New Home Builder Broker Co-op Thread
- Thread starter usctrojancpa
- Start date
NEW -> Contingent Buyer Assistance Program
Swung buy the original 5 models today and have updated broker co-ops...things are definitely slowing down thereby doubling the co-op amounts.
Vivo - $33,000
Verdi - $37,000
Lago - $38,000
Como - $45,000
Terra - $50,000
If you want to buy, time to PM USCTrojan and get busy. All have plenty of inventory to choose from and Martin may be able to get some price cuts from IP!
Also am posting the current price sheets and site layouts to other OH3 threads - note that there are no view lots available for Vivo, Como and Terra.
Wow. Surely a sign of some slowdown here.
I would think the lowering prices strategy would be the last thing they would do. They will try doubling broker co-op, free upgrades, and free landscaping before lowering the prices. They will lower the price if the recession hits and the market tanks. But even if then, they would probably stop the constriction for couple years, then restart when the market seems to pick up again.
Mety you are dead on correct about new construction pricing especially with IP. They will do most of the things that you have mentioned but lower prices. Because, they know that, that will reserve for when the economy is in the shit tank and I mean a nasty recession. Remember that they will have alot more homes to sell and buildable lot to build, not a smart strategy to lower price. Give more incentives and give more options to make your house nice is what they will do.
When the economy hit recessions, the building of new homes will stop and they will sit tight on the inventory. During the crash of 08-09 new homes were selling with great options and incentives. Fewer new homes were built so pricing skid and halt not lowered.
If it's hard to sell them, they WILL lower prices. They did it in Greenwood.
We've seen brokers Co-ops being doubled already. Is Varenna offering free upgrades and landscaping? All those upgrades could save a buyer close to 100K. Washer and dryer 2K, subzero fridge 8-10K, window covering 10-13K, upgraded floor 25K, front and back yard 50-60k?
Exactamundo! Keep asking for more stuff. You might get the whole house remodeled at the same price. Or if you are willing to risk a bit, wait couple more months. They might actually start dropping the price or you can even negotiate the price. (I've seen it happened before.)
The less desirable lots which might come on later phases, depends on the tract, also get the price reduction so that's something to watch as well.
Yes, your agent has to physically be up there. I flew up to Folsom for one of my good clients to sign in at Lennar and Toll new home communities.
Thanks for the kind words sir. Yes, all of the builders have bumped up their broker co-op in 4Q....I have to go around and get all of the new broker co-ops and update this thread now. haha
The longer a lot sits unsold (aka a "quick move-in home") the more apt the builder will wheel and deal on credits.
USCTrojanCPA said:
Swung buy the original 5 models today and have updated broker co-ops...things are definitely slowing down thereby doubling the co-op amounts.
Vivo - $33,000
Verdi - $37,000
Lago - $38,000
Como - $45,000
Terra - $50,000
If you want to buy, time to PM USCTrojan and get busy. All have plenty of inventory to choose from and Martin may be able to get some price cuts from IP!
Also am posting the current price sheets and site layouts to other OH3 threads - note that there are no view lots available for Vivo, Como and Terra.
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meccos12 said:
Wow. Surely a sign of some slowdown here.
I would think the lowering prices strategy would be the last thing they would do. They will try doubling broker co-op, free upgrades, and free landscaping before lowering the prices. They will lower the price if the recession hits and the market tanks. But even if then, they would probably stop the constriction for couple years, then restart when the market seems to pick up again.
irvinebullhousing
Well-known member
Mety said:
Mety you are dead on correct about new construction pricing especially with IP. They will do most of the things that you have mentioned but lower prices. Because, they know that, that will reserve for when the economy is in the shit tank and I mean a nasty recession. Remember that they will have alot more homes to sell and buildable lot to build, not a smart strategy to lower price. Give more incentives and give more options to make your house nice is what they will do.
When the economy hit recessions, the building of new homes will stop and they will sit tight on the inventory. During the crash of 08-09 new homes were selling with great options and incentives. Fewer new homes were built so pricing skid and halt not lowered.
sgip
Well-known member
This is a very well informed group here, so this doesn't really apply to readers on TI.
