Working With New Builds – From the Inbox

avatarthumbnail.jpgWe’ll set this one up in fairly general terms …

A buyer walks into a new build looking for a home. After pricing out the home, plus the upgrades the buyer knows he wants, the sales person at the models gives the buyer the bottom line cost. The buyer then wants to make their own offer, lower than what is on the piece of paper.

Will the builder consider the offer?

In short, the answer’s no. Builders do negotiate on price but they do so in the incentive packages that they offer. It’s not the same situation as a resale home where there are offers and counteroffers up and back until agreement is reached.

This isn’t to say that the incentives the builders offer at first blush are the only discounts to be had on any given home. You just need to know what to ask, where there’s room for debate and where there isn’t, whether the builder’s likely trying to hit some sort of sales target, etc. In other words, experience helps.

That brought on the second question:

Can we still be represented by a real estate broker after visiting the models ourselves?

Here, the answer is probably but there are a number of shades of gray.

Easiest scenario – you walk into a builder and tell them you’re working with an agent. Most builders will be adamant that you have to have your agent with you while others will work with you and your agent. It depends.

Assuming you didn’t have an agent at the start, you likely still have the opportunity to hire your own representation and pay the commission out of pocket. The person writing in to me was concerned the representation would cost more than any discount they might be able to receive. I would tend to disagree based on what I’ve been able to negotiate on my own clients’ behalf, but that ultimately is a choice for the buyer to make.

For the most part, though, you’re not going to be able to come in after the fact with your own agent and have the builder pay your agent the co-broke commission.

So then the question becomes flipped – how much is independent representation worth to you? Sometimes this is the question best asked up front rather than after the point, when all your friends are telling you of all the upgrades and discounts they received that you had not been offered because you went at it alone.

[tags]Phoenix real estate, new construction, real estate negotiation[/tags]

About Jonathan

Jonathan Dalton is a 30-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.