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How to negotiate the price of a new Idaho home for sale

Main Idaho Real Estate Insights
When you are considering a new home for sale and try to negotiate for a better price remember these points.

Idaho HomesA home is something that rarely sells for the asking price. As a matter of fact, many people will not buy a home unless there is some negotiating on the price. Seems kind of backwards, you almost have to ask more for your house to get the price you want in the first place?

New homes are a different kind of purchase. First, It is being sold by an Idaho home building company. Secondly, it is being sold for profit, that is profit not capital gains! Thirdly, if the builder has a stake in the community, selling the home at a discount not only undercuts the value of previous home owners but also future home owners, including you. It also effects future profits for the builder because appraisers will see that the home is now worth less!

We do not want to say that you should not try to get the best price on a home, on the contrary, you work hard for your money. Also, it is true that the cost to build a home between builders can vary by thousands of dollars. A larger home builder is getting bulk discounts and is probably getting a better price on the lot as they are also buying in bulk on home building lots. Smaller home builders, on the other hand, are on the job continuously paying close attention to every detail.

A credible builder understand the value of the home before it goes up. They have already researched the market and understand what similar homes in the area are selling for. This is important to know for you as the buyer so you can compare home for sale.

A credible home builder is probably not going to negotiate on price as much as you would expect. Two years ago there were fewer buyers in the market and prices were much softer than they are today. Builders were much more motivated to sell a home fearing another buyer may not walk through the door for months.

Today, the new construction market is small but doing well with out of state buyers and they are offering cash. Today's home buyer is seeking value and willing to pay for it and builders are eager to meet their needs.

Interestingly enough, as competitive as it is still, good builders understand home buyers and the marketplace. They are definitely negotiating on price but in a much different way.

One of the first things they will do is offer to pay for closing costs. While this is still thousands of dollars, many do not see this as a sign of negotiating. As we mentioned earlier, the builder is less willing to negotiate on price in the market because it not only affects the previous home owners but it will also cut into future profits as appraisers now see that the "new" home value is your price. Even if they wanted to increase the price on the next prospective home buyer, the appraisal would not be able to justify it, if there were a bank involved for a home loan.

Tips to Negotiating the price of a new Idaho home for sale

If you like the floor plan and the Home Builder is not willing to negotiate on the price of that specific home, ask for the price of the exact home on a different lot or in a different community.

If it is a model home, request pricing for all the upgrades, like granite, garage extensions or upgrade landscaping to see what you could live without today.

One suggestion, so that you are not taken advantage of, is to hire an Idaho Real Estate Agent to be your buyer's representative. They make a commission on the sale but cost you nothing,(?) I say cost you nothing but builders clearly realize that some 3% of the deal is thousands of dollars. They are glad to pay it which is included as part of their marketing costs but if you approach them as an individual, it may allow for some negotiating flexibility. For example, they may not negotiate on price but willing to include more landscaping.

Another idea is to ask the builder to pay the HOA dues for a time period, or even utilites.

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Posted by tlangford at 11/28/2011 2:59:00 PM

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