New construction purchase – questions on so many things

[amy]

After renting in Carlsbad for over a year, my husband & I are getting closer to purchasing a home here. Please do not slam us for this – we have three young children and plan on being in this house for a long time. We are well aware of the reality of the market and the possibility (probability) that real estate value will continue to fall. We will not make an offer unless we have weighed all the pros & cons (including the financial) and are comfortable with the balance.

We have looked extensively at existing & resale homes, and think we can get a decent deal with new home construcion. We like models built by Shea in La Costa Ridge & Davidson in La Costa Greens. Both homes are 3500+ sf with better-than-average sized yards for the kids and within walking distance of the elementary schools where our children will eventually go.

I’ve gone through old posts on this site and have learned NOT TO FLOAT THE RATE, but would appreciate any other tidbits of advice (other than not to buy) that you all have.

My questions are:
* What kind of deals are you Piggs seeing with builders? Is it realistic to think we can get 10% off the listed price? If not that, then what should we aim for?
* As far as incentives, are builders covering/waiving HOA and/or Mello-Roos? If so, what’s a reasonable period of time to ask for? Will they credit/pay for landscaping? I’m looking for more than the usual upgrades for incentives.
* What should we be careful of? We have never built a house, just bought resales.
* I’ve looked online, but can’t find anything about the two builders’ security…so many builders have gone bankrupt or pulled out of developments – there are three just within a 5 mile radius of here. Are Shae & Davidson stable?
* I have two friends who are also seriously considering buying in these developments…do you think we would could get more of a price reduction if we went in together and “bought in bulk”? Have you ever seen this done?

These questions may seem simple to many of you, but I appreciate your insight & advice. I have learned a lot from this site, and it’s a major reason why we’ve waited this long to buy (and may still continue to wait if we can’t negiotiate a good deal on either of these homes).

thank you!

[SD Realtor]

Hi Amy –

Good luck on your purchase. I have not had much luck working out price reductions with the builders I have represented my buyers for. In some cases we were able to get some very minor cost reductions but any more substantial concessions came in the form of incentives and even then not much.

My advice to you is to try every trick in the book to get some money out of them. Walking in with a group of people and getting a few purchases is a great idea. Asking for MR or HOA costs is also a great idea. Ask for any and as much as you can. Will the builder accept? Maybe and maybe not but it doesn’t hurt to try. Your best leverage would be leverage you develop over time. The more guts you have to look the sales lady in the eye and make a demand and walk away if they don’t meet your demand, then the more you may get in the long run if you are in it for the long run. That is, you can accept walking away and then coming back a few months later.

The bottom line is that for the builders, the last thing they will do is lower the sales price. They will much rather give incentives, upgrades because the cost for them is much less then they give back to you right? They may claim they are giving you 50k in incentives or upgrades when in reality it may cost them 40-60% of that in materials in labor… but what can you do. Also getting credit for MR and HOA is fantastic. Get your realtor to kick you back a rebate of some of thier commission as well to you and make sure your realtor is with you if you go to the sales office for the first time to register. If you don’t have a realtor then ask the builder to give you the commission they would pay your realtor in the form of an HOA or Mello Roos prepayment or something like that. They may punt on that but if you don’t ask you don’t know.

SD Realtor

[SD Realtor]

Hi Amy –

Good luck on your purchase. I have not had much luck working out price reductions with the builders I have represented my buyers for. In some cases we were able to get some very minor cost reductions but any more substantial concessions came in the form of incentives and even then not much.

My advice to you is to try every trick in the book to get some money out of them. Walking in with a group of people and getting a few purchases is a great idea. Asking for MR or HOA costs is also a great idea. Ask for any and as much as you can. Will the builder accept? Maybe and maybe not but it doesn’t hurt to try. Your best leverage would be leverage you develop over time. The more guts you have to look the sales lady in the eye and make a demand and walk away if they don’t meet your demand, then the more you may get in the long run if you are in it for the long run. That is, you can accept walking away and then coming back a few months later.

The bottom line is that for the builders, the last thing they will do is lower the sales price. They will much rather give incentives, upgrades because the cost for them is much less then they give back to you right? They may claim they are giving you 50k in incentives or upgrades when in reality it may cost them 40-60% of that in materials in labor… but what can you do. Also getting credit for MR and HOA is fantastic. Get your realtor to kick you back a rebate of some of thier commission as well to you and make sure your realtor is with you if you go to the sales office for the first time to register. If you don’t have a realtor then ask the builder to give you the commission they would pay your realtor in the form of an HOA or Mello Roos prepayment or something like that. They may punt on that but if you don’t ask you don’t know.

