There are many techniques to negotiating a new home purchase. Almost everyone has their own brand and approach to negotiating, as evidenced by the dozens of books written on the subject. There really isn’t a right or wrong way to negotiate as long as you have the basics down. The biggest difference in negotiations is the personality and egos of the people who are negotiating.

That being said, I thought I would chime in and share some of the negotiating tips I have learned over my last 15 years in the mortgage business. These are what I would call “the basics”, with a twist of my personality added for good measure. I hope you enjoy.

The Golden Rule

Negotiating is a game of leverage, meaning the person that has the advantage in a negotiation is most likely the one to emerge victorious in that round of the negotiations. I emphasized “that round” for a reason, because when buying a home, the price is only the first battle in a long string of negotiations. Knowing who has the advantage in each round of negotiations is a key factor to winning the war.

For example:

Let’s assume that you and your wife have found a home that you love and want to buy. Whether you know it or not, when you make an offer on a home you are negotiating from a position of weakness. The owner knows that you want to buy the house or else you wouldn’t be making them an offer to buy it. Apart from those sellers that are in bad financial shape, the seller will usually win the first battle. Advantage seller

However, most people forget that the negotiations last throughout the length of the sale until the deal is closed. A mortgage transaction could take as long as a month and maybe longer to close. You still have appraisals, home inspections, mortgage issues and many other negotiating battles to be fought and won. So, don’t be too hard on yourself if you didn’t come out of the first round of negotiations “smelling like a rose,” just get ready for the second round.

Meanwhile, the seller has put a chunk of his own money down on a new home in anticipation of you buying his home. He has scheduled movers, picked out drapes, and applied for a mortgage. The savvy negotiator realizes that the once reluctant seller is not so reluctant anymore. The power in the negotiations has now shifted, just in time for the home inspector. It’s now the seller that needs you to do something for him, namely buy his house. Advantage buyer.

Deal with a motivated seller:

Have you ever began negotiations with someone who has the attitude like “I don’t really care to sell this, but make me an offer anyway?” That’s usually just a negotiating gambit used to get the buyer to make the first offer. Much like the home shopper who plays coy with the realtor or home owner as to how badly they really want the home. However, there really are people in the market who really don’t want to sell and whole-heartedly expect you to make them a ridiculous offer. Your first job in negotiation is to be able to distinguish between the two. If you are dealing with the latter, you should walk away or be prepared to pay a lot for the home.

Know when to walk away:

I have walked away from a dozen homes in the last 15 years, partially over the mechanics of the deal but primarily over emotions. Personal emotions have no place in a negotiation, and I should know since I have blown quite a few good deals over my ego. The point I am making is for you to be prepared to walk away. I tell most couples in the market for a new home “that after you find the perfect home, go find another one that is near to perfect.” If you are using a realtor, don’t let on which home you want to buy until you have the two homes picked out.

To negotiate price from a position of power, you must be prepared to walk away and you must do it if you don’t feel you have a good deal. Some of the best deals I have made on properties materialized two weeks after negotiations had broken down. Don’t get me wrong, you won’t always get that second call and that great deal, most often you won’t. However, one way to improve your chances of getting that second call is to always leave the negotiations in a civil manner. I always like to use the “oh shucks” method which basically says “I really like your property, and it is probably worth every dime you’re asking, but I just can’t afford it and thank you anyway.” This will leave the door open for further negotiations.

Ask for it all and then some :

Everyone likes to think that they are a shrewd negotiator and **** to feel like they have lost in the negotiations. The best negotiators in the world get exactly what they want and leave their opponents smiling at the table. The way to do this is to make a fair offer on the home, and by fair I mean a price a little higher than you would like to pay. Then, attach a laundry list of things you would like the seller to address. Ask them to fix the roof, put in carpet, leave the refrigerator, paint the inside and anything else you can dream of.

