It often has been said that everything in life is a negotiation. What you say, what you do, all can have an impact on what you receive in the end. In almost any circumstance, you’re either gaining or losing leverage.
Model home agents and the builders they work for know this. From the time you walk in the front door the negotiations have begun, even if you don’t know it.
This is but one of the many reasons why I recommend always taking an agent with you on your first visit to a new build (I’m happy to help if you’re here in the Phoenix real estate market). Since real estate agents negotiate for a living, we know the basic reality that the talks begin as soon as we walk in the front door. And we have the emotional detachment necessary to make sure leverage isn’t lost.
Leverage is a key concept at this time of year as nearly every builder in the Phoenix real estate market is offering “year-end” deals. Here’s what you ought to know – many (but not all) of the incentives you see may be available in the future. The agents will tell you that they aren’t, that these are one-time deals designed to move houses … but if the houses don’t move now, the builder still will want them to move in the near future.
In offering these deals, the builder already has shown his hand. That’s leverage for you.
Take the Friday morning time share presentation I went to last week. When the time came to discuss pricing, there was the price and then there was “the today only” offer. This was followed by the “what will it take to get you off the lot in a new timeshare” offer, which was even more limited time, if such a thing is possible.
If I had gone back today to make the purchase, I’m almost certain I could have received the offer that only was available to me on Friday. Think about it – wouldn’t it be stupid of the time share company to lose a potential sale by changing the terms in a span of four days? Does it really matter whether I purchased Friday or today? Hell no.
The same can happen with a builder if you understand the nature of the incentives and the motivation for the builder. It’s often more subtle than you may think. For instance, there’s a perception that cash is king but there are limits. Knowing where those limits are is crucial as it’s often possible to receive more by pushing less.
Leverage is the key. If you’re not gaining leverage, you’re giving it away.
And that’s advice that will hold year-round.
[tags]Phoenix real estate[/tags]