Making an offer on a pre-sale home in Olympia WA is one thing – but here are some tips that can help get your offer accepted the first-time around.
As a new construction buyer’s agent, here are my biggest insider’s tips:
Builders are more willing to give you “stuff” than budge on the price. Builders are trying to maintain prices in their subdivision and therefore usually will not negotiate on the listing price on a pre-sale home. But you can still get a great deal by asking for “stuff.” Ask for upgrades such as a refrigerator, A/C, upgraded hard surfaces such as hardwood instead of laminate flooring, upgraded carpet, upgraded countertops, etc.
Builders are also more willing to give you “stuff” than pay for your closing costs. If you need the builder to pay for your closing costs, be prepared that the builder may not be so generous in giving you free upgrades, or as many upgrades.
The reason is builders can get discounts on many of the materials they use. It is more economical for the builder to offer you a refrigerator that he was able to get at a discount than to pay $1,000 towards your closing costs. That stainless steel refrigerator may have only cost him $800. But you could not go out and buy a matching stainless steel refrigerator for $800 yourself – it would cost more. In this example, the refrigerator is more economical for both parties.
Builders are more willing to negotiate even more on existing homes than on pre-sales. If there is an existing model you home like, you may be able to negotiate more on price, closing costs, and in some cases, changes to the home. For example, you may want the hardwood floors extended to the family room, but the carpet has already been installed. To liquidate existing inventory, the builder may be willing to do that upgrade for you, but you need to ask. This leads me to my next point….
Ask, ask, ask (but keep yourself in reality). As a buyer’s agent, I recommend that you ask for everything that you’d like but just keep your expectations grounded in reality. If you are asking for 10% in free upgrades, you most likely will not get that. Builders have their margins. If you can keep your offer between 1% to 3% of the listing price in combined incentives and upgrades, you will have a better chance of getting an accepted offer versus a rejected offer.
Get pre-approved but also if the builder has a preferred lender, get pre-approved with them as well. Builders, like all sellers, are nervous. If the lender they have worked with extensively says you are approved as a buyer, then the builder will be more likely to negotiate in your favor. You don’t need to use the builder’s preferred lender, but at least show that you are qualified with the preferred lender. It will help in your negotiations. Also some preferred lenders will offer you their own incentives for getting a loan through them. Shop for loans (on the same day) to compare and decide which lender will work best for your situation.
Make sure you know what comes with the property. Make sure you understand what is included for the list price and what isn’t. For example, one of my pet peeves in new construction is the builder will not include a garage door opener motor. You have a garage and it is wired for an opener but the unit itself is not included. See my article on 10 items you need to know if it is standard or an upgrade.
Have your own buyer’s real estate agent. Although the listing agents are very knowledgeable, keep in mind that they represent the builder. They may not be as forthcoming with options such as the garage door opener example above. Your buyer’s agent can ask the right questions and help you get the new home of your dreams!
To read more about pre-sales, check out my article on what is a pre-sale home and how do I buy one.
If you have any questions about buying new construction or a pre-sale in Olympia, WA, I’m here to help. I am a buyer’s agent and specialize in new construction.