This creates a myriad of issues that you and the seller can each give and take on. By offering the seller a fair price, you have their attention and haven’t insulted them with a low opening offer. I wince when I see new homebuyers, aided by inexperienced real estate agents, throw a low-ball number at a home owner and expect them to capitulate. The entire negotiation will end with two counter offers and be decided by an impasse on price. If someone could say “I’ll pay that price, but you give me the roof and carpet,” each negotiator has an opportunity to win.

My last bit of advice is that you pick a good experienced Realtor who isn’t going to pass you off to one of her newbie buyer’s agents. Begin your negotiations with her commission and keep in mind that you want her to work for you. This means if you beat her up too bad on the commission, she will email you houses from the MLS and call you every two weeks. Pay her a fair commission and make her earn it.

Buying a new home is great! You get to choose where your home will be built, add a sunroom here, third garage bay there and before you know it you are moving into your dream home. With all the options to choose from it is very easy to overlook crucial elements to your new home buying experience that could cost you greatly in both time and money.

Choosing upgrades with the lowest ROI or too many upgrades, period. - This is truly the most common mistake made by new home buyers who don’t consider the resale value of their home in the future. When buying a new home be sure to stick with the essential upgrades like two sinks in the master bathroom, high quality cabinetry and above all else, top quality padding under the carpeted areas.

Not examining your lot choice thoroughly enough. - A recent United Feature Syndicate by Lew Sichelman highlights some very important aspects to choosing a lot for your new home to be built on. Among them are: terrain, noting that people psychologically feel more secure looking down at the street rather than up, location and lot shape which can affect your surroundings including the possibility of facing the rear of a neighbor’s home.

Finding communities first, vitals second. - When you are buying a home you have to shop differently than you would if you were buying a car or shopping for clothes. To save yourself much heartache and frustration, be sure to hammer out your lifestyle requirements before even searching for a community to build a home in. For example, if you commute to New York City and have school age children you would want to find a school district that you approve of in an area with multiple mass transit options (train, bus, highway) and then locate new home communities within close proximity to both.

Overlooking the “inspection” clause in builder contracts. - A dirty little secret in the new home industry is the fact that some builders, national builders included, send out contracts with a clause stating that they don’t allow home inspections by an independent, third party home inspector until after you close on and own the home. They offer to do a walkthrough of the home with you before you close but chances are, unless you are a licensed home inspector with many years of experience, you won’t notice any red flags beyond the superficial.

Not using a buyer agent. - When looking for a new home, be sure to find a buyer agent who specializes in new homes. There are numerous important steps when buying a new home that a new home buyer agent will be prepared to work with such as price negotiation, lot choice, researching future development around the community and the pros and cons of building materials your builder will use in the construction of your new home. At present, the buyer agent’s services are paid for out of the builder’s marketing budget.

Using the builder endorsed financing company out of convenience. - Many large builders have their own in-house financing company and they often offer incentives on their products by tying in the use of the incentives to financing through their in-house lender. In some instances you will find that the builder’s in-house lender financing and incentives will cost you more money in the long run than if you had financed your purchase through an outside lender. Rule of thumb: Always check your financing options with the builder’s in-house lender, a mortgage broker and a loan officer for a direct lender before committing.

Believing everything you read in advertisements. - If it looks too good to be true, it probably is. Always verify everything you read in real estate advertisements including newspaper ads and the community’s standard features list. Aside from the obvious typographical errors that occur I have also seen blatant false advertising. For example, I have seen new home community literature advertising the community’s short “less than an hour” drive to New York City despite the fact that it would take at least 90 minutes on a good day from that community.

Buying a new home is a wonderful, dazzling experience that will cater to your every need. By using reasonable care and professional guidance you will enjoy many great years in your new home and reap substantial rewards from your diligent buying efforts when selling your home in the future.

This year Californian home builders are pulling up stakes and moving on. The number of new house starts planned for 2008 is the lowest number planned for over 50 years. Before you think this must spell out more doom and gloom for California - think about it - it is good news!