SD Realtor

[SD Realtor]

Hi Amy –

Good luck on your purchase. I have not had much luck working out price reductions with the builders I have represented my buyers for. In some cases we were able to get some very minor cost reductions but any more substantial concessions came in the form of incentives and even then not much.

My advice to you is to try every trick in the book to get some money out of them. Walking in with a group of people and getting a few purchases is a great idea. Asking for MR or HOA costs is also a great idea. Ask for any and as much as you can. Will the builder accept? Maybe and maybe not but it doesn’t hurt to try. Your best leverage would be leverage you develop over time. The more guts you have to look the sales lady in the eye and make a demand and walk away if they don’t meet your demand, then the more you may get in the long run if you are in it for the long run. That is, you can accept walking away and then coming back a few months later.

The bottom line is that for the builders, the last thing they will do is lower the sales price. They will much rather give incentives, upgrades because the cost for them is much less then they give back to you right? They may claim they are giving you 50k in incentives or upgrades when in reality it may cost them 40-60% of that in materials in labor… but what can you do. Also getting credit for MR and HOA is fantastic. Get your realtor to kick you back a rebate of some of thier commission as well to you and make sure your realtor is with you if you go to the sales office for the first time to register. If you don’t have a realtor then ask the builder to give you the commission they would pay your realtor in the form of an HOA or Mello Roos prepayment or something like that. They may punt on that but if you don’t ask you don’t know.

SD Realtor

[SD Realtor]

Hi Amy –

Good luck on your purchase. I have not had much luck working out price reductions with the builders I have represented my buyers for. In some cases we were able to get some very minor cost reductions but any more substantial concessions came in the form of incentives and even then not much.

My advice to you is to try every trick in the book to get some money out of them. Walking in with a group of people and getting a few purchases is a great idea. Asking for MR or HOA costs is also a great idea. Ask for any and as much as you can. Will the builder accept? Maybe and maybe not but it doesn’t hurt to try. Your best leverage would be leverage you develop over time. The more guts you have to look the sales lady in the eye and make a demand and walk away if they don’t meet your demand, then the more you may get in the long run if you are in it for the long run. That is, you can accept walking away and then coming back a few months later.

The bottom line is that for the builders, the last thing they will do is lower the sales price. They will much rather give incentives, upgrades because the cost for them is much less then they give back to you right? They may claim they are giving you 50k in incentives or upgrades when in reality it may cost them 40-60% of that in materials in labor… but what can you do. Also getting credit for MR and HOA is fantastic. Get your realtor to kick you back a rebate of some of thier commission as well to you and make sure your realtor is with you if you go to the sales office for the first time to register. If you don’t have a realtor then ask the builder to give you the commission they would pay your realtor in the form of an HOA or Mello Roos prepayment or something like that. They may punt on that but if you don’t ask you don’t know.

SD Realtor

[SD Realtor]

Hi Amy –

Good luck on your purchase. I have not had much luck working out price reductions with the builders I have represented my buyers for. In some cases we were able to get some very minor cost reductions but any more substantial concessions came in the form of incentives and even then not much.

My advice to you is to try every trick in the book to get some money out of them. Walking in with a group of people and getting a few purchases is a great idea. Asking for MR or HOA costs is also a great idea. Ask for any and as much as you can. Will the builder accept? Maybe and maybe not but it doesn’t hurt to try. Your best leverage would be leverage you develop over time. The more guts you have to look the sales lady in the eye and make a demand and walk away if they don’t meet your demand, then the more you may get in the long run if you are in it for the long run. That is, you can accept walking away and then coming back a few months later.

The bottom line is that for the builders, the last thing they will do is lower the sales price. They will much rather give incentives, upgrades because the cost for them is much less then they give back to you right? They may claim they are giving you 50k in incentives or upgrades when in reality it may cost them 40-60% of that in materials in labor… but what can you do. Also getting credit for MR and HOA is fantastic. Get your realtor to kick you back a rebate of some of thier commission as well to you and make sure your realtor is with you if you go to the sales office for the first time to register. If you don’t have a realtor then ask the builder to give you the commission they would pay your realtor in the form of an HOA or Mello Roos prepayment or something like that. They may punt on that but if you don’t ask you don’t know.

SD Realtor

[amy]

SD Realtor – thank you so much for your advice & positive email. We LOVE the lot one house is on, but realize that things happen for a reason, so we are ok with walking away if the builders won’t deal (I will be sad, but like the song says, “I will survive”). It’s interesting as this is a premium, large view lot and I was told that it was reserved for Priority List #1 and that there were two other people in line behind them if it fell through (the lot just opened last week) but then I went by the sales office again this weekend & when the sales people saw me they just about threw a party, they were so happy to see me. Apparently everyone on the “Priority list” had contingencies so they had to pass. We weren’t even on the list (we refuse to fill out those pre-qual forms unless we are ready to buy) and now the lot/house is ours if we want it. So even premium lots are not moving quickly now. If they won’t deal, we will just wait & either come back later when it’s fallen out again or find another seller/builder who will deal. We want cost reduction, bottom line.

