New build - discounts?

[Kloubek]

So, given that house prices are probably about as low as they are going to be, we figured now might be a good time to build what amounts to basically our dream home in Chestermere. Not extravagant, but something that meets every need we have. It would amount to roughly 50-60g more than our current house worth so it's not like we're stretching it much.

Being that I've bought and sold some 45-50 cars in the past for a good profit, I'm used to seeking out and getting deals. However, the homebuilder we have likely selected is Reidbuilt, and they have right-out told me the price is the price and they will not negotiate - explained as the fact that with our crappy dollar, their building expenses are higher than they used to be, and they are already working with thin margins.

I have heard that in general, the easiest way to try to get deals is via the upgrades, and we would likely have 60-70g in upgrades to the home we are looking at with everything we want. They already have a program whereby when you meet certain tiers, they will refund/credit you back some money, so they'd already be crediting us some 20g as a result, but being that I'm a cheap-ass, I need to know I negotiated the best deal possible.

So it's a pretty broad question for those in the "know" - I am ok with not negotiating on the home price itself, but is it typical and expected that I would negotiate a better discount on the upgrades? Am I being unrealistic? Should I go in, get them to exactly price out the home with all the upgrades/details and then play hardball and walk away if they don't give me an extra 10g credit?

I realize this all depends on the builder, negotiating skills, the market, and so many other factors, but I'm hoping someone could chime in with some advice on how I should approach this.

[HiTempguy1]

Just a thought, but why would you want to go with a builder that seems so inflexible? May that attitude extend to other parts of the build that could cause major frustrations?

I have no comment on Reidbuilt itself, but in my opinion, there is ALWAYS room to negotiate. If they don't want to, that means that they don't want your business and are probably busy enough relative to the current size of their company. Or you could legitimately be offering too little money, but the margin on new homes is a lot more than the "poor developers" want you to know.

A better question to ask yourself, is it WORTH $10k to walk away from your dream home? Seems a bit shortsighted to me assuming a $500k+ house, especially if you like the lot/location and are happy with the builder's rep.

I negotiate on everything, I don't usually care about gimmicks such as "negotiating on the upgrades". The price is the price. Having built about 8 houses with the family business, this is just my opinion :dunno:

[Kloubek]

First point noted. At least from the sales side, they seemed like the warmest and most accommodating sales reps from all the companies we visited. You might have a point though - if they are working on such a shoestring margin.

For your second point, that's kinda what I figured. (Hoped?)

For your third, I totally understand your point. However, I'm of the opinion that I'm savvy enough to get deals where they should be available, and I guess it is a let-down to myself if I do not. I'm also of the mindset that opportunities will present themselves at a later date, and perhaps right now is a questionable time to be upgrading purely on the unknown in regards to our oil industry.

Thanks for your comments.

[kenny]

Drive around the area and check out the lots that are owned by Reidbuilt and see what kind of activity they have going on. If they are busy they likely won't move too much on the base price.

Few months ago a couple builders had promos posted on their websites but after a cursory glance I don't see anything at all now so there is probably already a recovery in their sales. I live in a new area and construction hasn't let up at all. All the builders seem equally busy with a new foundation poured every week.

[Kloubek]

Actually, the area is pretty dead. A couple of houses being built, but for the most part it looks stagnant.

Good point though - they are probably itching for sales.

[03ozwhip]

Kloubek, PM'd

[e31]

Most builders won't break ground on new build if they can't make at least 100k on it. The profit they make above and beyond this is what delivers a pleasant & timely response to any myriad of after-sale concerns. Once they notice you're cutting close to their magic profit margin, you'll probably experience the builder digging in their heels on a lot of stuff.

Also, I'd feel guilty if I didn't warn you about the "city" you are considering (and have to find out the hard way). Council is out of control with spending; property taxes for some nearly doubled in 1 year, service fees have massively increased. Due diligence with the town is rewarded only with headache. It's also kind of shifty that the "city" only finalize their budget 1 week after the property tax assessment deadline passes. Tax and spend...

[Kloubek]

Yeah, thanks for that. I'm aware of the turmoil that has occurred in Chestermere lately. I guess there's the other risk: That they will not stop with the hikes and questionable decision making processes and taxes end up double that of Calgary. I believe they are actually already higher - even though they used to be noticeably lower.

Price to pay for living by a lake, I guess....

[roopi]

Originally posted by Kloubek
Yeah, thanks for that. I'm aware of the turmoil that has occurred in Chestermere lately. I guess there's the other risk: That they will not stop with the hikes and questionable decision making processes and taxes end up double that of Calgary. I believe they are actually already higher - even though they used to be noticeably lower.

Price to pay for living by a lake, I guess....

They are definitely higher then Calgary already. You know there are lakes in Calgary right? Unless you need a lake for a boat.

[gwill]

There's always a thread like this every few weeks... The last one the guy claimed he got a great deal negotiating but refused to say to anyone what it was... Lol.

It's very common for builders not to negotiate especially if they are already offering specific incentives which they are in your case. There are 100 different variables that can change why they may take a bit of a bigger discount as usual but typically the builders will offer the same discount for all buyers. One guy doesn't get a better deal then the rest.

The sales rep your working with wouldn't get paid differently so why wouldn't they try and get you an extra $10k off if they could. Submit the offer where the rep says it won't get accepted and be prepared for a counter. Worst case that happens with the builder is they say no to the offer.

