What’s the % deposit on new home upgrades? (Center: sale, appliances)

[ma23peas]

I’m an idiot. Let’s get that out of the way. When we selected a builder- I went to 6-7 and narrowed it down to two. Asked about deposits and such and one was 20% and one was 15%..but no, I ‘heard’ 15 but it was actually 50%. We have quite a bit of upgrades- we have already paid 10k, builder gave us 20k in incentives on upgrades.
I think I am being reasonable to ask that the 50% owed on upgrades be calculated AFTER the discount.
If I have 75k in upgrades, remove the 20k..and I should pay 50% on 55k... is that not reasonable? We are buying the new build before selling existing- so much of our cash is tied up in first house.
We can pay the 1/2 on 75k, but it would take us 3 months to pay it.. I don’t mind signing an agreement for three installments well before the house is finished. Is that reasonable? They put crap in houses today- our upgrades are mostly structural..something that needs to be done in framing stage- and upgrades appliances/flooring that are best installed by builder because it’s cost prohibitive to do it after..things like paint and ceiling fans- we’ll do ourselves...any experiences??

[RCH99]

Discuss with your builder. This is stuff that should be sorted out prior to executing the contract. Plenty of CD goobers will descend on this shortly with a myriad of idiotic commentary, but none of it will provide answers to your questions, nor dictate your builders policy regarding any of your issues.

A builder wants as much full pop monies on upgrades they can collect in order to mitigate any potential losses they may incur if you don’t end up closing, for whatever reason.

Edit to add that having a contingency in this situation negates your negotiating power significantly, as well.

[Samiamj]

David Weekley is 25% on upgrades selected from the Design Center. You get it back at closing.

[chris_ut]

The builder wants you to buy, they will work with you, those upgrades are pure profit for them.

[snackdog]

The most experienced builders will require you pay cash up front for upgrades to ensure they are not stuck with them if you don't go through with the deal. So be 100% sure you are happy with the builder and know what quality home they will construct.

[pc50]

Pure profit is not a true statement. Also the builder is not interested in being stuck with poor buyer decisions and then can’t sale the home. That is the reason for the deposit. People pick weird and personal things that may not translate to what the general buying public may want if they cancel the home contract. Each builder will require different deposits.

[a_guerrajr]

As long as the upgrades are not radical the builder should be pretty flexible.
Normally you agree on this % before you sign. I negotiated mine to 10% of the upgrades, but then again I went in and did 30K of upgrades of which 18K was builder incentive.

The objective here is for the builder not to be stuck with a spec home that Buyer A customized and now Buyer B, C, D... all hate the upgrades done by Buyer A. So the builder either has to take a loss or rip out and replace (still a loss). Your deposit is in the event you bail or can't close, they have some cushion built into the home to offset.

If you match their inventory options and really outfit it with easy to sell options you can fight to have this amended.

[dd1153]

Deposits are applied toward cash to close.. it’s not a profit for builders.
Most builders are 25-50% on design upgrades.

Some builders I’ve heard of $75,000 deposits being the norm.