🚀 go-pugleaf

mithani@i2.COM (Rizwan Mithani) writes:
>We are lookin at a spec. home by PULTE Builder, and I had some
>questions.

>2. How do you negotiate the price on a spec. home. Is it similar
>to making an offer for an existing home?

You negotiate, hard.  Builders are very keen to sell spec homes.  A
builder dropped the price over $40K (from what it would cost to build
that home) for a very nice home to try to get me to buy a spec home --
very nice, with finished walk-out basement, wooded lot on a cul de
sac. Basically he kept dropping the price of options like the $10K for
the premium lot, $10K for the finished basement (thats overpriced, I
know), etc; the key was the fact that I wasn't very interested in a
pre-built home, and that made his very keen to negotiate with winter
right around the corner.... (We ended up going for a semi-custom home,
instead, but we were sorely tempted because at the end the price was a
great deal; eventually, we decided we didn't love the house.)
Incidentally, the builder was K. Hovnanian, so even the bigger
builders negotiate on spec homes..

>3. This home is in a new sub-division (less than one year old)
>consisting entirely of PULTE Homes. How do you go about finding
>the price on similar homes that were sold by PULTE in the sub-
>division? They would not be in an MLS?

Go to the local township to get numbers.  I would expect to pay at
least $10K less for a spec home, unless they were selling out..

Another point, about the home itself talk to your potential
neighbours, and ask how happy they are with their home/builder.  This
is incidentally, a great tip for anyone -- we picked our builder out
of 3 or 4 contenders by driving up to their older developments, and
asking owners about their building experience.  We rightly surmised
that a good relationship with a builder would be essential in a home
with any sort of customization.  I believe this really paid off,
because so far I have found my builder to be a honest man..

Anyway, you also would hear about his follow-up repairs/maintenance
and quality of construction from other buyers..

>4. Is there any advantage on having a Realtor for making an offer
>or would an attorney suffice?  Will the builder accept the fact
>that we are not using a Realtor, and so he should pass on the
>commision (of 3%) by reducing our purchase price?

Not explicitly; but I do know that (for the spec home) the fact we had
no realtor probably helped him shave the price some more..

>5. As this is a newly built home, does one skip the requirements
>of termite inspections and general home inspection. Would this
>stuff be covered by the builder's warranty, anyway?

You just maintain the right to do it yourself anytime in the first
year (its better to wait anyway, before testing for radon, etc.)

>6. Can you ask the builder to give you a Window treatment allowance?
>How do you estimate the cost of reasonable window treatments?
>(this is a 4 BR / 2 LA home)

Much better is to bargain about the bottom line (though you could be
nickel'd and dimed to death).  Its a lot easier to get him to give on
one big chunk, than on 5-6 different items..

>7. Can you ask the builder to pay closing costs and/or points?

Its all part of the bottom line negotiation.. The spec home builder
was willing to pay another point or two to get us to buy.  

>8. How do you tactfully tell the builder that you are not interested
>in his 100& financing schemes without putting them off. I can
>get my own financing at much better rates than the builder is 
>offering. I can make a good down payment, but I do not want to
>jeopardize my negotaiting power by letting the builder know this.

Simple, do what you would do to any auto salesman: lets discuss the
bottom line first; then we'll worry about financing.  Say it like a
dizz ball who can't handle the complexities involved.  

>Thank you for any and all responses.

Bottom line: be willing to walk away, but be intersted enough that the
builder knows you aren't wasting his time.  He must know both these
things (that you are willing to walk away can wait until he's done
talking -- its best to listen first, and then show interest, and
finally decide..).  Its a fine line, of the different builders we saw
(perhaps 10-12 in all) only 4-5 really came hard after us, trying to
woo us to buy; the majority just didn't follow up, but then we weren't
very interested in their houses either..

>Rizwan Mithani	(Rizwan_Mithani@i2.COM)				

Bharat
-- 
R. Bharat Rao,  E-mail:bharat@scr.siemens.com (note the change)
Siemens Corporate Research, 755 College Road East, 
Princeton, NJ 08540, Phones: (609)734-6531(O) (609)734-6565(F) 
<Above opinions are exclusively the author's, and don't represent SCR>