[amy]

SD Realtor – thank you so much for your advice & positive email. We LOVE the lot one house is on, but realize that things happen for a reason, so we are ok with walking away if the builders won’t deal (I will be sad, but like the song says, “I will survive”). It’s interesting as this is a premium, large view lot and I was told that it was reserved for Priority List #1 and that there were two other people in line behind them if it fell through (the lot just opened last week) but then I went by the sales office again this weekend & when the sales people saw me they just about threw a party, they were so happy to see me. Apparently everyone on the “Priority list” had contingencies so they had to pass. We weren’t even on the list (we refuse to fill out those pre-qual forms unless we are ready to buy) and now the lot/house is ours if we want it. So even premium lots are not moving quickly now. If they won’t deal, we will just wait & either come back later when it’s fallen out again or find another seller/builder who will deal. We want cost reduction, bottom line.

[amy]

SD Realtor – thank you so much for your advice & positive email. We LOVE the lot one house is on, but realize that things happen for a reason, so we are ok with walking away if the builders won’t deal (I will be sad, but like the song says, “I will survive”). It’s interesting as this is a premium, large view lot and I was told that it was reserved for Priority List #1 and that there were two other people in line behind them if it fell through (the lot just opened last week) but then I went by the sales office again this weekend & when the sales people saw me they just about threw a party, they were so happy to see me. Apparently everyone on the “Priority list” had contingencies so they had to pass. We weren’t even on the list (we refuse to fill out those pre-qual forms unless we are ready to buy) and now the lot/house is ours if we want it. So even premium lots are not moving quickly now. If they won’t deal, we will just wait & either come back later when it’s fallen out again or find another seller/builder who will deal. We want cost reduction, bottom line.

[amy]

SD Realtor – thank you so much for your advice & positive email. We LOVE the lot one house is on, but realize that things happen for a reason, so we are ok with walking away if the builders won’t deal (I will be sad, but like the song says, “I will survive”). It’s interesting as this is a premium, large view lot and I was told that it was reserved for Priority List #1 and that there were two other people in line behind them if it fell through (the lot just opened last week) but then I went by the sales office again this weekend & when the sales people saw me they just about threw a party, they were so happy to see me. Apparently everyone on the “Priority list” had contingencies so they had to pass. We weren’t even on the list (we refuse to fill out those pre-qual forms unless we are ready to buy) and now the lot/house is ours if we want it. So even premium lots are not moving quickly now. If they won’t deal, we will just wait & either come back later when it’s fallen out again or find another seller/builder who will deal. We want cost reduction, bottom line.

[amy]

SD Realtor – thank you so much for your advice & positive email. We LOVE the lot one house is on, but realize that things happen for a reason, so we are ok with walking away if the builders won’t deal (I will be sad, but like the song says, “I will survive”). It’s interesting as this is a premium, large view lot and I was told that it was reserved for Priority List #1 and that there were two other people in line behind them if it fell through (the lot just opened last week) but then I went by the sales office again this weekend & when the sales people saw me they just about threw a party, they were so happy to see me. Apparently everyone on the “Priority list” had contingencies so they had to pass. We weren’t even on the list (we refuse to fill out those pre-qual forms unless we are ready to buy) and now the lot/house is ours if we want it. So even premium lots are not moving quickly now. If they won’t deal, we will just wait & either come back later when it’s fallen out again or find another seller/builder who will deal. We want cost reduction, bottom line.

[sdrealtor]

I know Davidson is privatyely owned but not sure about Shea. If they are public, find out when their year end is. If it’s June 30th you might have some newly found levereage. If not, you can wait until you do and hopefully the home you want is still there.

[sdrealtor]

I know Davidson is privatyely owned but not sure about Shea. If they are public, find out when their year end is. If it’s June 30th you might have some newly found levereage. If not, you can wait until you do and hopefully the home you want is still there.

[sdrealtor]

I know Davidson is privatyely owned but not sure about Shea. If they are public, find out when their year end is. If it’s June 30th you might have some newly found levereage. If not, you can wait until you do and hopefully the home you want is still there.

[sdrealtor]

I know Davidson is privatyely owned but not sure about Shea. If they are public, find out when their year end is. If it’s June 30th you might have some newly found levereage. If not, you can wait until you do and hopefully the home you want is still there.

[Author]

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