new construction upgrades - how to best negotiate? (flooring, how much, granite)
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Hi all, this is my first post here. My husband and I are buying a new construction home in NJ and plan to get a significant amount of upgrades. (We went to the development without a realtor and do not have the opton of having a buyer's agent represent us. )
From other people's experience, was it easier and/or better to negotiate a a credit at the design center or ask for a percentage off the amount we spend on upgrades? Many thanks for your help!
What upgrades do you want? Show around to find out how much the upgrades actually cost. When talking to the fokes at the design center dont tell them everything you want done at one time. Go in and tell them 1/2 of the things you want, and then from there negotiate a discount, then you can start adding things saying well if I do so and so, can I get a better rate and then go from there. This worked when we bought our kitchen appliance. I knew I wanted all 4 pieces but only asked for their best price on 3, then when I did the "what if I add a 4th", I was able to get an even larger discount on the whole package. So much so that the 4 item was basically free. And yes, the appliances were already on sale.
At the time of the initial contract, we negotiated for a credit at the design center... with the clause, that anything we didn't spend we could take of the purchase of the home.
House price was $232k... $18k in upgrades, but only used $6k... so net price of the home was $220k.
I don't know if that is possible if you have already signed the contract. As I say, we negotiated it BEFORE we signed the contract. From what I know, the price is fixed at the design center... but hey, you can try???
We were VERY stingy with the upgrades. One reason is that they are much more expensive at the design center than you could get outside. And options are fewer. For example, builder had only 4 choices of wood floors. When was the last time you went to a flooring store and had only 4 colors of wood to choose from?
Our upgrades were only things that would be harder to swap out later. For example... gas hookups in the kitchen.
I refused to upgrade flooring (cheap carpet is fine for a couple of years... at least it is NEW cheap carpet) or window blinds (can do that myself) Remember, you are putting this in a 30 year mortgage making that $20k in upgrades cost MUCH more.
Have you looked at a decked-out house built and last upgraded 30 years ago? How much of a premium would you pay today for that indoor atrium, wet bar, sky light, and emerald green counters with gold fixtures? Whatever you put in today (whether you pay the bloated design center price or not) you'll want to replace in 10 years or so anyways...
Choices on the open market are cheaper and more abundant than they are in the design center. Better to get them later.
You in Jersey? Call my pal Tony here, let him handle your negotiations for a nominal fee...
OK in all seriousness, first think about the question if you want to have the only house in this development with your upgrades. What is that going to do to your taxes?
If you decide to go ahead, if you are a little sidways with the deal, just tell the builder you want X, Y, and Z upgrades, and you are willing to pay whatever you are willing to pay, if not, thanks anyway, and walk. This assumes you have a good handle on what the upgrades will cost the builder to do, and/or how much value they will add to the house (2 independent calculations really)
Hi all, this is my first post here. My husband and I are buying a new construction home in NJ and plan to get a significant amount of upgrades. (We went to the development without a realtor and do not have the opton of having a buyer's agent represent us. )
From other people's experience, was it easier and/or better to negotiate a a credit at the design center or ask for a percentage off the amount we spend on upgrades? Many thanks for your help!
Pand in the not too distant past before the depression hit, there was no such thing as negotiation with builders. The price on the home and the upgrades was carved in granite and no persuasion could change the builders mind. If you did not want to pay his asking price then he would personally tell you to get the hell outta his model home because there were 10 more paying customers willing to pay.
Fast forward to today. Builders with inventory are giving away the fort just to unload their crap. I say crap because most of it is and will sit on the market. The quality inventory is sold but still sold with incentives.
Make your best deal. But I want to tell you how it works which may help you negotiate. The economy has changed but the way builders do business has not. You have the price of the house which includes all the standard features. You don't like the ugly tile the builder puts in the kitchen so you look at the upgrade boards and pick one out you do like and want. The design center tells you the price.
Here is how they determine the price:
Your upgraded tile will cost you $4000 extra. That means the builder already knows his preferred flooring contractor charges him $2000. The builder doubles what he charges the customer that number. Notice I never mentioned you get a credit for not buying the standard tile. It is never mentioned. The builder is making out pretty good so far huh?
Lets try it in another way in my business. You get standard oak flat panel cabinets. You hate oak and want maple. The builder tells you it will be $5000 more to upgrade to maple. Why? Because the builder already knows I charge him $2500 more to upgrade to maple. See a pattern? The builder doubles what their subcontractor charges them.
How to get around this.
DO NOT pay for stupid upgrades. A smart upgrade to pay for is pre wire for surround sound, pre plumb for laundry sink, central vac, finish the bonus room........things like that. Because these are items that would cost you a fortune to come back later and do because it requires tearing out walls.
Stupid upgrades include upgrading carpeting, any flooring, paint colors, lighting........things like that. Because you now already know that you can put that $4000 floor in for $2000 when you find your own contractor. There are sub contractors walking all over the job site. Talk to them. They will offer you a deal using their bosses buying discounts. They would kill for some side jobs. The builder gives you lights that cost 50 cents. Why pay the builder $100 for that light when some guy can sell and install fancy ones for $30 each?
Of course you might not want to be bothered and will pay the price for a red ribbon deal ready to move into. Just giving you the other option you have.
Getting the picture now in the short space I have to help?
Oh yea. Cabinets. It sometimes pays to pay the rape fee to upgrade. It's not like we can tear down the oak and offer maple and save you money. You can sometimes order cheap flat panel doors and later buy nice replacement doors the same color at less money then the upgrade was.
My wife and I are going through the same thing. I agree w/ DesertSun about paying now for things like pre-wire, pre-plumb, and other structural things. It would be too costly to come back after the stud walls are covered up and insulation evenly spread throughout the attic space, only to have some subcontractor cutting holes in your new wall and disturbing the insulation in the attic.
One thing we're doing with our lighting is asking them for a volume discount. We're doing close to 20 recessed lights in the house. At normally $125/ea, we're asking for a nice drop in price because we're doing so many in close proximity to one another (4 in the LR, 5 in the kitchen, for example). For the electrical stuff, it's hard for me to swallow those prices, since I used to wire houses when I was much younger. I know what's involved in that process, and that the materials might cost $40-45/ea including the housing, trim, wire, and bulbs. If they'd let me hang those myself, I'd totally do it, but I know they wouldn't put a warranty on my workmanship.
Re: the lack of a buyer's agent, I'm not sure how they would be able to assist you in the selection of upgrades in your house. Seems like that's a personal preference situation. Maybe a buyer's agent who specializes in new home construction would be useful, but that's outside what I normally do, so I don't know. Besides, depending on the type of builder (custom builder or volume builder), they're gonna have their pricing structure pretty much set. They may offer a certain allowance for upgrades at the design center, but as was mentioned, not much flexibility beyond that.
Good luck!
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