{"id":230507,"date":"2019-02-18T20:49:00","date_gmt":"2019-02-18T20:49:00","guid":{"rendered":"https:\/\/www.tenproperties.com\/?p=230507"},"modified":"2020-08-10T20:50:23","modified_gmt":"2020-08-10T20:50:23","slug":"can-you-negotiate-with-new-construction","status":"publish","type":"post","link":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/","title":{"rendered":"Can you negotiate with new construction?"},"content":{"rendered":"\n

Absolutely, but it\u2019s different than with re-sales. Most builders won\u2019t budge on base price, as it lowers the Average Selling Price (ASP) of the neighborhood, which can devalue the community. Most new communities have an HOA, which will oftentimes impose restrictions on builders as to the price, type, size, and number of houses that can be built. They can also restrict the number of investors that they are allowed to sell to. While this can feel annoying to buyers, it\u2019s ultimately in the buyer\u2019s best interest as it makes for a solid new community.<\/p>\n\n\n\n

Given that base price is generally non-negotiable, the key to lowering your overall price comes down to options and upgrades. These are the non-standard features the builders throw onto the base price of a house to get you to pay more for the home and net them a better profit. The margins on these are significantly higher than the house itself, and some of the most expensive ones tend to be elevations and lot premiums. Elevations are the outward appearance of the house and can add a significant cost to the overall price. Basic elevations tend to be more plain with the hopes that you\u2019ll pay more for a nicer \u201clook\u201d. The key to negotiation is knowing that while the builder may charge $15k for an elevation plan, in reality it costs them very little money to actually do it. It\u2019s the same with lot premiums. In aggregate, lot premiums do compensate builders for spacing houses out, which means less overall revenue from houses. However, on an individual sale (your sale), the lot premium is essentially a free cost to the builder.<\/p>\n\n\n\n

Spec-homes vs. To-be-builts<\/h4>\n\n\n\n

A spec-home is a pre-started (or finished) home that the builder built in advance of any order. They typically add several features, including pricier elevations, and are speculating (hence the word \u201cspec\u201d) that buyers will like not having to wait, enabling the builder to move product (and gain revenue) faster. Spec homes have higher negotiating potential because the builder is already invested in the home and every day it sits vacant it is costing them money. They therefore have an added incentive to sell it.<\/p>\n\n\n\n

To-be-builts are just that\u2026 you pick a lot, pick a plan, and pick your options and upgrades. In this case, the builder hasn\u2019t started yet, so they have no cash outlay they are waiting to recoup. That being said, buying a to-be-built is still money they wouldn\u2019t have received had you not bought in the first place, so they still do want to sell it to you. You don\u2019t get the added negotiation potential as you do with spec homes, but it is definitely still possible.<\/p>\n\n\n\n

Recommended negotiable features<\/h4>\n\n\n\n

I recommend negotiating features in this order, which give you the highest return with the lowest builder cost. If some are already included in the base price of the house, even better.<\/p>\n\n\n\n

  1. Lot premium<\/li>
  2. Elevation charge<\/li>
  3. Concrete pours – Patio pads, extra driveway, etc. Anything they can pour with the foundation costs them very little to do, but is an expensive upgrade for you<\/li>
  4. Lighting – Recessed lighting, decora switches, under cabinet lights, etc<\/li>
  5. Counter\/bathroom surfaces – Granite, quartz, etc<\/li>
  6. Wet-area configurations – Dual sinks, walk-in shower, tile, etc.<\/li>
  7. Flooring surfaces – Wood\/tile vs. carpet, etc<\/li>
  8. Covered patio<\/li>
  9. Fridge, washer, and dryer<\/li><\/ol>\n\n\n\n

    Negotiation strategy<\/h4>\n\n\n\n

    On a spec home, ask the builder\u2019s agent for the list of all installed options on the home, which typically range from 1-10% of the base price of the house. Offer the base price plus one small feature you actually care about. Tell the agent that you don\u2019t really want any of the other features and are happy to pick out a to-be-built without them. This shows good-faith that you aren\u2019t just trying to be cheap, but also shows them that you wouldn\u2019t have bought those features anyways, so there isn\u2019t wasted opportunity cost for them.<\/p>\n\n\n\n

