How to Negotiate the Best Price on Your New Home

Negotiating a lower price on a new construction home purchase can save you thousands. Use these proven tips to maximize your leverage during price discussions with builders.

Do Your Research

Knowledge is power when negotiating any major purchase. When buying a newly built home:

● Learn neighborhood comps. Look at recent sales of similar-sized homes nearby.

● Study builder incentives. Check for price drops or incentives on other units, especially slow-selling ones.

● Talk to other buyers. Ask about their experience negotiating with this builder.

● Get multiple price quotes. Contact several builders to compare base pricing.

 

Have Financing Pre-Approved

Get pre-approved for a mortgage before starting conversations with the builder. This shows you are ready to move quickly. Waiting to apply until after agreeing on the price gives the builder more leverage.

Know the Builder's Motivations

Understand why the builder may be motivated to negotiate:

● Excess inventory - Price drops on slow-moving units

● Meet quarterly sales targets

● Undesirable lot - Bad views, busy road, power lines nearby

● Upcoming phase release - Clear inventory before following homes hit the market

● Off-season timing - Less demand in colder months

Make Your First Offer Low

Don't worry about insulting the builder with a shallow offer. Expect that your first offer will get rejected.

● Offer 5-10% below list price on your first bid.

● Have reasons to justify the low offer - comps, upgrades needed, and a lot of challenges.

● Suggest you buy appliances or other options if the price drops.

Negotiate Multiple Components

Look beyond just the base price when negotiating. Be creative:

● Offer to buy upgrades at cost and do them yourself later.

● Ask for closing credits to cover moving, window treatments, lawn care, etc.

● Request 1-2 years waived HOA fees.

● See if the seller will buy down the interest rate or pay points on your loan.

Manage the Negotiation Conversation

Stay in control of the price discussion and timelines:

● Don't accept "final offer" ultimatums. Politely keep talking.

● Use email for written documentation; limit phone calls.

● Take time before responding to offers in writing. Don't feel rushed.

● Set boundaries and insist on both parties being reasonable.

 

Make Concessions Slowly

Expect the process to take some back-and-forth. Don't concede too much at once.

● Increase your offer slightly after their first rejection.

● Throw in a concession, like paying for closing costs.

● Hold your ground on price for now. See if they will come down further first.

Seal the Deal

Once you reach an acceptable compromise price:

● Get all agreements in writing, signed by both parties.

● Solidify timelines for completing the transaction.

● Formalize any particular terms of the deal.

● Submit your deposit check to show your commitment.

Conclusion

New construction homes must not be sold at the total list price. Do your homework on neighborhood sales, builder incentives, and financing first. Negotiate confidently using creative concessions until you reach a fair price. With preparation and patience, you can negotiate thousands below list price.