Browse Forums Building A New House 1 May 30, 2012 10:57 am Hello everyone... I've got a block settling in November and am going through the process of finding a builder... JG King suits my needs the best at this stage. I'm looking at the Oberon w/Cruise facade. Being that it is currently without doubt a 'buyers market', I'm wondering what people manage get away with beyond the extras offered by builders at present. Is there a general etiquette existing in this situation? We all know that no one pays the asking price for a new car as an example, so... is a new house any different? People in my circle are generally pretty hush, hush about this type of thing, and to be honest I never really hear much on the subject. Thanks! Re: How much 'room' is there when negotiating $ on a new bui 2May 30, 2012 11:12 am From my experience the extras the company offer you are pretty much as you see it. Sometimes, depending on timing, you might be able to get an offer that has already "expired"- as a sweetener to sign. Or they will throw in something else as well. Beyond that you pay extra because of the non standard items you want. Do a comparison with each builder as to what is standard and what is not, some builders' inclusions are much better than others. And this is where they really make their money, other than that the cost of building has not much margin. How much 'room' is there when negotiating $ on a new build? 4May 30, 2012 11:25 am Just out of interest after something someone I know said, and sorry to hijack your thread marto. Would companies offer discounts etc if you paid cash instead of credit/loan? I know probably a very, very rare situation, but it's had me wondering. Re: How much 'room' is there when negotiating $ on a new bui 5May 30, 2012 11:34 am This is the way we got an expired offer for kitchen upgrade, becos we are paying cash...But also becos of the timing, offer had not yet expired but did expire during our wait time for titles, but was written in previously. As you say very rare. Re: How much 'room' is there when negotiating $ on a new bui 6May 30, 2012 12:12 pm With my build I added 10k worth of alterations to the base price. The builder would give me a 4k kitchen upgrade for free if i would sign with them. So for me about 2% room to move with the price. Project builder margins are not that high I would think Re: How much 'room' is there when negotiating $ on a new bui 8May 30, 2012 12:38 pm Treeseachanger From my experience the extras the company offer you are pretty much as you see it. Sometimes, depending on timing, you might be able to get an offer that has already "expired"- as a sweetener to sign. Or they will throw in something else as well. Beyond that you pay extra because of the non standard items you want. Do a comparison with each builder as to what is standard and what is not, some builders' inclusions are much better than others. And this is where they really make their money, other than that the cost of building has not much margin. My interest is in where the market is currently at, and where it's likely to be towards the end of 2012. The first home owners grant is all but ending in June (Victoria), which is the market that's been holding the new home industry together more or less. I'm predicting that the only thing likely to draw buyers back will be significant rate cuts into 2013. If buyers were ever in the box seat, it's going to be the next 6-12 months? Prices on land / new homes haven't seemed to fall as much as existing home prices though, which has got me thinking that maybe there's a little room to haggle? I just don't want to over step the mark though I guess. JG King have already agreed to change their current deal (+18k of extras), if a future 'special' is more beneficial to me pre-November, which is great. Re: How much 'room' is there when negotiating $ on a new bui 9May 30, 2012 12:48 pm I can't see how builders can safely reduce prices, given that to some degree they're crystal-balling in the first place. Sure they've tried to quantity-survey everything to the n-th possible degree, but there must be all sorts of unknowns that they have to absorb & which mean they just couldn't afford to agree to a lower price. This is as-opposed to, say, a car dealer who knows exactly what the car has cost them to bring to sale. They can, as has been suggested, reduce ridiculous mark-ups on spec upgrades; but I can't see them being able to move on anything else (and they're not going to agree to "give you a discount in the end if it turns-out they made more profit than they thought they would" ). Re: How much 'room' is there when negotiating $ on a new bui 10May 30, 2012 1:12 pm Builders are a bit different to manufacturers. They don't have big factories and 90% of their labour cost is subcontracted rather than directly employed. If thing go quiet the subbies get laid off at no cost to the builder. Although they always like more turnover they probably aren't as likely to sacrifice profit to get it as manufacturers or shops. This means that its