[Rocket1k78]

Originally posted by gwill
There's always a thread like this every few weeks... The last one the guy claimed he got a great deal negotiating but refused to say to anyone what it was... Lol.



ive noticed that a lot too :nut:

[403ep3]

Who is this guy that hasn't said what discount he got?

#perplexed

Edit: with their promotions, built in jargon, and us negotiating we received about 60k in "discounts." Of course a bunch of that is likely built in (lot d/c, upgrade promos, and other throw ins)

[canadian_hustla]

Pm'd

[zhao]

Originally posted by 403ep3
Who is this guy that hasn't said what discount he got?

#perplexed

Edit: with their promotions, built in jargon, and us negotiating we received about 60k in "discounts." Of course a bunch of that is likely built in (lot d/c, upgrade promos, and other throw ins)

I dont know what calgary is like exactly because I live in Edmonton, but in edmonton I still walk into some builders show homes and they still tell me stuff like 'oh its this price... but I know they'd take at least ____ price (which seems to usually be about 7% off range, and you know they'd take less still). Sterling (calgary builder) just did that last month here.

My understanding is Calgary is hit far harder by this recession because we have a ton of huge ass projects going on in edmonton right now, so you'd think your builders would be slashing prices more or negotiating harder.

Also, the only builder around here I know of that does the whole 'we dont negotiate thing' is jayman, because they claim to offer thier best price upfront.... and actually, it was a good enough price I saw it on thursday 30 minutes before they closed and came back on saturday an hour after they opened (they do not work fridays) to buy it, and someone put a deposit on it right before they closed on the thursday so i couldn't buy it).

If reidbuilt doesn't negotiate ask yourself if their prices are 'that good' or their homes are 'that much better' to justify the lack of negotiating. Or is the area 'that good' to justify paying full price.

As for what I saved: I bought at the start of this recession when builders were panicing and dumping their spec homes, and i did end up saving something like 20% buying at that time vs paying full price 6 months earlier. Even a year later after all the assessed values have been slashed in my area, my house is still assessed 60-70k over what i paid.

It depends what bracket you're buying in too. Here is what I've noticed for new: IMO condos are a complete joke right now, way over priced and they wont move enoug hfor me to even bother looking at those things. townhomes are hit or miss. Duplexes i think are a rip off rigth now, mainly because Lane homes seem to be the best bang for buck around Edmonton if you want new and are about the same price. anything above lane homes seems hit or miss depending on the builder.

as far as used it is the opposite. I've seen some good deals for condos, and some great deals for $$$ houses. however, lane homes and entry level ft attached garage homes people seem to be asking for 2014 prices still.

[gwill]

The big thing to keep in mind with new home sales. If the builders rep refuses to write the offer its because your way out to lunch on the offer. They won't waste their time if there's no chance in it getting accepted... They also won't write an unreasonable offer if they'll just get their hands slapped by their bosses.

The trick is finding that middle ground... Also as always every builder is different. Some are busier, some will work on less margins and others are a pain in the ass and shouldn't be in business.

[Khyron]

They are not dealing much because the hurt hasn't started. They are only starting to delve into over-capacity. Buddy just signed a 700k build and they gave ~30-40K in free basement dev, discounts. Severances are running out, savings are getting low - Wait a year.

[Kloubek]

I've been doing some research into "expert" opinion on our housing market. We have the "Imminent Housing Crash" thread which was started in a year ago and hasn't exactly come to fruition. There are certainly a lot of doom and gloom sources out there which indicate they believe a serious market correction is to come. Mind you, they've been saying that for years.

What I see is a province that is largely dependent on oil prices to thrive. I also see oil prices that appear to be slowly making a recovery since February. My uneducated mind says that if prices continue to rise and our economy recovers that it can only breed good things across the board - including real estate. In fact, I can see a *potential* situation were signing for a build now could result in an economy recovering over the build time, and therefore resulting in higher prices for selling our current home by the time the new one is built.

I think at this point, in this economy, it's like throwing a dart. You might hit a bullseye or you might not hit the board at all. Reality is probably somewhere in between.

We visited Broadview (who have their own thread on Beyond from years ago, where reviews were poor. I believe they have improved their product since) and are currently working with them to try to find what we're looking for at a price we want to pay. Unlike Reidbuilt, they seemed quite willing to negotiate so we'll see what they come in at for everything we want.

[HiTempguy1]

Originally posted by Kloubek

What I see is a province that is largely dependent on oil prices to thrive. I also see oil prices that appear to be slowly making a recovery since February. My uneducated mind says that if prices continue to rise and our economy recovers that it can only breed good things across the board - including real estate. In fact, I can see a *potential* situation were signing for a build now could result in an economy recovering over the build time, and therefore resulting in higher prices for selling our current home by the time the new one is built.

Fort McMurray WILL have repercussions on the housing market, those who did not have jobs and/or were planning on leaving will accelerate their plans.

A lot of out of work tradesman just received a blessing in disguise.

[lasimmon]

Unless you own your home.

I may be wrong, but they only pay to rebuild, you can't take a payout and leave town.. I think.

[Kloubek]

Originally posted by roopi


They are definitely higher then Calgary already. You know there are lakes in Calgary right? Unless you need a lake for a boat.

Just saw this. Yes, there are small, man-made lakes in Calgary, and the lots of the lots in those areas tend to be small as well. Unless you're willing to spend upwards of 800g-1m, which we are not. The only thing not small about it is the traffic, which remains... well... big and typical Calgary traffic.

This is a lifestyle decision. Chestermere is the closest thing to a real lake as we have close to city limits.