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user748002

Advice

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Negotiating on new home construction

My wife and I are scheduled to meet with a builder in about a week.  I have been reading blogs and postings regarding negotiating tactics for new home construction.  I have a buyers agent and the home will be able to be a little bit more customized than most. We can modify interior walls etc based on pre-set home designs.My understanding is that most negotiating occurs with upgrades/options.  Realistically what type of expectation should I have when attempting to get something at reduced price from the "official price sheet".  Looking it over certain things seemed price reasonably like the price they quote for a back deck is pretty good according to a contractor friend of mine.  But the same friend said the windows seemed extremely expensive.Any good tactics to use to get a fair deal?  I know the base price of the house generally won't budge because of neighborhood values etc, but I want to try and negotiate where I can and where I can get the most bang for my buck.Also any types of upgrades from the builder to steer clear of?  Any types (other than structural changes of course) that make more sense to do during initial construction?Thanks

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Fannie Mae periodic price drops

Answer

Thanks Tyler.  I never got alerted to your response.  Its day 33 now, no price drop yet, but still tracking.

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Fannie Mae periodic price drops

There is a home I am interested in that is a Fannie Mae property.  Only on the market for 24 days.  It is grossly overpriced.  They have it listed for $392k.  The only other home in the neighborhood that sold this year was another foreclosure that was a bigger house and bigger lot for $320K.  Other houses sold last summer in the $345-$355 range but again they were bigger homes by about 1200 sq ft on average.  And the house I like is move-in ready.  But even with fresh paint and carpet you can't justify the $392 price.I have done extensive research and found that Fannie generally drops prices starting at the 30 day mark and every 15-30 days after continues to do that.  Does anyone know if fannie has a set dollar amount they drop prices or a % that they use that is standard.  Or do they vary it by market?  The first 30 days will be this weekend so just curious what to expect.  We had the first offer countered this morning.  We offered $310 and they countered with $390.  My agent can't figure out where they are getting that ridiculously high list price from. He doubted me at first until he pulled comps and said lets go for it.  The only thing against us is the time on the market.  Luckily I am in a situation where I don't have to move and will just rent out my current house when I am ready.  So I can wait for that house or another one in the neighborhood to become available.  Just wondering if I will still be tracking this house at Christmas time.  Someone would be out of their mind or just have way too much money to pay that price.

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Fannie mae reo

Answer

make sure to have your buyer's agent pull comps in the area.  A house we are trying to buy via Fannie Mae is listed way above Fair Market Value.  At least 18% above what it should be.  That should be your comparison for making an offer below the list price.

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Fannie Mae overpriced home vs comps

Answer

hey Rebecca,I have a higher price that I know I won't go over and have no problem walking away or to just continue to wait as days on market start to rack up .  But I am curious if they will even counter reasonably.I am not hung up on my first bid at all.

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Fannie Mae overpriced home vs comps

Answer

Thanks Craig,Thats an interesting approach.  Zillow estimates the house at 330.  But I don't know really how accurate Zillow is overall.  It was pretty off on my house until I took control of the property and updated it. 

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Fannie Mae overpriced home vs comps

Answer

thanks Rebecca.  Yes it does look like carpet and paint was done since the house is move in ready.  So I do expect to pay more than my first offer.  But with considerably less finished space as well as a smaller lot, just paint and carpet won't be enough to justify a super premium over the comps in the area.I am just wondering if they will come back with a reasonable counter. 

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Fannie Mae overpriced home vs comps

Answer

Thanks Tim.And thats fine.  We are willing to go up more and fortunately have the option of waiting as well.  Patience is apparently the key right now.  The other house that just sold for 320 sat on the market for 260 days or so.

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Fannie Mae overpriced home vs comps

My wife and I are in a situation where we don't have to move but would like to.  We found a great house that turns out to be a forclosure owned by Fannie.  We have found the price history on Zillow and saw this house has been on and off the market for the last 3 years in the 290-325 range which is in the fair market value.  Another home just sold (bigger lot and 1500 more finished sq ft) for 320 one week ago (it was also a foreclosure).  Fannie listed the house we wanted at 392 (22 days ago) which is insane.  I have read where there have been gross over pricing in a lot of markets in the 15-20% range.  We offered $310, which is fair and hopefully get a counter that is reasonable based on comps.  Has anyone else had any experience with this recently and had success?  Any thoughts on how we can be successful in getting the price down to the comp range without waiting for the house to sit for 6 months? Based on the foreclosure date I would guess the house has been empty since Feb 2013.  Also this house is move-in ready.  In the particular area we are looking this at first glance is not a house in a condition for an investor/rental/flipper. Its been 3 days since we submitted the offer and haven't had a response yet.

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