Broker co-ops are a great way to hold the line on new home pricing. Prices do not appear to be softening, but they really are when the Agent gets $$$$ this quarter compared $ last quarter. A previous phase buyer might pick up a price sheet and see how flat pricing has been over the past months and most are satisfied they got a good deal. Newer buyers are also going to pay that full retail price, but also get an ocean of "free upgrades" (another price stabilizer) and their Agent will be well incentivized to bring in other buyers.
In the late 1980's I saw new home tract builders that lowered prices in each of their phase releases. About a dozen phase 1 and 2 buyers put large signs in their yard saying "I GOT SCREWED BY BUILDER XYZ" Funny to see, but it also made the environment nearly impossible to sell a single home in the lower priced phase. The builder community learned a hard lesson and thus the Agent incentive/"free upgrade" price preservation process.
My .02c
Broker co-ops are a great way to hold the line on new home pricing. Prices do not appear to be softening, but they really are when the Agent gets $$$$ this quarter compared $ last quarter. A previous phase buyer might pick up a price sheet and see how flat pricing has been over the past months and most are satisfied they got a good deal. Newer buyers are also going to pay that full retail price, but also get an ocean of "free upgrades" (another price stabilizer) and their Agent will be well incentivized to bring in other buyers.
In the late 1980's I saw new home tract builders that lowered prices in each of their phase releases. About a dozen phase 1 and 2 buyers put large signs in their yard saying "I GOT SCREWED BY BUILDER XYZ" Funny to see, but it also made the environment nearly impossible to sell a single home in the lower priced phase. The builder community learned a hard lesson and thus the Agent incentive/"free upgrade" price preservation process.
My .02c
Ready2Downsize
Well-known member
Mety said:
If it's hard to sell them, they WILL lower prices. They did it in Greenwood.
Mety said:
We've seen brokers Co-ops being doubled already. Is Varenna offering free upgrades and landscaping? All those upgrades could save a buyer close to 100K. Washer and dryer 2K, subzero fridge 8-10K, window covering 10-13K, upgraded floor 25K, front and back yard 50-60k?
Attachments
meccos12 said:
Exactamundo! Keep asking for more stuff. You might get the whole house remodeled at the same price. Or if you are willing to risk a bit, wait couple more months. They might actually start dropping the price or you can even negotiate the price. (I've seen it happened before.)
The less desirable lots which might come on later phases, depends on the tract, also get the price reduction so that's something to watch as well.
usctrojancpa
Well-known member
shadyoc said:
Yes, your agent has to physically be up there. I flew up to Folsom for one of my good clients to sign in at Lennar and Toll new home communities.
usctrojancpa
Well-known member
DrTravel said:
Thanks for the kind words sir. Yes, all of the builders have bumped up their broker co-op in 4Q....I have to go around and get all of the new broker co-ops and update this thread now. haha
usctrojancpa
Well-known member
Mety said:
The longer a lot sits unsold (aka a "quick move-in home") the more apt the builder will wheel and deal on credits.
sgip
Well-known member
Some builders aren't buying the rate down permanently - as Toll is doing (roughly 2-4 points depending on loan size at present). A few builders are offering 3-2-1 rate buy downs flashing a 2.875% 1 year rate, 3.875 in year 2, and 4.875% in year 3. The cost of a temporary buydown can be anywhere from 2-3 points as well. Let's assume 2 points on a $1m loan - which is $20,000!
If the builder doesn't reduce the price by $20k in lieu of the buydown, close, then refinance in 90 days. The $20,000 used to subsidize your monthly payment is held in an escrow account. Who gets that $20k when you refinance? Not the lender. Not the Builder. You are supposed to get it. In cash. Given property tax and other expenses, I'd push it all into an impound account, but that's just me.
My .02c
SGIP
If the builder doesn't reduce the price by $20k in lieu of the buydown, close, then refinance in 90 days. The $20,000 used to subsidize your monthly payment is held in an escrow account. Who gets that $20k when you refinance? Not the lender. Not the Builder. You are supposed to get it. In cash. Given property tax and other expenses, I'd push it all into an impound account, but that's just me.
My .02c
SGIP