Need advice on negotiation experience with builder (Austin, Round Rock: mortgage, credit)

[kriegel]

I am going to buy a to-be-build house on Round Rock (Teravista).

The builder won't negotiate any base and site premium, but give an upgrade allowance of $20000 on a $350000 house. However, it's a must to use their mortgage company to get the allowance incentive.

Can anyone give me some advice on this deal ? How is your recent negotiation experience with the builder ?

Appreciate any help in advance.

[woodinvilleguy]

I'd recommend negotiating with a Realtor with experience working with builders. If you for one I can recommend mine but there are a lot out there that are good.

[kriegel]

Originally Posted by woodinvilleguy

I'd recommend negotiating with a Realtor with experience working with builders. If you for one I can recommend mine but there are a lot out there that are good.

Thanks a lot for the offer. I already have a realtor work with me.

[Mrs.JT]

If you can wait a little while until they begin to close out (if it's anytime soon) I think you'll have a little more leverage.

Our lot premium was waved, and we still received 20K allowance because we were building in a close out neighborhood.

Or...you can call the corporate office. We've had to "go up the food chain," as they so eloquently put it, several times to get what we wanted.

I also agree with the other poster. Your realtor should be able to haggle/wheel and deel for you.

[XLadylawX]

Before entering into ANY negotiations, ask for a detailed price list of all those upgrades. $20k can be wiped out with just a few choice upgrades. I got the price list for these items from the agent at the model home on a house we are looking at and I racked up $28k in upgrades on minimal stuff. I will show you my list so you can get an idea of what $28k looks like:

Greenbelt Lot-$10,000
Kitchen Island-$ 1,080
Covered Patio-$4,400-It's Texas for crying out loud.
Study Option-$750
Double Oven-$ 2,110 - I COOK!!!
Medicine Cab-$235 - Should be standard for hall bath but not.
Full Light Door-$515 - Frivolous upgrade?
Ceil. Fan FR-$140 - Should be standard
Full Rain Gutters-$1,300-Should be standard - This is criminal to pay extra for full gutters
FirePlace-$2,120-Will likely never use but essential for re-sale
Attic Stair-$210-Should be standard - This one steams me and we may forgo.
Under Counter Lights-$625-Once you have these you can never go back. Essential to me
Water Soft Plumb-$800- May never use but people around here demand them.
Elongated Commode/hall bath-$125
Flat Panel Conduit for TV-$190- Sorry, don't want to see the wires dangling from wall-mounted TV.
Home Theatre Wiring $415-I think in this modern era this should be standard or at least $300 cheaper
Cable in all bedrooms $225-Should be standard
Upgrade on Flooring & Tile-$3,000 (Estimate)

Some people will find my kitchen upgrades frivolous but in my opinion, the kitchen is the most important room in the house. Also, most living is done in this room.

Perhaps you can use part of the $20k in upgrades to upgrade the lot. This will however, eat up what you have leftover for the other stuff.

Good luck with your negotiations.

[kriegel]

Originally Posted by XLadylawX

Before entering into ANY negotiations, ask for a detailed price list of all those upgrades. $20k can be wiped out with just a few choice upgrades. I got the price list for these items from the agent at the model home on a house we are looking at and I racked up $28k in upgrades on minimal stuff. I will show you my list so you can get an idea of what $28k looks like:

...

Some people will find my kitchen upgrades frivolous but in my opinion, the kitchen is the most important room in the house. Also, most living is done in this room.

Perhaps you can use part of the $20k in upgrades to upgrade the lot. This will however, eat up what you have leftover for the other stuff.

Good luck with your negotiations.

Thanks for the reminder.

So is it normal to get all these upgrade free in this market ?

[austin-steve]

Originally Posted by kriegel

Thanks a lot for the offer. I already have a realtor work with me.

What did your Realtor tell you?

[XLadylawX]

Remember that the $20k you pay for upgrades is way less than what it will cost the builder to install especially since they do this upgrading by volume. The upgrade concession is a way to charge you more for the house. All the builders do it. I think if you stepped into any new home development, you would find that the builder's all include a concession. Whenever I see those advertising billboards that say things like "Houses from the $200's, I immediately think, "The house I would want would really be $299,999. ;-)

Make sure to take a look at the unsold inventory homes. Those homes often have way less upgrades than the models and you can get a REAL IDEA of what the home will be like. The changes are dramatic and oftentimes are a real letdown.

[Exiled Texan]

The key to any negotiation, is being willing to walk away. Know what you think is a fair price. Be patient. Silence is often the best negotiating tool.

This article has many salient points about the state of the market and mirrors my buying process in Central Austin.

Demanding Buyers Hinder the Housing Market - NYTimes.com

[austin-steve]

Originally Posted by Exiled Texan

The key to any negotiation, is being willing to walk away. Know what you think is a fair price. Be patient. Silence is often the best negotiating tool.

This article has many salient points about the state of the market and mirrors my buying process in Central Austin.

Demanding Buyers Hinder the Housing Market - NYTimes.com

I caught that article today. Very interesting. It shows how government interference in the market really backfires and messes things up. Thank god the incentives are done. Let's just hope Uncle Sam keeps his greasy fingers out of our business long enough for the market to settle out to wherever it needs to be.

I made a graph illustrating what the $8K buyer credit did to our Austin market in April/May. This shows the number of homes that went Pending. The green line is 2010. Thanks to our meddling government it's hard to predict the market now and advise buyers and sellers because we don't know how to properly account for and factor in the weirdness.