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For New Home Builders, it's the End of their Fiscal Year - and The Fun Begins !

Every year... right about this time... just like clockwork... it happens.  No, I don't mean it's Cowboy's Time.  And NO, it's not yet time to turn your clocks back.  It is the time of year when several of the major New Home Builders in Tarrant County see the end of their Fiscal Year approaching... and let the word out that they will pretty much do just about anything to squeeze in "one more closing" before their fiscal time-clock runs out.

What will they do ?  Well, it all depends.  First, it depends on how many completed homes the builder has "sitting" at that time.  It also varies depending on the specific model or floorplan.  They may only have one or two of a floorplan that sells well, so in that case... they are less likely to negotiate, although many things are still possible.  They may replace carpet with tile, replace carpet with hardwood, upgrade appliances, or include a washer, dryer and refrigerator at no cost.

If the floorplan you happen to like is one that the builder has a pretty good "overstock" on... even more may be possible.

What kinds of things do Home Builders NOT like to negotiate on?  Pricing is probably the touchiest item for a builder when a buyer wants to negotiate.  And... there's a reason or that.  Let's say a home is listed for a certain price, perhaps $225,900.  The buyer wants the builder to drop the price, for example's sake, by $20,000.  Even if the builder were inclined to accept the buyer's offer, the main reason they would prefer to negotiate making other types of concessions is that reducing the price on any particular floorplan makes it all that much more difficult to get an appraisal for the NEXT home of that floorplan that sells.

In submitting an appraisal, appraisers must provide three "comparable" homes to substantiate the value of the home being appraised.  In a builder's case... those three homes should preferably of the same model, that have closed and funded within the last six months, and in that same subdivision.  This is the ideal... same floorplan, same subdivision.

In the future, when the builder is trying to get another appraisal on a different home of the same floorplan... if one of the only three available comparables (comps, we call them in real estate lingo) happens to be the one the builder dropped the price by $20,000... it can have a very negative effect on the new appraisal. 

So... if a buyer really insists on "making an offer"... the builder is much more inclined to include free options, appliance upgrades, install hardwood or ceramic tile at no charge, install Corian-type counter-tops at no-charge, pay closing costs and pre-paids, pay for an interest rate buy-down, give down payment assistance (such as paying the FHA 3% downpayment for the buyer), or other such concessions rather than lowering the price.

Also... sometimes some Realtors are hesitant to bring clients to New Home Builders... because the builders usually have their "own" contracts rather than use a standard Realtor contract.  But remember... you are much more likely to be in the "driver's seat" if your agent happens to have extensive experience working with New Home Builders.

I have seen this for the past seven years that I have been a Realtor in Tarrant County, and for the Nine previous years when I worked for several National New Home Builders here in Tarrant County.

It is unusual for a Realtor to also have had experience working for New Home Builders.  With that in mind, I give my "buyers" a real edge in their negotiations when purchasing their New Home from a Builder. 

It is such a great feeling for me to have helped so many families in the past accomplish what they had thought was the impossible.  Home Ownership... The American Dream.  This is one of the better times for me to make their New Home Dreams Come True.

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Please visit my website at www.NewHomeHuntersOfTarrantCounty.com .  You'll find much information that is not available anywhere else.  If you are in the market for a Brand New Home... NOW is the time to call me.  Karen Anne Stone... (817) 929-3400.  Wouldn't it be great to have your very own Secret Weapon ?

Comment balloon 11 commentsKaren Anne Stone • August 25 2007 01:57AM
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