not like The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: How much 'room' is there when negotiating $ on a new bui 11May 30, 2012 2:15 pm I got a cash discount with my builder and a couple of extras free. Not a big cash discount but better than nothing. I went in prepared with Two other quotes for similar size and spec homes from other builders that were cheaper. Remember people if you don't ask you don't get 2 Re: How much 'room' is there when negotiating $ on a new bui 12May 30, 2012 2:19 pm Marto54 avthomas Marto54, are you based in melbourne? Surf Coast(Bellarine Peninsula). If you are interested I can introduce you to the builders we are building with. They were very flexible with the plans and their standard inclusions were of higher standard than the others. Not sure whether they build in your area but no harm in asking and checking them out. If you want more info pls PM me. Re: How much 'room' is there when negotiating $ on a new bui 13May 30, 2012 6:40 pm I reckon many people don't ask for discounts, and aren't prepared to walk away early if they don't like what they hear. The one thing I have seen is that many builder seem to be offering very similar products, and you are crazy if you don't shop around. You don't need to go far to find a similar offering at a cheaper price. Re: How much 'room' is there when negotiating $ on a new bui 14May 30, 2012 7:55 pm daveinthehills I reckon many people don't ask for discounts, and aren't prepared to walk away early if they don't like what they hear. The one thing I have seen is that many builder seem to be offering very similar products, and you are crazy if you don't shop around. You don't need to go far to find a similar offering at a cheaper price. True, it's hard though when you want a coastal style facade, which is preferred according to my estate guidelines and to my taste. Most of what's available from the 'name' builders (non-custom) is obviously for the Melbourne market, where it seems that modern, coastal look isn't in favour. It is tricky. I've found that Simmonds, Metr!con and Burbank have cheap base prices, but their standard inclusions are of terrible quality, which in-turn require more upgrading. Very much wish I could afford a custom builder this time but that'll have to wait. Re: How much 'room' is there when negotiating $ on a new bui 15May 31, 2012 11:00 am The builder we are building with are very flexible. They worked with us to get the plan to our liking and did not charge for the customization and priced based on the total squares. They are a volume builder but they are willing to modify plans to suit our needs. Atleast, that was my experience with them. Re: How much 'room' is there when negotiating $ on a new bui 16May 31, 2012 1:04 pm The other thing to consider, if your builder won't give you a discount is to try to negotiate a clause in your contract to allow external contractors to certain parts of work. For example, I'm thinking of getting data cabling, and I know I can get it done cheaper than most builders are charging. Most volume builders usually don't let you do this, but again, no harm asking, and they will probably want you to sign disclaimers and provider details/licences/insurance of the external contactor. Re: How much 'room' is there when negotiating $ on a new bui 18May 31, 2012 4:05 pm humble In this market.. I would be going stupidly hard. And if they dont budge, walk away. Given what I've seen in the last 3 months or so (which is the amount of time we've been properly researching/investigating, and with me not having looked at building before), what you've said here completely ignores aesthetics - which IMHO are super-important in building a home (as opposed to building a house you're planning on renting-out or selling). Re: How much 'room' is there when negotiating $ on a new bui 19May 31, 2012 7:14 pm trayracer The other thing to consider, if your builder won't give you a discount is to try to negotiate a clause in your contract to allow external contractors to certain parts of work. For example, I'm thinking of getting data cabling, and I know I can get it done cheaper than most builders are charging. Most volume builders usually don't let you do this, but again, no harm asking, and they will probably want you to sign disclaimers and provider details/licences/insurance of the external contactor. Our builder allowed 2 external contractors, which is pretty good. Pity they wouldn't do that for the electricals though! Re: How much 'room' is there when negotiating $ on a new bui 20May 31, 2012 7:53 pm Wow this thread is a bit scary, looks like there aint much hope! I'm about to enter the negotiation part with a project builder and was hoping for free inclusions to at least 5% of the total cost (approx $600k build) ... it sounds (from the comments above) that I can expect about 1%! 7 12075 I thought this would be a popular question but I haven't been able to find any similar posts. Perhaps I'm wording my searches wrong? 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