Are you looking to buy a new construction home in the Boston MetroWest area and you want to know how to negotiate successfully? You will want to read this and watch my video.
Buying a new construction home is a bit different than an older home. Here are some tips to be aware of:
#1 Find a great Agent. Many builders will not allow you to hire your own agent if you wander into the new homes sales office without representation. The builder's sales agents are paid to represent the builder, regardless of what they may tell you. Many will use high pressure tactics to persuade you to sign a contract. Find an agent experienced in new construction and let your agent introduce you to the builder so you're covered with someone working in your best interest.
#2 Negotiate on upgrades, not price. Many builders will throw in some extras since that is where they make the most money. They also do not want to drop their prices because it doesn’t look good- not only to new buyers but to those that have already purchased. Think about the extras you want and ask your realtor to negotiate with some of those.
#3 Keep your emotions out of it! A builder is a corporation; treat it like a business transaction without emotion. This is where having an agent who has your best interests at heart is critical. Many times I will tour a community with a client, and then suggest that they head home so I can talk to the sales rep by myself. I don’t want them to know how badly my buyer wants the home right away. A good poker face in the beginning can go a long way to negotiating on your behalf.
#4 Be prepared to walk. Be willing to walk out the door. If you feel you are getting in over your budget then get up out of your chair and let the builder know this isn’t going to work. There’s a big chance they’ll come running to ask what they can do to get you to stay.
#5 Consider buying a finished home. If there are any homes that are already up in the complex, or even the model if the builder is willing to sell, you may be able to get a better deal since in both cases the builder knows his costs already and may be ready to get the home out of their inventory.
#6 Don't Automatically Use the Builder's Lender. Builders often prefer their own lender because the builder will be kept fully informed of your personal progress. But a builder's lender might not offer you the best deal. Ask if there is an incentive to use the builder's lender and then shop around to compare rates.
#7 Get a One Year Warranty. Most builders do this but if not have your Realtor negotiate one. If it does exist, read the fine print so you know exactly what the builder is covering. Also, if the home is not yet built make sure there is a penalty in place if the home is not built on time. If a builder goes way over the projected close date, this not only is an inconvenience but it could cost you real money with your lender to hold your rate.
#8 Get your home inspected by a Licensed Home Inspector prior to closing. Make sure your Realtor adds a home inspection contingency to the offer. The Home Inspection will usually be done a few weeks prior to closing and will be for punch list purposes only. This will not only insure you are getting what you paid for but will get the builder to work on a timely basis to fix any issues prior to close.
If you’re looking to build, buy, or sell a home near Boston, be sure and contact me. I’m happy to assist you.
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