# Tips on Buying Brand New Quick Possession Home from a Builder



## jmbagsy (Mar 14, 2017)

So we hired our own realtor and visited a quick possession duplex home listed at 349,900 from a builder. Some said that builders are usually firm on the list price and compromise on upgrades in terms of negotiations.

Any tips on how we can utilize our realtor to make sure we make a good deal on it? Or was it a bad idea to get a realtor in the first place and just go directly to the builder for negotiating? Thanks in advance!


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## kcowan (Jul 1, 2010)

You have engaged a buyers agent. If you are not contractually engaged, beware that they can claim their fee on any purchase you make even without them for 90 days.

As to what is best, I would go for the initial savings and recognize that some of that will be repaid in higher customization fees. Even if all of the savings get repaid that way, you are no worse off.


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## Mortgage u/w (Feb 6, 2014)

If you have not signed any agreements with the realtor, I would have gone directly and negotiated directly with the builder. Some negotiate, some don't. 
All your agent is doing for you is making your wallet lighter.


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## jmbagsy (Mar 14, 2017)

kcowan said:


> You have engaged a buyers agent. If you are not contractually engaged, beware that they can claim their fee on any purchase you make even without them for 90 days.


No, i haven't signed anything yet. I didn't know they are still entitled for that within 90 days even without paper signing with him.



kcowan said:


> As to what is best, I would go for the initial savings and recognize that some of that will be repaid in higher customization fees. Even if all of the savings get repaid that way, you are no worse off.


What do you mean by initial savings?


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## jmbagsy (Mar 14, 2017)

Mortgage u/w said:


> If you have not signed any agreements with the realtor, I would have gone directly and negotiated directly with the builder. Some negotiate, some don't.
> All your agent is doing for you is making your wallet lighter.


I havent signed anything yet. Most builders now wont let you see houses without representation, they'll give you a realtor working for them that is why I get a realtor I know who's gonna work for me and not for the builder.


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## kcowan (Jul 1, 2010)

jmbagsy said:


> What do you mean by initial savings?


You are in Alberta. Asking price is just a suggestion. Negotiate hard and then take your lumps on any upgrades.


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## AltaRed (Jun 8, 2009)

My experience with new builds is the builder will not negotiate on base price but will be willing to add extras in for that base price. The reason for not moving on base price is that if word gets out the builder dropped base price, then everyone else who has already bought at base price would be livid.

If some finishings are not yet done, it is easy at this point to throw in higher quality finishings such as flooring, appliances, bathroom fixtures on a cost effective basis.


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## Mortgage u/w (Feb 6, 2014)

jmbagsy said:


> I havent signed anything yet. Most builders now wont let you see houses without representation, they'll give you a realtor working for them that is why I get a realtor I know who's gonna work for me and not for the builder.


Personally, I think you'd be at a disadvantage hiring your own realtor when the builder provides one. Now you involved 2 realtors who need to make a living. As much as your realtor will work for you, he's also working for food on his table so he won't be as harsh as you would for negotiations. The builder will stick to his price since his realtor's commission is already factored in. The realtor you hired will want his cut too so if you manage to squeeze something out of the builder, your more than likely handing it over to your realtor.


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## jmbagsy (Mar 14, 2017)

kcowan said:


> You are in Alberta. Asking price is just a suggestion. Negotiate hard and then take your lumps on any upgrades.


I think AltaRed answers this one below



AltaRed said:


> My experience with new builds is the builder will not negotiate on base price but will be willing to add extras in for that base price. The reason for not moving on base price is that if word gets out the builder dropped base price, then everyone else who has already bought at base price would be livid.


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## jmbagsy (Mar 14, 2017)

AltaRed said:


> If some finishings are not yet done, it is easy at this point to throw in higher quality finishings such as flooring, appliances, bathroom fixtures on a cost effective basis.


So kind of update, we tried to tell our realtor if he could try to negotiate to include (for free) the following on the base price:

> upgrade appliances to a stainless steel one
> include washer and dryer (they are not included in the list of appliances included, I don't know why)
> build a deck and do landscaping at the backyard (fencing, front landscaping included already)
> Also, builder says they want to get the rebate we would be getting as a first time home buyer. Thinking of making them waive that one.


My realtor got back to me after talking to the sales rep stating they want additional prices for everything I asked for. (Doesn't seem like a deal for me given they are firm on their listed price)

So my question is, was it too much to ask all of it from the builder? 

If you guys have any better suggestion on how to negotiate with them so that I won't appear as to low balling them in the face, that would be so much appreciated. Thanks in advance!


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## jmbagsy (Mar 14, 2017)

Mortgage u/w said:


> Personally, I think you'd be at a disadvantage hiring your own realtor when the builder provides one. Now you involved 2 realtors who need to make a living. As much as your realtor will work for you, he's also working for food on his table so he won't be as harsh as you would for negotiations. The builder will stick to his price since his realtor's commission is already factored in. The realtor you hired will want his cut too so if you manage to squeeze something out of the builder, your more than likely handing it over to your realtor.


Maybe the reason why they won't let me get what I'm asking for from them for free as mentioned above.


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## kcowan (Jul 1, 2010)

We are in the midst of that situation right now. We got $200k off the purchase price and are now negotiating the upgrades. Initial offer is $24.3k. We'll let you know.


