Any real estate/builder insight out there?
My wife and I are looking at a house in Salisbury MD. We've talked to the builder rep all last weekend, and will again this tomorrow.
Here is the situation -
We've comped a recent sale (same builder and same house model), sold last month... a perfect comp!
That house was listed 299k and sold for 290k with 5k going to buyer for closing... so 285k total.
Builder wanted to base price our same model house at 309k.
Builder has dropped our base price to 287500 now (closer to the 285k recent sale... since that house had no upgrades)
Our upgrades total 27k (you know that's where his money is made from), BUT we are going along with it... just to make things a little smoother.
Problem is... the base of 287500 + 27k upgrades should be 314500!! Well the builder is now set at 330k total because he wants us to cover realtor fees! Something (that in any other normal sale) would be covered by the seller. 6-7k total.
Any ideas what to do??
2007-12-28 11:59:50 · 5 answers · asked by B-Rock 1 in Business & Finance ➔ Renting & Real Estate
sorry.... builder is not set at 330k... it is 320k
2007-12-28 12:11:33 · update #1
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Thanks Real Estate Guy!!
Currently we are going to rent our townhouse (bad market being the reason) so we have no contingencies!
This house was built and drywall up but left gutted, for a potential buyer to buy the specific upgrades.
We originally thought 310k for the house... currently should be at 314500... but the 6-7k realtor fees is making the situation worse.
You are right... they want to get that bottom line number as high as possible!
Thanks again!!
2007-12-28 12:26:47 · update #2
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tampabaycreditdoctor's --
Thanks for the post. We are not from the area and our realtor, back home, referred us to a realtor in the new area. We've looked at resale but don't really like anything... with the other new house it was a unique scenerio to have a finished house but allow you to pick your upgrades.
For whatever reason... we were never offered any money for closing or upgrades... no incentives at all.
2007-12-28 13:02:35 · update #3
say no way and walk. dont let them play that game they know you like the house so they are padding the deal. walk they will come back with a more reasonable offer.
I maen really walk though tell them you have found a better deal they will call you believe me!
when they counter ask for lower price and closing costs/ just like the last sale youl'll get it the agent is getting greedy.
dont get wrapped up in the emotion and you will get a better deal
2007-12-28 12:09:41 · answer #1 · answered by Al-padrino 3 · 2⤊ 0⤋
Realtor fees ARE covered by the builder. PERIOD.
If the base is now 287,500 (not just for you) and you have 27000 in options, the retail price should be $314,500. I would ask 25% off options and $5,000 in closing.
The problem you have is that you used a comp of a spec house. Builders are burning off specs because they cost money to carry.
If you are building a house, there is less room to play with.
I'm guessing this is a small builder and their margins are tight.
Who is the builder and what are the prices of the options you are taking. Depending on the builder, the profit margin on the options could be only 20% or as much as 100%. Some builders make their profits on the base, epecially if there are a lot of standards. Some builders, like Khov, Ryan, etc, have low base prices (and little standards) to get you in the door and they do make the money on the options.
If you are noncontingent on a home sale and the builder can build ASAP, then you are a PRIME buyer and can "demand" more. If you are a contingent buyer with a house to sell, then you have less power.
2007-12-28 12:17:11 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I would not do this deal. You come along keep the builder afloat few more days and few month's down the road they are selling your house for $260K. What realtor fees? Thought you were dealing with the builder rep? Too many builders out there to take a deal like this, my opinion. There is a reason it takes 3 comps for a valid appraisal. Can you comp your house out at $315K with 2 others?
2007-12-28 12:51:52 · answer #3 · answered by Anonymous · 0⤊ 0⤋
In case you haven't noticed, housing prices are not increasing. Most reputable builders are having "fire" sales just to unload some of their abundant inventory. Show the builder your comp and rational and if he balks, walk.
2007-12-28 12:08:42 · answer #4 · answered by Ro B 1 · 0⤊ 0⤋
You can try to negotiate further, or you can walk. It's pretty simple.
2007-12-28 12:08:52 · answer #5 · answered by acermill 7 · 0⤊ 0⤋