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Buying New Home Construction link
LOS ANGELES — Homebuilders are eager to rack up sales this spring, and many are offering incentives and even some price reductions.
So how best to find a good deal on a new home?
While homeowners looking to sell their property might balk at an offer that is too low and pull their home off the market, homebuilders have money invested in land and construction costs and can’t afford to just sit on the homes they build.
With a little research, anyone considering purchasing a new construction home can improve their chances of negotiating a better deal, said Michael Corbett, real estate expert and author of “Before You Buy! The Homebuyer’s Handbook for Today’s Market.”
When considering an already-built home, Corbett suggested buyers find out how long ago the home was built and how many residents are living in the development.
“The bigger the inventory, the more leverage you’re going to have,” he said. “The longer it has been on the market, the more leverage.”
Another essential step is to check the price at which comparable homes in the development sold, but ignore transactions that are more than 60 days old.
It also is important not to put too much stock in the price of other, similar homes in the development that have yet to sell — an argument one might hear from a builder’s sales representative.
“A house is only worth what it’s going to sell for, so don’t be bamboozled by a higher price on the properties that are sitting there,” Corbett said.
To structure an initial offer on a new construction home, one must weigh the recent comparable home prices, how many homes are left to be sold in the development and how long the home has been unsold.
But definitely make an offer that is below the asking price, Corbett said.
“Some buyers are timid; they don’t want to insult anyone,” he said. “In today’s market, go in a little bit lower. Unless you do, you’re never going to hit the middle ground you want to hit.”
It’s hard to say how much lower, but Corbett offered an example:
If the house is listed at $400,000, try going in at $375,000.
However, if recent comparable sales at the development have gone for $350,000, for example, then the buyer should make an offer at that level or below.
And if the development has 30 empty houses, that’s a good indicator the bid should go even lower.
“You really negotiate three times,” Corbett said. “When you make the offer, a counteroffer and after the inspection.”