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NEGOTIATING WITH BUILDERS
Now that you have chosen the builder, and you're ready to make an offer,
it's time to take a look at this phase of the transaction. Your Realtor
will help you to prepare the right offer and help you to examine what
terms should be included in your contract.
PREPARING YOUR OFFER
If you are building a home from scratch, most builders will not budge
much if at all on the price of the home and/or options. If you are placing
an offer on a builder's inventory home, the builder may accept a lower
offer, or may be willing to throw in some additional options.
Your offer should always be made according to what you
are willing to pay AND what you are able to pay. If your offer is accompanied
by a letter of pre-approval from your lender, it will improve its chances
of being accepted. Your offer should also include any contingencies or
conditions which you need met prior to signing the contract.
WRITING CONTINGENCIES OR CONDITIONS
Your real estate representative will play a very big role in this phase
of the transaction and they should be well versed in writing contracts
and dealing with contingencies. There a several contingencies which should
be included in your offer to buy:
- Financing
This contingency states that the contract is only valid if the
buyer is able to secure their home loan. If you have not been
pre-approved, this is a must-have term. This contingency can affect
whether or not the seller will accept your offer depending on
their feelings about your creditworthiness.
- Clear Title
Include terms that allow you to back out of the contract if there
are any problems with the property's title.
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You may have special circumstances or terms which
need to be part of your contract such as making the purchase contingent
on the sale of your home. These contingencies and others can all
be placed in the contract. Your Realtor will help you draft a contract
that protects your interests and accommodates your special circumstances.
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NOTE OF CAUTION: When you present an offer to
the builder, the builder has the right to accept, negotiate or
turn down your offer. The more terms and hoops they have to go
through to meet the contract requirements, the more likely it
is that the contract will not be accepted.
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NEGOTIATING THE RIGHT DEAL
When you choose a Realtor to represent you, you need to trust that
they will be there to represent your interests. Once you've made
your offer, you need to be accessible to your agent because the
builder may be willing to negotiate.
If the builder is willing to negotiate, offers and
counter-offers will go back and forth until an agreement is made
or either party walks away. By being available to your agent, you
can negotiate quickly. This is important because builders have the
right to accept offers from other potential buyers until there is
a signed contract in place. If the market is moving quickly and
the home you wish to buy is popular, you could lose the home to
someone else if you are not available for negotiation.
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