It means that the inventory of homes on the market will not be inundated with new properties and all the incentives that can be offered with their sale. New homes are proving more difficult to sell, perhaps because most people seem to prefer to buy an established home. Of course, the favorite is still a new home, but not a brand new home. Why is this? What are the advantages of buying a home has already been lived in?

The idea that everything in the home is brand new and pristine can be offset by the fact that you have to traipse through mud to reach your front door and arrange for land fill and diggers to level out your garden.

A new home is inevitably more expensive than buying an established home and you often have to add on the price of appliances and finishes. A spokesman for one of the larger home builders in the country compared the prices recently. A new home is reckoned to be more expensive than a fifteen year old home, but it will offer more amenities.

Today’s brand new homes are mostly being built bigger, although with the energy and environmental situations this may soon change. In the eighties and nineties homes were still being built to around 1200 square feet, whereas in 2008 the average square footage was nineteen hundred.

The vogue in bathrooms has also changed, with homes jumping up from being built with only one and a half baths to sometimes as much as three bathrooms and one of these often being an over-size bathroom.

Brand new homes come with wiring for multiple phones, multiple technology points that are secured and everything is often concealed in the walls during construction. The price may be higher, but it may also reflect value.

However, buying an established home does have advantages, one of them being the mature neighborhood. You have no need to worry if the undeveloped land nearby will turn out to be a skate boarding arena, because the whole area is already developed.

Another joy that can only be appreciated by those who have experienced the alternative: the yard is landscaped. It may sound like an exciting challenge to transform heaps of mud, weeds, slopes and stray concrete into a horticultural dream, but it doesn’t come without a few back aches!

Other plusses are that your appliances are already in place, the neighbors can help you with ‘local’ questions and you do not have to worry about ’settling’ cracks.

You also have a better chance to negotiate a good discount with a home owner, whereas a builder has boundaries that usually limit his discretionary discounts. His home was built reflecting current labor costs, whereas fifteen years ago wages were lower.

Whether you choose new or established, with these low mortgage interest rates and lower house prices, the idea would be to just BUY before prices and financing all jump out of your reach!

Arizona residents enjoy little rain, many months of great weather and tons of inexpensive real estate. These factors, and many others, have helped Arizona grow over the past two decades. Currently, Arizona has a population of more than 6 million and is experiencing annual growth of more than 100,000 people. This continued growth causes a need for thousands of new homes and hundreds of new communities. The competition between home builders to provide home buyers with quality homes at affordable prices has left Arizona with stunning communities in great locations.

New Homes in Arizona are affordable and can be found throughout Arizona. National and local home builders have made it possible for home buyers to purchase single family, condominium, custom or active adult homes that meet any budget, need or want. These homes range in size and begin in the low 100s. For the luxury home buyer, Arizona is home to numerous multi-million dollar opportunities in several different cities.

Arizona communities are amenity rich often having several parks, walking trails, bike paths, basket ball courts, volley ball courts and community pools. Master-planned communities in Arizona feature the many amenities found in traditional communities and much more. Within master planned communities residents will find a variety of new Arizona homes from several home builders along with large community centers, schools and commercial centers. The competition among home builders has left Arizona residents with value and beauty. Arizona residents can find attractive Arizona new homes in Metro Phoenix, Metro Tucson, Yuma and much of northern Arizona.

Ted Gaurnero asked:


Like many aspects of real estate, buyers need to weigh out whatever valuable information they can muster, and in the end decide on what is their preference. This being said, although preference can tell you a lot, there are aspects to the purchase of both new and old homes that should be considered.

The key is to have a clear idea of what you want and need in a home- to heck with the Jones’. Everybody will have different needs and preferences and all you can do is strive to figure out your own.

