Negotiating Builder Incentives

Knowing how to negotiate is an important part of any deal, whether it’s closing a deal on a car, business deals or even interacting with other people, and building and buying a home is no different. Completing a new build often requires that buyers and builders meet in the middle to close on a deal, and part of that process is builder incentives.

What are Builder Incentives?

Builder incentives are designed to help buyers save money through lower initial building costs and mortgage rates, while allowing builders to secure a longer relationship with the buyer. They vary from builder to builder, so when you’re looking at builders for your new home, consider looking into the incentives they offer for new builds.

There are a few different types of builder incentives, though the most common generally revolve around customization of the home, and assistance with closing costs. Customization incentives usually include discounted or free items such as countertops made of premium materials, upgrades to flooring and/or roofing, and additional landscaping for the yards. Closing incentives exist to help the buyer seal the deal on their build, usually through lowering upfront expenses.

How to Negotiate with your Builder

Before anything else, it’s important to know if your builder is open to negotiation in the first place. It’s not uncommon for builders to set their prices far in advance of construction, and that can make them seem inflexible. It’s never a bad idea to ask, though; you may find they’re willing to work with you to see what can be done.

Knowing the building process, while not necessarily essential, will definitely give you a leg up when it comes to negotiating during the build. It will allow you flexibility during the process. If you know where the home is in its construction, it’ll be easier for you to make decisions; for example, if you want a specific kind of flooring or roofing and the house hasn’t yet reached the phase of construction where they’ve been installed, you can potentially work with your builder to acquire your desired material.

Real estate agents can help you in the negotiating process as well. Real estate agents are licensed professionals who help buyers by acting as an intermediary between them and the builder. Agents are generally familiar with the home building process, so they can advise you on where the home is in its construction and what modifications might be possible. They’ll also help you find a home within your budget and can keep you informed about the market in general while you’re still looking.

Getting pre-approved by a lender can give you some wiggle room for negotiations. While it’s not guaranteed, getting pre-approval will show builders that you’re a serious buyer and financially equipped for the journey you’re going to undertake with a new home. Some builders work with specific lenders, though it’s not a requirement to work with those services specifically. Some builders will offer some special prices or sales for pre-approved buyers to get things started, so check out your’ builder’s offers to see what you qualify for.

Why Should You Negotiate?

Having room to negotiate is an important part of any business deal. Many builders want to work with you to close sales, so it’s worth asking about the incentives they offer. Negotiating incentives with your builder is a good way to lower a number of different costs, such as mortgage rates, certain construction costs and home warranties. Since both the buyer and builder will have expenses to cover as part of the deal, it’s in the best interest of both parties to compromise and work together.

To learn more about builder incentives and the home building process, visit newhomesource.com.