[SUNDAY NEWS- San Antonio Real Estate as seen by Val J Aranda, REALTOR® – Metro Realty]
REAL ESTATE HIGHLIGHT: I had a pretty interesting encounter with a Builder this past week. For the first time, in a long time, a Builder’s Sales Counselor could not wave enough “incentives” in front of my client to entice him to buy a New Construction Home. What made this interesting to me was the obvious change in today’s real estate market. Let me explain…
Most of my first-time home buyers come to me with a budget and a move-in time frame in mind. When they can’t find a pre-owned home they love, it’s common for them to adjust their budget to build a new home. This common flip-flop from the pre-owned market to a new construction home keeps a Builder in the driver’s seat (usually).
A LOCAL BUILDER MOVES TO THE BACKSEAT
Last week, I showed a pre-owned, one-year old home to one of my Clients. It was gorgeous with lots of upgrades and beautiful features. It featured granite kitchen counter-tops, tile flooring, rounded corners, 9-foot ceilings, a corner rock/brick fireplace and much more. My client was getting excited.
While we were touring the home, the Builder (who knew I was in the area), gave me a call to invite me and my Client to his sales office. He had a few new construction homes already completed and ready for move-in; he wanted to see if my Client would be interested in one of them. We finished touring the one-year old pre-owned home and made our way to tour the “Spec Homes” offered by the Builder. Here’s how it went down…
NOTE: The pre-owned home and the new home were built by the same builder, and the floor-plans were exactly the same. For the sake of confidentiality, let’s say the pre-owned home was listed at $200,000 and the New Home was listed at $225,000.
We walked into the New Home and the first thing we noticed was the lack of upgrades. The home, while still attractive, had carpet where the pre-owned home had ceramic tile. The kitchen in the new home had standard kitchen counter-tops instead of granite. The living area was grand, but it didn’t have the corner fireplace. Even though the floor-plans were the same, they did not offer the same package.
We shared the comparison with the Builder and explained how the pre-owned home seemed like a better deal. In a valiant effort to convince my client otherwise, the Builder offered a $25,000 incentive/price reduction, dropping the asking price from $225,000 to $200,000. WOW! While the words, “$25,000” sounds massive (and it is), it just wasn’t enough to thrill my Client. For $200,000 not only can he buy the pre-owned home with all of the upgrades, but he would still have nine years left of the Builder’s 10-year warranty. The Builder ran out of sales pitches and went from a “driver” to a backseat passenger.
A BUYER’S MARKET
When buyers have several options and can find more affordable deals, the Buyer has the advantage during negotiations. A seller wants to sell, but will have to compete with the “bigger, better deal.” In this particular scenario, my Client can get more for his money on the pre-owned home. And this time, the Builder agreed.
BUILDING A HOME IS STILL A GREAT OPTION
This particular experience does not mean that every builder will be in the backseat right now. As a matter of fact, this particular builder I wrote about, could have homes in a different community offering better deals than some of their pre-owned competition. The Sales Counselor who assisted us was extremely helpful and greatly appreciated. I’ve done business with him before and I will certainly do business with him again.
Building a home is a fantastic dream for many and a VERY realistic dream-come-true for many more. The BEST way to find the best deal is to shop the options. It takes more than just touring homes, though. Get your hands on a Comparative Market Analysis and compare the values of the homes you are considering.
REMEMBER, the key to opening doors to affordable options is hiring a REALTOR® who knows the market. A buyer’s agent who isn’t afraid to tell you when to walk away, is the agent you want in your corner. Having an agent who will represent your best interest will be your most valuable asset.
DON’T FORGET, when previewing and purchasing a Spec Home, the on-site Sales Counselors are representatives of the Seller/Builder… NOT the buyer. Have your own representation.
HELPFUL ARTICLE: “What? The Builder didn’t tell me that!”
FOR A COMPLIMENTARY LIST OF SPEC HOMES IN YOUR PRICE RANGE, SWING BY THIS PAGE…
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