One aspect to a solid purchase in real estate is of course, “location, location, location”. Keep in mind that older homes are likely to be located in more established neighborhoods, often with proximity to a town’s center. These areas usually offer established landscaping with mature trees, gardens and in some cases these older homes sit on much larger pieces of land. Subdivisions and newer homes have a tendency to be located on the outskirts of a city with homes on smaller pieces of property, and with less established landscaping. Just one thing to consider as you look into the older home/new home dilemma.

Older homes do often, but do not always have the advantage of being more affordable than newer developments. As the cost of land surges it becomes more and more expensive to build new subdivisions. This being said, the ownership costs of a newer home are certainly more predictable and obviously lower. Also, some older homes of character heritage will not always be less expensive than a new home given their niche market demand.

A subdivision neighborhood tends to be more homogenous and offers very particular elements that may suit your needs. Many subdivisions are suited specifically for families, while some are specific to retirees. Older neighborhoods tend to be more about diversity, offering homes with a blend of older and younger folk, families, retirees and renters alike. Again, your preference depends on what you’re looking for.

If you’re an amenity junkie, then the newer subdivision lifestyle may be the best choice for you. Many of these complexes offer clubhouses, playgrounds, swimming pools, internal bike and walking trails. While most older neighborhoods do not offer such things, many will have the advantage of proximity to urban shopping centers and amenities that are located in or near the downtown core.

Lower building costs in the past meant more home for your money. Many older homes are built on a much larger scale by today’s standards. On the flip side, this can be a real energy drain unless the older home has been fully updated to increase energy efficiency. Newer homes have the advantage of being built with new building materials such as glazed Energy Star windows, improved insulation, and oftentimes newer homes are equipped with geothermal systems which are highly efficient and cost effective conditioning systems.

“Character” is one of the major draws to any older home. And the fact is, many new homes cannot reproduce the specific character of homes from a given era. Well, it’s not so much that they can’t, but the cost in many cases would be very high. And, if you’re looking at subdivisions, these new homes are generally built based on a template. Many newer subdivisions offer some elements that have some character reminiscent architectural design. There are whole subdivisions built in Cape Cod style, or others that include certain character elements like crown moldings, or over sized windows. But a house of a particular era, truly has a character that cannot be replaced or reproduced. If this is what you know you want, than by all means go for it!

What newer homes can offer is customization vs. character. If a house is in the process of being built you will have the option to pick your own color schemes, cabinets, flooring, appliances and there are often may upgrade options available as well. With older homes you are relying mainly on the previous owners tastes, unless you are prepared to throw a lot of money for upgrades and changes.

So take all these elements into consideration as you weigh out practicalities and also your preference towards a new or and old home. And, to end the tale of the dilemma between old and new, here’s a little story:

A young couple was looking to purchase their first home. In the beginning of their search the couple had in mind a true character home in the old city quarter of a medium sized town. They had a specific budget, and were looking for something of at least 1500 sq feet and in the age range of 70-100 years old.. Well, soon into their initial walk throughs the couple realized that the majority of these homes had some serious draw backs. These were mostly structural, electrical and energy concerns. They looked at some beautiful houses, but in order to get these puppies up to snuff they’d of required major monies worth in repairs. Suddenly their dream of owning a character home shifted as they added other practical concerns. The couple ended up purchasing a west coast style home built in 65′ that needed some updates but that was structurally sound and needed no major overhauls. Basically their definition of an older character home shifted about 40-50 years into the future! But, most importantly they were very happy with their purchase although their scope had shifted.

So, yes, know what you’re looking for as you begin your home search, but remember there is no harm in being open to shift gears a bit as you learn more about the older and newer homes available in the market you’re looking in.

Katherine Kerr Gleason asked:


On the surface, buying a foreclosed home seems like a great idea. You cant beat the price, theyre often only 2-3 years old, and they present an opportunity for buyers to acquire a larger home in a nicer neighborhood than they might otherwise be able to afford.

Then the ugly truth surfaces.

