If I had to start negotiating a new construction contract all over again, what would I do different?
1. Hire a buyer's agent!!! - Its true you can negotiate atleast 3% (buyer's agent commision) off the listing price if you do not use an agent. But having gone thru the process, don't even think about it mate! How much ever you pride yourself on your negotiation skills, you can never talk their language.
2. Read the standard specification properly and make sure you understand what exactly comes with the house for the listed price. If you are not sure about the lighting fixtures, paint colors etc, insist on a tour of their design center. "lots of paint options" listed in the brochure may turn out to be 5 options of white; Dover white, moderate white, Antique white.. etc Choosing a custom colors may cost you upward from 2k.
3. While touring the design center, make note of what is standard and what is an upgrade. Request pricing(exact $$ amount - do not settle for vocal estimations) for all the upgrades you are interested in.
4. Weigh in the price of the upgrades along with the listing price and then research comps in the neighbourhood to find your magic number for the house.
5. Write out your offer; the contract may be tailored to cover the builder in all stages... so look out for yourself. Ask for a longer option period - time frame in which you could back out of the contract with no questions asked and a full refund of your earnest money - atleast 10 days; builders only give you 2 days to start with - definitely not enough to talk to friends and family, get cold feet and then warm back up to the deed!
6. Get a written commitment on the closing date - as its a new construction builders are reluctant to commit on a date - so atleast get a commitment on the month - failing which you are freed from the contract without any liability to you and a full refund of your money.
7. From then on, always keep a paper trail. If you discuss something in person or over the phone, follow up with an email citing all the info gathered in that conversation. You could say something like "Following our conversation earlier today, I'd like to confirm the following.... yada yada yada.."
8. If crucial information is shared on voicemail, always find a way to record it on some permanent storage.
These points of action may cry "paranoid" to some but been where I have and seen what I have, it is very practical to me.
Closing up watch out for these small upgrades that all eventually add up to a huge sum
- obscure glass in bath room windows - $125
- make a kitchen window operable - attach a frame so it can slide open - $50
- upgrade from chrome to satin nickel finish on faucets and door handles
- lighting package upgrade
- main door with bevelled glass insets
- upgrade to granite/marble from tile in foyer
- upgrade from electric to gas cooktop - $295
- every additional gas outlet $295
- every additional cable\telephone outlet - $50 ** remember standard number of outlets are very few; they do not even give a cable outlet per bedroom for free.
- move fireplace on CAD designs - $1250 ea for architectural fee
- radiant barrier - $2250
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