    On a to-be-built, ask the builder\u2019s agent for the list of possible additional options and prices. Pick out a set you actually care about and order them as above. Offer the base price plus one feature you actually care about then add in your top additional options as no-charge. Again, this shows good-faith that you aren\u2019t just trying to be cheap, but also shows where you draw the line. I like to ask for 3, then be OK with 2. It\u2019s a delicate balance as you always want to ask for more than what you expect to get (it\u2019s a negotiation, remember), but you also want your offer to be respectable or it won\u2019t even be considered.<\/p>\n\n\n\n

    Lastly, I like to word my offers without a question. In other words, don\u2019t say: \u201cCan you take $xx off the price?\u201d. Instead, try wording your offers with actionable results. I like to say: \u201cIf you can do the following (and give them a list), then I will sign and deposit today\u201d. This way it\u2019s very clear\u2026 If they do something, then you do something. And as always\u2026 talk with your REALTOR\u00ae before signing anything. A good real estate agent will have experience in this and can even negotiate on your behalf.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Absolutely, but it\u2019s different than with re-sales. Most builders won\u2019t budge on base price, as it lowers the Average Selling Price (ASP) of the neighborhood, which can devalue the community. Most new communities have an HOA, which will oftentimes impose restrictions on builders as to the price, type, size, and number of houses that can […]<\/p>\n","protected":false},"author":1,"featured_media":230508,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[38],"tags":[],"acf":[],"yoast_head":"\nCan you negotiate with new construction? - Ten Properties<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can you negotiate with new construction? - Ten Properties\" \/>\n<meta property=\"og:description\" content=\"Absolutely, but it\u2019s different than with re-sales. Most builders won\u2019t budge on base price, as it lowers the Average Selling Price (ASP) of the neighborhood, which can devalue the community. Most new communities have an HOA, which will oftentimes impose restrictions on builders as to the price, type, size, and number of houses that can […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/\" \/>\n<meta property=\"og:site_name\" content=\"Ten Properties\" \/>\n<meta property=\"article:published_time\" content=\"2019-02-18T20:49:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-08-10T20:50:23+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tenproperties.com\/media\/Two-people-shaking-hands.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"500\" \/>\n\t<meta property=\"og:image:height\" content=\"858\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Brian Johnson\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Brian Johnson\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/\"},\"author\":{\"name\":\"Brian Johnson\",\"@id\":\"https:\/\/www.tenproperties.com\/#\/schema\/person\/117e3b06038e820cdfa1c3ca7dac83b3\"},\"headline\":\"Can you negotiate with new construction?\",\"datePublished\":\"2019-02-18T20:49:00+00:00\",\"dateModified\":\"2020-08-10T20:50:23+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/\"},\"wordCount\":889,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.tenproperties.com\/#organization\"},\"articleSection\":[\"Construction\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/\",\"url\":\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/\",\"name\":\"Can you negotiate with new construction? - Ten Properties\",\"isPartOf\":{\"@id\":\"https:\/\/www.tenproperties.com\/#website\"},\"datePublished\":\"2019-02-18T20:49:00+00:00\",\"dateModified\":\"2020-08-10T20:50:23+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.tenproperties.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Can you negotiate with new construction?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.tenproperties.com\/#website\",\"url\":\"https:\/\/www.tenproperties.com\/\",\"name\":\"Ten Properties\",\"description\":\"Build Your Ten\",\"publisher\":{\"@id\":\"https:\/\/www.tenproperties.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.tenproperties.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.tenproperties.com\/#organization\",\"name\":\"Ten Properties\",\"url\":\"https:\/\/www.tenproperties.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.tenproperties.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.tenproperties.com\/media\/Logo_CL_TS_NS.png\",\"contentUrl\":\"https:\/\/www.tenproperties.com\/media\/Logo_CL_TS_NS.png\",\"width\":2160,\"height\":905,\"caption\":\"Ten Properties\"},\"image\":{\"@id\":\"https:\/\/www.tenproperties.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.tenproperties.com\/#\/schema\/person\/117e3b06038e820cdfa1c3ca7dac83b3\",\"name\":\"Brian Johnson\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.tenproperties.