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It’s the end of the year, families come together and the real estate industry slows down, or does it? Nearly every major store offers sales to draw more crowds, but it’s easy to forget one of the markets you can save the most money in. New home builders offer tremendous sales and they often go overlooked. Nationwide builders, and even local custom builders to an extent have to report to shareholders, and showing strong profits for the fiscal year looks great on their reports. They also know that people usually put off their home search until after the holidays, after all, buying a home, can be an intensive process, especially if you don’t have the right support. So these home builders offer tremendous discounts. Here are 5 ways to make out like a bandit.
Okay this may seem intuitive, but it’s important to note that builders heavily discount inventory listings during the holidays. Why? They have a significant amount of capital just sitting in these completed properties. In fact, you can almost always purchase an inventory home for less than a comparable, non-built home, especially during year end holidays. Apart from the profits they’ll earn from selling an inventory home, builders want to use the capital from a built home to further another, existing project. The developer is also paying interest on the money they borrowed to build a home. Taking these items into account, builders are typically willing to take a lower profit on an individual home in order to move on to new projects. We’ve seen builders reduce their asking price on a new construction or inventory custom homes by as much as $60k-$70k before. Take advantage of this.
Closing Cost Concessions
Financing a home comes with additional fees in the form of closing costs. If you’re paying cash, this doesn’t apply as much, but hear us out if you intend to use a lender. Sellers are allowed to pay a portion of a buyers closing costs. Now, it isn’t that rare to see sellers pay some of a buyer’s closing costs, but builders are typically willing to pay more during year end sales, more so than is typical with conventional resale homes. Large home builders often have an associated lending company owned by their parent company. Since both companies are owned by the parent company, the lending side is sometimes authorized to take a lower-than-normal profit in order to increase sales on the build side, assuming a buyer uses the builder’s lending company. It isn’t always possible to negotiate this (especially in concordance with negotiating further reduced sales prices), but it’s much more likely to be possible before the New Years. This isn’t just savings you’d see over time, like with a lower interest rate, it’s a bulk cash savings at closing. This makes it possible to greatly reduce the amount you pay in fees to your lender just by closing a few days or months earlier. You can use the money saved for anything you want after closing: vacations, gifts, nice dinners, etc. If you don’t want to use the builder’s lender, that’s okay too. It’s important to feel comfortable with whoever you entrust the lending process to. Outside lenders may even be willing to offer reduced closing cost help in order to keep your business, too. Looking into incentives offered by the builder’s lender is a great all-around way to save money upfront.
This one is a little hit-or-miss and can be influenced by if the inventory home is already completed. You don’t need to buy from a custom home builder to get a customized home. Semi-custom builders are sometimes willing to make cosmetic changes to a home so it checks off the boxes on your wants list. A different light fixture, different colored granite, and flooring changes can all be negotiable. While it may not be possible to have these changes done on a completed home, builders often have several homes under construction where these customizations can be made.
Trees, grass, and shrubs completely change the ambiance of a property, but can come at a hefty price. New homes often come with a landscaping package. For example, the builder will state they are putting an oak tree in the front and a set of shrubs in the back. Asking them to throw in an additional tree or to plant a specific type of tree instead can save you a large sum of money. Builders have all the contacts and equipment to landscape properties effectively, and they may be willing to do a little bit extra in exchange for having a property under contract before the year-end.
It may seem unintuitive that a house doesn’t automatically come with everything that makes it a home. You can save big on purchases after closing by asking the builder to throw in an appliances package or window treatments. Refrigerators, washers/dryers, and blinds definitely add up, especially when purchasing on the higher-end. Builders have contacts with suppliers and can get many items for a discounted price. Let’s say you’re a cash buyer or don’t require closing cost help, asking for the builder to throw in a nice fridge and wood blinds is a great way to get a better deal. Suppliers are having year-end sales on these items, too, so in addition to getting a “free” fridge, the builder may be willing to purchase a nicer one on your behalf.
Buying a home at the end of the year can save you thousands. Everything from pricing discounts and closing cost help, to less apparent things like appliances, customizations, and landscaping can save you a significant amount of time and money.