Homeowners
Buy At Builder's Cost
By
Jan 3, 2006, 06:09

In my years of experience I have sold more than just a few homes to buyers who were lucky enough to have hit us at the right time where we desperately needed a sale and were willing to drop our price all the way down to our cost in order to do so.

You, too, can buy at the developer's or builder's cost. It's all a matter of timing and a little bit of luck. You can improve your chances of good luck by a little investigative work as to what the right timing would be to purchase from your builder or developer in order to get the lowest price possible. When you are dealing with a developer, there are all kinds of agendas that are ongoing that you are not aware of. Maybe the salesperson desperately needs a sale in order to make an imposed quota. This salesperson will be your greatest ally in helping you negotiate the best price possible for his own purposes. Maybe the sales manager or the director of sales needs another sale for the month, that week, that quarter, or the year in order to make his projection (and maybe save his job) and is willing to bend the rules and negotiate the best possible price with you. Maybe the project manager or the C.E.O. (Chief Executive Officer) is in the same boat. Maybe the developer or the owner desperately needs a sale in order to make a particular quota that has been scheduled and promised to his major real estate lender on the development, or else the loan goes into default...so, as you can see, it's all a matter of timing. Just as a rule of thumb, always purchase or negotiate to purchase your home in the second half of the month, or in the last two weeks of a quarter, or in the last month of the year.



Questions to ask your salesperson that might give you some inkling of these hidden agendas which might help you get the lowest possible price would be:

1. How many sales has the development made and when did they start selling. (You can sometimes gather this information by simply looking at the developer's site map and counting the number of lots that are indicated as sold and then establishing when the developer started selling homes.) This will give you an idea of how many homes the developer sells in a particular period of time, say in a year.
For example, if you calculate that a developer has sold a hundred homes in the last two years, you know that he has been selling about fifty homes a year. If the salesperson tells you they expect to sell two hundred homes a year or a hundred homes a year and you notice they have only sold a hundred in the last two years this tells you the developer does expect or hope for a higher rate of sales than he has been experiencing in the past.

2. Ask the salesperson if the development functions on a calendar or a fiscal year. This will help you know when the quarter or the end of a year is, as far as the developer is concerned.

3. Ask the salesperson what months are the peak seasons of sales in the course of a year. This will tell you near the end of what period of time you should be coming in to make your offer. Negotiating near the end of certain deadlines as stated! As above, whether they be weekly, monthly, quarterly, yearly, or seasonally, always creates a certain urgency in the developer's mind which often translates into a lower
price than otherwise you could have negotiated. And, it doesn't always stand that the developer needs to be desperate. Sometimes the opposite is true and that is if the developer is doing very well, there is almost a euphoric excitement that sets in (sort of like a feeding frenzy) where they will shoot from the hip and quickly accept lower offers to get that extra record sale that otherwise they would not accept during more sober times.

4. Ask the salesperson if he has a budget on promotions and does he have any extra budget that he could offer you in helping you negotiate your best price.

5. Just ask the salesperson directly when the best time to make an offer is because the developer really needs the sale. Sometimes you can just tell the salesperson that you are a buyer but that you will wait until he calls you to let you know when is the most opportune time to negotiate the lowest price.