For New Home Builders, it's the End of their Fiscal Year - and The Fun Begins !

By
Real Estate Agent with New Home Hunters of Fort Worth and Tarrant County

Every year... right about this time... just like clockwork... it happens.  No, I don't mean it's Cowboy's Time.  And NO, it's not yet time to turn your clocks back.  It is the time of year when several of the major New Home Builders in Tarrant County see the end of their Fiscal Year approaching... and let the word out that they will pretty much do just about anything to squeeze in "one more closing" before their fiscal time-clock runs out.

What will they do ?  Well, it all depends.  First, it depends on how many completed homes the builder has "sitting" at that time.  It also varies depending on the specific model or floorplan.  They may only have one or two of a floorplan that sells well, so in that case... they are less likely to negotiate, although many things are still possible.  They may replace carpet with tile, replace carpet with hardwood, upgrade appliances, or include a washer, dryer and refrigerator at no cost.

If the floorplan you happen to like is one that the builder has a pretty good "overstock" on... even more may be possible.

What kinds of things do Home Builders NOT like to negotiate on?  Pricing is probably the touchiest item for a builder when a buyer wants to negotiate.  And... there's a reason or that.  Let's say a home is listed for a certain price, perhaps $225,900.  The buyer wants the builder to drop the price, for example's sake, by $20,000.  Even if the builder were inclined to accept the buyer's offer, the main reason they would prefer to negotiate making other types of concessions is that reducing the price on any particular floorplan makes it all that much more difficult to get an appraisal for the NEXT home of that floorplan that sells.

In submitting an appraisal, appraisers must provide three "comparable" homes to substantiate the value of the home being appraised.  In a builder's case... those three homes should preferably of the same model, that have closed and funded within the last six months, and in that same subdivision.  This is the ideal... same floorplan, same subdivision.

In the future, when the builder is trying to get another appraisal on a different home of the same floorplan... if one of the only three available comparables (comps, we call them in real estate lingo) happens to be the one the builder dropped the price by $20,000... it can have a very negative effect on the new appraisal. 

So... if a buyer really insists on "making an offer"... the builder is much more inclined to include free options, appliance upgrades, install hardwood or ceramic tile at no charge, install Corian-type counter-tops at no-charge, pay closing costs and pre-paids, pay for an interest rate buy-down, give down payment assistance (such as paying the FHA 3% downpayment for the buyer), or other such concessions rather than lowering the price.

Also... sometimes some Realtors are hesitant to bring clients to New Home Builders... because the builders usually have their "own" contracts rather than use a standard Realtor contract.  But remember... you are much more likely to be in the "driver's seat" if your agent happens to have extensive experience working with New Home Builders.

I have seen this for the past seven years that I have been a Realtor in Tarrant County, and for the Nine previous years when I worked for several National New Home Builders here in Tarrant County.

It is unusual for a Realtor to also have had experience working for New Home Builders.  With that in mind, I give my "buyers" a real edge in their negotiations when purchasing their New Home from a Builder. 

It is such a great feeling for me to have helped so many families in the past accomplish what they had thought was the impossible.  Home Ownership... The American Dream.  This is one of the better times for me to make their New Home Dreams Come True.

____________________________________________________________

Please visit my website at www.NewHomeHuntersOfTarrantCounty.com .  You'll find much information that is not available anywhere else.  If you are in the market for a Brand New Home... NOW is the time to call me.  Karen Anne Stone... (817) 929-3400.  Wouldn't it be great to have your very own Secret Weapon ?

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Location:
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Tags:
fort worth new homes
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Rainer
61,897
Irene Morales Ward
Realtor - ABR, e-Pro - Northern Virginia Real Estate
REMAX Distinctive Real Estate, Inc.
Karen - great information.  I am showing clients new homes construction vs resale tomorrow and those are great points to drive home.  They need to know that everything is negotiable...especially at this time of year.  Thanks for sharing.
September 03, 2007 07:14 AM
Rainmaker
995,711
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

Paula:  Yes, on some of the higher end homes, a savings like that can be possible.

Irene:   You're very welcome, Irene.  And... the builders around here really do want us to share that info with the buyers.  They all want to squeeze one more closing in before the end of their fiscal year.

September 18, 2007 08:43 PM
Rainmaker
291,597
Kathy McGraw
Riverside County CA Real Estate
CELLing Realty
Karen-I have never sold a home in a new subdivision so found this information quite useful... Thank you, I especially liked your explanation of why a Builder doesn't want to drop the price ( appraisal) .  that makes perfect sense.
September 30, 2007 11:20 AM
Rainmaker
995,711
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County
Hi Kathy:  Thanks for your comments.  No, builders do not like to drop their prices.  But... towards the end of their fiscal year... just about anything is possible.  Also, the specific home you are contemplating making an offer on can make a big difference.  If the builder only has one of those on the market, the pricing tends to be firm.  If, however, the builder misjudged his market, and pre-built several of that particular model, and they have not sold... then more builder concessions are possible... including dropping the price.  Kathy, if I can ever assist you with answers concerning New Home builders, please do not hesitate to ask.  Take care...   Karen Anne
September 30, 2007 11:48 AM
Ambassador
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Joni Staples
Your Huntsville / Lake Livingston Area REALTOR®
Berkshire Hathaway Home Services - Anderson Properties

Thinking of you daily and lifting you up in prayer to The Great Physician! XOXOX

October 16, 2013 05:54 AM
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Karen Anne Stone

Fort Worth Real Estate
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Additional Information

The Real Estate Market in Fort Worth and Tarrant County offers such a great value to both "first time" and "move up" buyers. Karen Anne's blog gives you up-to-date market news, and features many of the great homes available at great prices !