Builder negotiation advice needed.

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frebay_IHB

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I am currently in contract on a new 1m home that my family is absolutely in love with. Here's the story, it's a hilltop community with 2 streets, one lower street and a higher street with better views. In Jan of 07, I was in contract w/ the same floorplan on the lower street for 1.25m. Figuring the market would crash, I decided to pull out while the builder said homes on the higher street will be marketed at 1.5 to 1.6. Fast forward to last August, a few homes on the higher street were sold for 1.4m, then in Jan 08 some homes on the higher street were selling for 1.250m, and the home I am in contract in was listed for 1.3m. A couple weeks ago the builder reduced the home fom 1.3m to 1.18m and I lowballed them 900k and they came back at 1m. I figured it was a good deal, since i'm getting a better home and didn't lose 250k if I purchased last year, and my some of my neighbors are in the hole 400k. Good thing I didn't purchase last year! The week they lowered prices they sold all 5 of the remaining homes in the 1m range and I was the last home purchased, so I will close escrow last.



I then noticed that there was a home on the lower level, listed as a short sale for 920k, and the agent said a good starting point with the bank would be 850k, so I'm assuming it will close for 875k.



The fact that my family loves this home and we can see us living in it for the next 5-10 years means that I'm not going to back out unless there is some catastrophic price drop. I would like to see if anyone was able to use current trends to get a lower price from the builder. I'm due to close escrow early Sept, so I have time to see if that short sale property will move, but due to it's lower location the builder might not budge on price since they figure they can sell it to someone else.

How can I convince the builder to lower price AND sell to me?

Can I be in contract and be able to request a lower price?

Since I will be the last home will they be more inclined to reduce price and close the deal and take a risk and find another buyer?

Should I be content w/ my 1m price as my neighbors paid 400k more les than one year ago?



Thanks for all that reply!
 
If you can swing the 1M without hardships, go for it. Especially if you are going to be there 10 years.



Now, if you are going to have a hard time with the payments, then walk away from the deal and find something cheaper.
 
deposit is 20k.



i can afford the payments, and anticipate living there 5-10 years.



just want to make sure i'm getting the best possible deal, and when i was signing the contract there was 2 people behind me chomping at the bit to get the home so i couldn't negociate the way i had wanted to.
 
Frebay, check your contract. You may very well end up losing that $20K if you cancel the contract. Is it worth it to you? It might be - if you end up getting the place, your value will drop more than that $20K you lose if you walk.
 
I don't want to walk away from the house. I want to buy the house, but I want to see if I can wiggle in anymore discounts
 
[quote author="frebay" date=1214439132]I don't want to walk away from the house. I want to buy the house, but I want to see if I can wiggle in anymore discounts</blockquote>


How is your poker face?
 
[quote author="frebay" date=1214447692]poker face is no good!</blockquote>


Sounds fine. We need a fourth for this Friday night.



Seriously, if you've gone directly to the builder, that small print when you initially signed in and/or EULA when you logged into their website procludes you from working with a buyer's agent. You are on your own. If you're not willing to walk, it must be a good deal still in your mind (relative to the known alternatives). Think about it, talk with your spouse/loved ones about it, and act decisively. Don't lament the road not taken, whichever way you end up going.
 
I'll probably wait a couple more days and go to the builder. Maybe they will throw in a fridge or something. Those sub-z's are expensive!
 
[quote author="frebay" date=1214470802]I'll probably wait a couple more days and go to the builder. Maybe they will throw in a fridge or something. Those sub-z's are expensive!</blockquote>
Next time use a buyer's agent who'll kick you back a portion of his commission as there is little work to be done by the buyer's agent once the contract is signed. I'd bet if you hardballed the builder you can get some options throwin in (it's easier for them to include options rather than lowering the sales price).
 
[quote author="frebay" date=1214470802]I'll probably wait a couple more days and go to the builder. Maybe they will throw in a fridge or something. Those sub-z's are expensive!</blockquote>


You gotta be willing to walk away. Or pretend to. I live in Norcal but up here you can ask for, and get, a finished back yard, all appliances, no HOA/MR fees for 2 years, no property taxes for first year, no closing costs and sometime a Best Buy gift card for $5K or more.
 
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