What most prospective buyers dont know are the risks associated with the purchase of a foreclosed home. Here are just a few:

Your financing options may be limited. If you are looking to finance your new home via an FHA loan, be advised that certain foreclosed homes do not meet the minimum standards for FHA financing. Homes missing ranges, flooring, and homes in need of major rehab will not qualify.

Get ready to bring cash to closing. Not only are seller contributions limited (if there are any at all), but the property youre looking at may be behind on taxes, HOA fees, etc.

Dont expect a warranty. That steal of a foreclosure comes AS-IS. Whatever problems the home has now, or in the future, are the new owners responsibility.

Be prepared to get dirty. Once youve purchased that foreclosure from the bank, you get the chore of returning it to habitability. If youve never walked through a foreclosure property, you might be shocked at what this entails. Weve seen bank-owned homes with missing appliances, flooring, A/C units, broken windows, missing doors, holes in the walls, stolen copper pipes, ripped up landscaping, pest infestation, and more. And this doesnt include the smell.

What you want doesnt matter. The bank doesnt care about your schedule. The bank doesnt care about your title company preference. Be prepared to close when and where the bank tells you to. And be prepared for changesthe bank has no problems with moving up (or delaying) your dates.

Surprise! Surprises at the closing table are never a pleasant experience, but its not unheard of for previously unknown issues with the property to pop up at closing.

So, what exactly makes your investment in a new home better?

THIS HOUSE IS ALL YOURS! Why be stuck with what someone else liked? With a new Montalbano home, you pick the flooring, countertops, light fixtures, you name it. At Studio Montalbano, our design experts will help you create the home youve always wanted.

THE WARRANTY. Every new Montalbano Home comes with a two-year builder and 10-year structural warranty. We stand behind the homes we build so you can purchase and move in with confidence.

SELLER CONTRIBUTIONS. Builder incentives are available to help with closing costs or interest rate buy-downs. Why bring more money to closing than you have to?

YOUR HOME IS READY. At Montalbano, you have TWO opportunities to walk your home in the days before closing to make sure that everything is as it should be.

At the end of the day, the choice is yours. But being armed with the right knowledge will help you make the decision thats best for you and your family.

Tim Dillard asked:


If you are looking to build a new home in one of the many Houston gated communities, then you will need to find a reputable new home builder. In Houston, most of the top places to live are gated communities, which are also known as master planned communities. These neighborhoods in Houston are known as some of the top places to live in America. There is a wide variety of master planned neighborhoods in Houston including golf course communities, water park communities and gated communities. These communities are made for all kinds of demographics of families - from families with kids to singles and retirees.

If you are going to build a home in a Houston gated community, you will want to talk to the administration of the gated community you will be building in. Each Houston gated community will have a set of standards that they adhere to for buildings and home in the area. These standards are what help to maintain the Houston gated communities as the top places to live. In Texas, these standards will apply to all Houston luxury home builders and a good builder will look into the standards that have been set by the community association or administration.

When you are looking for new home builders, in Houston there are a few things that you should look out for before you hire one. You should ask them if they have any references for homes they have built in other Houston gated communities, and then ensure that you call the references. You will want to ask them questions about the craftsmanship and work that they did in Houston. New home builders will be judged by the quality and if it was done on time. You should also inquire about the home being built and the customer service that was offered - if there were any problems, did the contractors come back to fix the problems?

You will also want to ask the home builders if you can come to one of their existing work sites. From that, you will be able to tell a lot about the company and their building standards and practices. Look to see if the work site is clean and if the workers look organized.

You will want to ask your custom home builders if they provide a warranty with the work they have done and the homes they have built. Ask if they provide after service for any problems that may arise with your new home.

You should also inquire about the other Houston luxury homes that the builders have built in the past and if they have built any in the top gated communities in Houston, primarily the one that you are interested in building your home in. This will enable you to look at some of their finished products as well as inquire about their experience with building luxury homes in Houston gated communities. Of course, one of the major questions you will want to ask of your new home builder in Houston is their costing.

