Buyer question: Can I negotiate price with the builder (new homes)?

(source: tips and tricks when buying a home)

Now we come to the tricky part for many new home buyers: negotiating with the builder. 

Can you? Yes.

Many  who purchase a new home are completely lost, signing anything and everything that is placed before them.

Just as with purchasing resale , when buying a new home everything is negotiable.  The problem with new homes, however, is that the builder is often tied into financing and labor and materials contracts so that he or she cannot really offer the flexibility that an owner of a resale can.

Typically when buying a new home, you are presented with a colorful and expensive-looking brochure that gives the floor plans of the various models that the builder is offering.  Along with these is usually a price schedule.  For Plan A the price is $185,000 until January 2, when the price goes up to $187,500.  For Plan B the price is $235,000.  For Plan C it's $268,000.  And so forth.

In addition, there are premiums for better lots as well as additional costs for upgrades, as described earlier.  Thus the prices are laid out in the same fashion  as they are in a grocery store.  You certainly can't bargain with the grocer over the price of a jar of mayonnaise.  How do you bargain with a builder over the price list for a new home?

TRAP--Don't Get Suckered 

It's important to understand that builders and developers like to create the impression that nothing is negotiable--either you take their price or you don't get the house.  That's part of the reason for the elaborate brochures.  The truth, however, is that builders are real estate sellers just like any other.  When builders need to get rid of homes, they will negotiate down to the bare bones, regardless of what the brochures say.

TIP:  The easiest way to negotiate  is to find a builder who already has houses up.  Builders pay a hefty finance charge each month that the houses remain unsold.  They are highly motivated to sell the property.