Negotiating the price on new homes

It can be difficult to negotiate the sales price with a developer because they may claim their prices are based on fixed construction costs. But it doesn't hurt to try.

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Experts say builders more likely to be flexible on price at the very beginning and the very end of a development project. Early on, most developers want to move people in quickly so the project picks up momentum. Later, developers may be more inclined to accept lower offers when only a few units remain.

If negotiating the price doesn't work, buyers commonly negotiate for better amenities (upgrade carpet, light fixtures, etc.) or lot location. Experts say a developer will rarely pass up a deal over a couple hundred dollars' worth of carpeting, for example.

Do builders give financing?

Builders often include financing programs to help move more buyers into a project early on. If it's a buyer's market in your area, you can be sure that developers will offer incentives such as low-down-payment financing.

Should I hire a home inspector for a new home?

Most experts recommend having a home inspected, new or old. For new home, ask the builder to provide copies of any inspection reports on the property, architectural plans, surveys and pertinent construction documents for your inspector to review. Your inspector should either be a professional home inspector, an engineer, an architect or a contractor.

If you hire a professional inspector, look for one who belongs to one of the home inspection trade organizations. The American Society of Home Inspectors (ASHI) has developed formal inspection guidelines and a professional code of ethics for its members. Membership to ASHI is not automatic; proven field experience and technical knowledge about structures and their various systems and appliances are a prerequisite.

Rates for the service vary greatly. Many inspectors charge about $400, but costs go up with the scope of the inspection.

Do you need an agent for a new home?

Buyers concerned about costs should be aware of the differences inherent in working with sales agents who are employed by the developer, rather than traditional real estate agents. Most developers hire a staff of sales agents to handle their properties and will not pay an outside agent's commission.

Builders commonly require that an agent be present, and sign in, the first time a prospective purchaser visits a site before payment of commission even is discussed. At times when buyers use an advertisement to find the development themselves first, builders can refuse to pay any commission regardless of how helpful an agent may become later in the process. It is advisable to call the development first and inquire about their policy on compensating real estate agents if you are considering using one.

People who need assistance in shopping for new homes may want to retain an attorney or hire a buyer's agent for a flat fee to review the paperwork and help negotiate with sales agents.

Where can I get a list of home builders?

For a list of home builders, contact the National Association of Home Builders at 201 15th St., N.W., Washington, DC 20005; (202) 822-0200, or your local Building Industry Association office. 

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