You will want to get a few quotes of prices for building your home, finding out how much each new home builder in Houston will charge you to build the home. Ensure you ask if that includes the finishing of the house, or what extra charges you can expect to incur while building your house.

You will need to find out what kind of timeline the home builders can give on the completion of your Houston luxury home.

You will still need to check with the home owners association for the gated community you are looking to build in to ensure that the standards are adhered to while building your home, or you could end up facing a stiff penalty. Even if your new home builders promises to take care of it, you should still make sure you have a copy of it for yourself.

When you have asked the new home builders in Houston all these questions, then you can compare the rates and regulations of each of them in order to decide which one you want to hire.

Richard Soto asked:


With all the new construction happening in this country there is a real abundance of new construction homes available. The question is; are these the best homes for my dollar? It’s a difficult question to answer as there are definite pros and cons to new construction. The same also holds true for older established homes. In looking for a new home you would be wise to consider both in full before making any decisions. Buyers who take the time to educate themselves on all their choices are the ones who get the best deals and the ones who are happy with their purchases in the long-term.

Have you noticed that there is a lot of new construction in your given area? Have you heard anything positive or negative about the quality of the new homes being built. It would be nice to think that all new construction homes are fantastic in every way but unfortunately that is not always the case. Like any business there are those who will cut corners to make a few extra dollars at the cost of the customers. Always have an inspection done on any new construction home, and make sure that you choose the inspector. It is a reality that there are home owners out there who wish they had taken this step before buying a new construction home that turned out to be a money pit from day 1. Typical problems with new homes can range from shoddy materials to improper wiring and everything in between. The majority of new homes are well built by reputable builders but all the same you should always find out about the reputation and track record of the builder concerned.

Inspections are also a huge part of purchasing established homes, but for different reasons. While inspections on new homes are concerned with the quality of the materials and work done on the home, inspections on older homes are more concerned with the integrity of the home, its foundations and the workings of its interior systems. Older homes should also be inspected for mold, mildew and any other kind of moisture related damage. However, on the plus side, older homes usually have larger parcels of land and are in already established neighborhoods. This means that usually there will be more amenities closer to the home and already operational public services. The choice is yours, just make sure that it is an educated choice!

If you are in the market to buy a home, you have likely had trouble deciding between a new home and a resale home. It is a buyers market right now which means that there are several great homes to choose from for every home buyer. There are many advantages in purchasing a new home and just as many advantages in purchasing a resale home. This article will explore some of the reasons why you might want to purchase a new home.

A huge reason why many home buyers have opted to purchase a new home in recent months is because of the available incentives home builders are offering. In most cases, because of the large incentives, home buyers can purchase a new home for less than a resale home. In addition, home builders make purchasing a home from them easier because they offer down payment assistance or trade-in programs. Home builders have the money and ability to effectively communicate their home specials to the public, resale homeowners offering large incentives cant always tell people about them.

Another factor appealing to many home buyers is that a new home is just that, new. Most of these homes are located in new communities around new commercial centers and near new parks. Many home buyers like knowing that theyll be the first person, or family, living in the home. They like the feel of a new home with new carpet, new tile and new appliances. Many of them choose to customize the home to their wants and needs and like the ability to do so.

Home building trends change over the years, in most cases these changes lead to greater efficiency and a better use of available space. Most new homes have energy efficient windows, appliances and building materials that decrease energy costs and use, one example is better insulation. In addition, home builders discover ways to better distribute space such as the recent trend towards 10 foot ceilings or the introduction of a Grand room which is a combination of a Kitchen and Living room and allows familys more time together.

Buying a home is an exciting experience and can be overwhelming. There are several advantages to buying a new home and just as many advantages to buying a resale home. Each home buyer has different needs and wants, be sure that you explore all of your needs and wants before deciding on a home. The most important thing is that you and your family are happy.