I am looking at a spec homes in a new area that is being developed very quickly (a newly opened area with about 6-10 different builders in the same general place). This particular spec has just been completely finished and is ready for move-in (which we need due to unexpected job transfer and impending delivery of our second child). The price is 183,102 and they will minus $5000 off the sale price (with preferred lender) since it's a spec and doesn't qualify for the $5000 in design center upgrades incentive they are offering on pre-construction homes. Assuming the preferred lender would be comparable to others, that brings the price to 178,102. I pointed out that most other builders in the area are now offering central air as a standard feature, which they are not, and they said they would go ahead and add central air to sweeten the deal. My question now is: now that it's time to make an offer, do I have any other negotiating options, or is the adding of central air about as far as they likely will go? (I am working directly with the sales agent and do not happen to have my own buyer's agent this time around).

I realize that builders on a spec in a new area are unlikely to go down on sales price for appraisal reasons, etc. But, could we make an offer for sale price plus a few more upgrades or options that could still be done (adding a second sink that has already been plumbed in master bath, upgrading black stove to black flat top stove, or an allowance for sprinklers, more landscaping, etc), OR for sale price plus help with closing costs?? I want to be fair, but the price is really at the top of our budget and we hesitate to just accept the sale price without any other offer or negiotations. Any help on this topic would be GREATLY appreciated!!

My Brokerage has represented several Builders/ developers over the past 5 or so years.

As you indicated, reductions in price is often not a realistic approach particularly in the initial build phase. It does have possibilities for the last homes but not so much with the first... it would have a de- valuation effect on other similar homes they may build.

Upgrades is the normal way these builders / developers work. Getting things added that don't require structural changes are often their for the asking. I could normally get a refrigerator matching the existing stove for my clients with just a request... they are not deal breakers but could be a deal maker.

Another very viable but lesser known method is to get the builder / seller to offer a Buy-down like a 3-2-1 plan. This may be very possible since your being "enticed" to use a preferred lender.

A 3-2-1 plan works like this... for a few thousand dollars paid by the builder your first years interest is 3% less than the fixed rate, 2 year it is 2% less and 3 year it is 1% less and it is the fixed rate on the 4th year. This helps you with the ratio's, allows the seller to get his full asking price and you get a break.

This only works if the builder is willing to take the hit... if your market is hot... they will have no interest. We were doing them a few years ago but now with a Sellers Market... the builders can sell well prior to completing the project.

Good Luck

Thanks so much...I appreciate the advice. We are going to call their preferred lender today, as well as a couple other mortgage companies, to see if the interest rate and terms are comparable, and then I think we'll ask about a buydown OR if they'll add in a fridge or upgrade the black stove to a black flat top stove. Wish us luck! Thanks again!