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.tenproperties.com\/media\/Profile-Pic_WT_SQ-150x150.jpg\",\"contentUrl\":\"https:\/\/www.tenproperties.com\/media\/Profile-Pic_WT_SQ-150x150.jpg\",\"caption\":\"Brian Johnson\"},\"description\":\"Engineer, investor, REALTOR\u00ae, and Ten Properties owner, I help new investors use data to build their real estate empire. Connect with me today to start building your ten.\",\"url\":\"https:\/\/www.tenproperties.com\/blog\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Can you negotiate with new construction? - Ten Properties","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/","og_locale":"en_US","og_type":"article","og_title":"Can you negotiate with new construction? - Ten Properties","og_description":"Absolutely, but it\u2019s different than with re-sales. Most builders won\u2019t budge on base price, as it lowers the Average Selling Price (ASP) of the neighborhood, which can devalue the community. Most new communities have an HOA, which will oftentimes impose restrictions on builders as to the price, type, size, and number of houses that can […]","og_url":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/","og_site_name":"Ten Properties","article_published_time":"2019-02-18T20:49:00+00:00","article_modified_time":"2020-08-10T20:50:23+00:00","og_image":[{"width":500,"height":858,"url":"https:\/\/www.tenproperties.com\/media\/Two-people-shaking-hands.jpg","type":"image\/jpeg"}],"author":"Brian Johnson","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Brian Johnson","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/#article","isPartOf":{"@id":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/"},"author":{"name":"Brian Johnson","@id":"https:\/\/www.tenproperties.com\/#\/schema\/person\/117e3b06038e820cdfa1c3ca7dac83b3"},"headline":"Can you negotiate with new construction?","datePublished":"2019-02-18T20:49:00+00:00","dateModified":"2020-08-10T20:50:23+00:00","mainEntityOfPage":{"@id":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/"},"wordCount":889,"commentCount":0,"publisher":{"@id":"https:\/\/www.tenproperties.com\/#organization"},"articleSection":["Construction"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/","url":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/","name":"Can you negotiate with new construction? - Ten Properties","isPartOf":{"@id":"https:\/\/www.tenproperties.com\/#website"},"datePublished":"2019-02-18T20:49:00+00:00","dateModified":"2020-08-10T20:50:23+00:00","breadcrumb":{"@id":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.tenproperties.com\/blog\/can-you-negotiate-with-new-construction\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.tenproperties.com\/"},{"@type":"ListItem","position":2,"name":"Can you negotiate with new construction?"}]},{"@type":"WebSite","@id":"https:\/\/www.tenproperties.com\/#website","url":"https:\/\/www.tenproperties.com\/","name":"Ten Properties","description":"Build Your Ten","publisher":{"@id":"https:\/\/www.tenproperties.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.tenproperties.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.tenproperties.com\/#organization","name":"Ten Properties","url":"https:\/\/www.tenproperties.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.tenproperties.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.tenproperties.com\/media\/Logo_CL_TS_NS.png","contentUrl":"https:\/\/www.tenproperties.com\/media\/Logo_CL_TS_NS.png","width":2160,"height":905,"caption":"Ten Properties"},"image":{"@id":"https:\/\/www.tenproperties.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.tenproperties.com\/#\/schema\/person\/117e3b06038e820cdfa1c3ca7dac83b3","name":"Brian Johnson","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.tenproperties.com\/#\/schema\/person\/image\/","url":"https:\/\/www.tenproperties.com\/media\/Profile-Pic_WT_SQ-150x150.jpg","contentUrl":"https:\/\/www.tenproperties.com\/media\/Profile-Pic_WT_SQ-150x150.jpg","caption":"Brian Johnson"},"description":"Engineer, investor, REALTOR\u00ae, and Ten Properties owner, I help new investors use data to build their real estate empire. Connect with me today to start building your ten.","url":"https:\/\/www.tenproperties.com\/blog\/author\/admin\/"}]}},"_links":{"self":[{"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/posts\/230507"}],"collection":[{"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/comments?post=230507"}],"version-history":[{"count":0,"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/posts\/230507\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/media\/230508"}],"wp:attachment":[{"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/media?parent=230507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/categories?post=230507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tenproperties.com\/wp-json\/wp\/v2\/tags?post=230507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}