New Construction: List price vs Actual sale price?

Question

I've noticed a few things while house shopping for new construction homes. Often times, the builder would list prices in ads for less than what they actually try to sell them for when you visit the sales office. eg. Ad says, "starting at 399k," but when you visit the office, they don't have any in that price range are are usually 40-50k more.

Then doing some research, I found the county's government website which lists prices that the homes were sold for and they all appear to be much less than the "initial" asking price. Prices were actually closer to the ones listed in the ads.

Is this common practice for builders... bump up the price and negotiate down?

Any comments welcomed... Thanks

Answer 1

Yes, but each builder is different.

Answer 2

I've purchased new construction homes twice, in 2002 and 2003. What I've found most often is that the starting price is for a barebones construction. Once you start adding the upgrades, the price shoots up, by around $40-50k, as you said.

The final sale price did _not_ go down, however. At that time negotiating a price would only get you laughed out the door, esp when there were other families looking at the lot you're considering and were willing to pay the price. Don't know if that has changed, but builders are more willing to throw in free upgrades to make a sale, rather than lower a price. Unless you happen to know the model that is sold at a particular location, that lower price may happen to be one of the lower priced models.