If you’re jumping into the real estate market and wanting to build your dream house from the ground up, chances are you’re interested in learning how to source and negotiate with a home builder.
Of course, for such a large task your first thought is likely going to be “can I keep prices reasonable?” While finding the best contractor for your job including one that you are comfortable with, one major consideration is pricing. Read on for some tips on how to ensure you are paying a fair and reasonable price.
Understand typical costs of building
The first thing that you should understand and respect is that builders are there to make a profit. Builders provide a service, and this service costs money. Builders have access to trades, experience and skills that the average client does not readily have access to.
A good contractor should be able to outline what costs can be comfortably estimated, and those that are unknown. Depending on how you structure the contract, the builder may agree to a total price for the build, and in return provide you with documentation on what to expect for that price. Read more here if you’re in SoCal and looking to find a San Diego home builder
One smart option to get more value from an agreement from a builder under a fixed cost contract could be ask about potential upgrades and extras, while giving you some tidy additions that will increase the value of your home straight away. If you can negotiate upgrades – lighting, appliances etc – in the construction process then you will save money in the long run because you won’t have to shell out down the line to install the upgrades by yourself.
Check Out Financing Options
On projects as large and expensive as contrasting a new property, finding a suitable lender can be a tedious process, and you might be tempted to just go with the builders’ preferred finance option. While this may be on paper the best deal in the short term, check out the terms and rates offered for your repayments.
The flip side of that your builders’ preferred lender can offer you incentives and add credit to their offer to get you to stick with what they know. You can use these conflicting quotes to shop around and see if a lender with cheaper mortgage rates would be willing to add the preferred lenders’ credit offer to theirs.
Look At The Models
If you aren’t entirely concerned about having complete autonomy over your new home, ask to see the model houses on the builders’ lots. These homes have been built to show off the quality of the craftsmanship and are often built in higher end neighbourhoods as another tactic to attract viewers.
They are also heavily discounted because of their use as display homes, so by registering interest in these properties you can keep a chunk of your savings in your pocket while still having a well-built, brand-new home. You could also use the savings to splash out on some of those upgrades to make the place feel more like your own.
Remember, shop around when looking at builders, finance, addons and more. You could save big or reinvest in your dream home.