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## Longtimeago (Aug 8, 2018)

There are no rules when buying direct from a builder, with or without your own agent. Each builder is free to do as he pleases obviously in terms of what they are willing to negotiate or not.

Presenting a list of add-ons you want included for no additional cost is sometimes possible, with a builder then accepting or rejecting some. In your case, you have tried that and the builder's rep has refused them all. So what does that tell you?

Does the builder have more buyer's than houses to sell? A seller's market in other words? 
Is the house completed in which case making the changes now will add additional costs for the builder? ie. If there is an existing white fridge and you are asking for a s/s fridge, what will the builder do with the existing white one?
How many houses does the builder have for sale and are they in a typical subdivision street? ie. you ask for a deck and landscaping which would be visible to the neighbours around you who didn't get that included.

My advice is to tell your agent that you want the builder's agent told you are a serious cash buyer who is prepared to buy today. You are prepared to write a cheque today for the full asking price IF the builder will sweeten the pot somewhat. Tell your agent to ask the builder's agent to get back to you with what the builder is WILLING to add in for an immediate closing.

As for realtor cost, I don't know about Alberta but in Ontario that is basically fixed regardless of how many agents are involved. It's just a question of how many split the pie. ie. standard 6% commission goes 3% to selling agent and 3% to buyer's agent. If one agent does both ends that agent gets 6%. The builder has that 6% factored in regardless. The selling agent is required by LAW to present all WRITTEN offers to the builder. That means while the selling agent would prefer to get the whole 6%, the agent cannot take it on themself to refuse your offer.

Which begs the question, did you actually make an OFFER, in writing?


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## sags (May 15, 2010)

Unless there is a severe downturn in a local housing market and a builder has overbuilt and is stuck with a bunch of homes already built or in construction, there is no incentive for them to discount the price or give away any "upgrades" to a buyer.

Simply put.....why would a builder sell the home to one buyer for a discount when they could sell it to a different buyer for full price ?

It sounds to me like the builder doesn't care if the OP buys the home or not.


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## jmbagsy (Mar 14, 2017)

jmbagsy said:


> So kind of update, we tried to tell our realtor if he could try to negotiate to include (for free) the following on the base price:
> 
> > upgrade appliances to a stainless steel one
> > include washer and dryer (they are not included in the list of appliances included, I don't know why)
> ...


UPDATE:

So what my realtor actually did was asked for the equivalent prices for the upgrades I mentioned above. Our offer in writing was 345,000 plus all of those mentioned above.
>>After 2 days, the builder counter offer with same listed price (349,900) but gave the washer & dryer for free and free upgrade to stainless steel appliances. We will have to pay full price for deck and backyard landscaping if we wanted it.
>> I asked my realtor to counter offer again to squeeze in a little more value, I told him to include the deck for half a price they were asking. My realtor said it was worth mentioning and not a bad counter offer since we are not asking anything again for free.

This is what the house looks like by the way...

https://www.realtor.ca/real-estate/...duplex-30-gladstone-bn-spruce-grove-greenbury


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## Prairie Guy (Oct 30, 2018)

Do you have any DIY skills? Building a deck is easy, and anyone can lay sod.


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## nobleea (Oct 11, 2013)

the backyard landscaping is not costing them much. final grade and sod is maybe $1/SF, installed. You said fencing is already included.
For a deck without the railings (not required as it looks to be 24" or less off grade) is going to cost them $1500 or so. The washer/dryer will cost them 1600. upgrading the stainless, maybe 500 at most.
What rebate are they talking about for first time home buyer? There's a tax credit one on your income taxes, but I don't see how they can 'get' that.
They'd be eligible for the new housing GST rebate, but that is usually assigned to the builder anyways.
Is GST included in their asking price?

your offer of 345K with all the things you're asking for does not seem like a big ask.


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## jmbagsy (Mar 14, 2017)

Prairie Guy said:


> Do you have any DIY skills? Building a deck is easy, and anyone can lay sod.


Zero DIY skills unfortunately for building the deck. The sod, I agree with you, I can do it myself.


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## jmbagsy (Mar 14, 2017)

nobleea said:


> the backyard landscaping is not costing them much. final grade and sod is maybe $1/SF, installed. You said fencing is already included.
> For a deck without the railings (not required as it looks to be 24" or less off grade) is going to cost them $1500 or so.


They are charging 3,700$ for the deck with privacy wall and railing.



nobleea said:


> What rebate are they talking about for first time home buyer? There's a tax credit one on your income taxes, but I don't see how they can 'get' that.
> They'd be eligible for the new housing GST rebate, but that is usually assigned to the builder anyways.
> Is GST included in their asking price?


GST inlcuded in the asking price. And I think you are right, it must be the new housing GST rebate.



nobleea said:


> your offer of 345K with all the things you're asking for does not seem like a big ask.


When we spoke to area sales manager, she said they've already cut off their original listed price twice, (20k and 15k) a total of 35k less than the original listed price (I don't know if this is true, maybe I can ask my realtor to confirm it?) and since then, the same units has been selling fast. They are now down to 2 units including ours. Maybe that is why they want to stand with their current listed price.


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## jmbagsy (Mar 14, 2017)

UPDATE

They agreed to my counter offer of doing the deck for 50% of what they are charging, plus dryer and washer, plus upgrade to stainless steel appliance. same listed price at 349,900


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