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And the Fun Begins... Builders and the End of Their Fiscal Years...

 It is the time of year when several of the major New Home Builders in the Fort Worth/Dallas area 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.

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.

This is the time New Home Builders are most anxious to reduce their "standing inventory."  I have seen this for the past eight 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.  It's Time for the "End Of The Fiscal Year" party to start.

Comment balloon 14 commentsKaren Anne Stone • July 26 2008 11:59PM

Comments

In my area, the foreclosure deals are much better than the new home offerings.  The new home communities are in for a tough year ahead... at least until next February or March.

Cameron

Posted by Cameron Novak, Featured Corona Real Estate Agent Team (The Homefinding Center) about 11 years ago

Karen, it sounds like you know the new builder home business in Tarrant County very well.  This is a good, informative post.  Good luck getting some of those homes matched with their buyers. 

Posted by Sondra Meyer:, See It. Experience It. Live It. (Star View Real Estate ) about 11 years ago

Karen Anne: Sounds like those builders there might be related somehow to some builders around here. There are many reasons why a buyer of even new homes should have their own agent.

Posted by Matt Grohe, Serving the metro since 2003 (RE/MAX Concepts) about 11 years ago

Cameron:  In Fort Worth, there just aren't all that many foreclosures.  There really aren't.  Sure... there are some... but those few sell quickly.  Many new home communities in the Greater Fort Worth area are doing very well.  Remember... Fort Worth is not Las Vegas, Phoenix, LA or Florida.  ALL real estate is local.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 11 years ago

Sondra:  It's just like anything else.  Whether it's porta-potties or new homes... having the expertise of an expert to get you the best "deal" is one of the most important aspects of buying a new home.  Some of the new homes I have posted about recently... the builders cannot keep them "in stock." 

Sure... there are many builder areas where sales are horrible... but those are often in neighborhoods where the builders either overpaid for the raw land when they bought it three years ago, or the made really dumb marketing decisions... and are now paying for it with a lack of sales.  But, then again... I know the new home market in DFW inside out and backwards... which puts me in a great position to help my buyers.  Sondra... thanks for your kind words... take care...

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 11 years ago

Matt:  I don't know much about the market in Des Moines, IA... but it sure sounds like you do !  If a buyer is trying to purchase a new home, and not using a Realtor who is a new home specialist... and hoping to save money... they are like little lambs walking around without a shepherd.  Not a good plan.  Thanks for sharing...

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 11 years ago

Gosh, I have had some great experiences with builders!  There are always 'wolves in sheeps clothing' no matter what vocation.  Your point is well taken however. 

Posted by Susie Blackmon, Ocala, Horses, Western Wear, Horse Farms, Marketing about 11 years ago

Hello Karen.  I just helped my family members work a builder's contract.  His contract included addendums.  We also included an addendum to obtain all that we wanted.

Posted by Robert Monk, Florida Real Estate (100% Realty, Inc.) about 11 years ago

My sister has said similar things about the builders in Dallas.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 11 years ago

The builders in our area have reduced the prices on some homes and are willing to negotiate.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) about 11 years ago

Susie:  Of course, all builders are different.  Some bad ones, but I think mostly reputable ones.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 11 years ago

Robert:  All builder's contracts have addendums.  The longest contract I have seen is the one Lennar uses.  By my last count... I think it was like 42 pages long.  An addendum for just about everything... including one holding Lennar harmless if the subdivision is near an airport, and an engine falls off the plane and hits the house.  That is actually a real, live addendum in the Lennar DFW contract.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 11 years ago

Christine:  I think the great majority of builders in the Fort Worth/Dallas area are very reputable.  But... sales are way down for them. and the great majority of them will do just about whatever it takes to make a sale happen.  But, just that alone makes it all that much tougher for the sellers of resale homes.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 11 years ago

Gita:  Of course it all depends on the builder... but I think in general, that is true.  And then... once you approach either the end of a quarter, or even the end of their fiscal year... even more is possible.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) about 11 years ago

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