits. There might be a credit for closing in a certain month or an incentive to use a builder’s preferred lender. Ask your builder about available incentives and utilize credits to help pay for upgrades or drive down the final price of your home. In some cases, simply asking about current incentives can save you thousands of dollars.
5. Tour the model
If your dream house still seems a little out of reach for you financially, ask your builder about their model homes. Model homes are built on the most desirable lots with some of the highest-quality craftsmanship. At the same time, they’re often sold at deep discounts because they’ve been used as model homes and aren’t considered new or custom. Opting to buy the model means better upgrades and finishes at a lower price, putting your dream home within reach.
6. Change neighborhoods
Real estate is about supply and demand, and new builds aren’t any different. If you’re after an exclusive neighborhood with a low supply of homes, you’ll pay for it. If you, however, get into a new neighborhood or one that isn’t selling as quickly, you could save major money. Ask your agent or the builder about available neighborhoods and lots. If you’re willing to choose a new development, you could get the same home for much cheaper.
7. Shop around
Every builder has cultivated a network of preferred partners. From lenders to roofers to framers, most builders use the same contractors again and again – even if they don’t offer the best price. Don’t be afraid to shop around and check prices with other builders, contractors and lenders. In some cases, the incentive to use your builder’s preferred lender might be less valuable than a lower interest rate with someone else. Once you’ve exhausted your research, you can choose a builder and sign a contract confidently.
Your builder might quote you a price to start, but new builds have a lot of variables. The way you design, build and fund your home can make a big difference in price. Look into your options and research costs when buying a new build to make sure that you’re getting the best deal. Moving into your dream build is great, but getting it at the best price puts the “sweet” in “home sweet home.”