When buying a new construction, what are my options for negotiating? The builder rep is saying his hands are tied on all fronts by management.

Where does the buyer’s agent commission come from?

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The real estate market is starting to see price reductions and especially, for new builds, additional incentives. For Austin, the new build market has definitely changed for the better for buyers. First, there’s abundant inventory. Second, be willing to walk away. Pay only what you’re willing or able to afford. Real estate takes time to run up and come down. Therefore, the question is are you flexible with your timeline? If so, Q3 and Q4 might be better as the inventory of homes will continue to increase due to higher interest rates.

Like any purchases, always be willing to walk away. Speaking from experience, buying a home is the biggest purchase (for most people). If you choose to get a real estate agent (don’t sign any contracts with them), have them pull the comp data for the last 4-5 years in the area you’re considering. Look at price/ft to determine if a house is a good buy or overpriced. Make the agent do the analysis for you as they need to earn their commission (paid by the new home builders).

You can always negotiate. Drive around the builder’s lots, sometimes they play games and put up sold/under contract signs. Also, check out how many spec homes there are. The build progress of the overall neighborhood, just started or 50% or more completed? Depending, some neighborhoods may take 5-10 years to finish, and if the market continues to worsen, there might be quite a bit of empty lots sitting. Are you okay with that? That’s a negotiation point and will make you be a more savvy buyer.

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What are you trying to negotiate?

Anything - lot premiums, design incentives, closing costs etc.

If your builder doesn’t pay a buyers agent commission, I guess that leaves you to pay the commission. Most builders do pay buyers commission.

Buyer shouldn’t be paying the buyers commission on new builds. Sometimes builders will offer a brokers co-op for the buyer side as a referral bonus. It comes from their marketing budget. And you can negotiate with your agent/broker to get a rebate back since it’s a minimal lift for them. It’ll be hard to negotiate price, although I’ve seen some houses with drastic price reductions (e.g. Lennar in SoCal) but these are determined and set by corporate. Best you can probably do is design credits/landscaping if they’re having a tough time selling.

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Also with new builders they don’t want to do anything to lower the appraised values because that can screw with other sales that have not yet closed. So they won’t lower the selling price. However you can often negotiate for free upgrades.

Get an agent who can give kickback, other than that it’s difficult to get anything out from builder. If you try too much you could may be get some design credits. What state are you in?

Sorry I don’t have any recommendations for an agent in Austin.

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