Negotiate on land price with a builder?

In your search for a new home you will probably come across a situation in which you may be able to purchase a home site and have your home built by the same person. This will often be the case when dealing with a volume or semi-custom home builder and can happen with a custom builder as well.

Question:) “Can I negotiate the list price on a home site if the builder I’ll be using owns the lot?”

Answer:) Absolutely. In this business everything is negotiable including land prices. The worst thing that could happen is the builder/land owner refuses to come down off his asking price and you’ve “lost” nothing. On the other hand you may very well end up saving a good amount of money.

Very often future home owners are hesitant to attempt a negotiation with a volume or semi-custom home builder. Don’t be shy! You’ll never know until you ask the question. Every negotiation session and situation will be different. (Here’s a quick guide to negotiation I found online - Home Buying Negotiation Help.)

If you are trying to figure out a good offer price do some research on land prices in your area online. Or check around for a local real estate company website that shows recent sold prices on comparable land. By comparable land I mean find a few recently sold home sites that are similar in size, view, location and amenities. The ideal comparable piece of land is usually the home sites right next door to the lot in question.

It’s always a good idea to have someone working for you in any real estate and/or home building situation such as a real estate agent or consultant and, without a doubt, an attorney.

Another thing to consider is you are looking to have this builder sell you land and build you a home. That’s something that a builder is going to take into consideration when negotiating a deal on a piece of land (I know I do!). This builder may be more eager to negotiate because he wants both “sides” of it - to sell the land and build the home. Look at that situation compared to you simply purchasing the homesite from the builder and having someone else build your home. There is less for the builder to “lose” in this situation.

Long story short: do not be afraid or hesitate to negotite on any and all real estate and  home builder transactions. I’ll leave this one with a couple of good quotes…

“Anonymous
The single most powerful tool for winning a negotiation is the ability to get up and walk away from the table without a deal.”

and…

Lance Morrow
“Never forget the power of silence, that massively disconcerting pause which goes on and on and may at last induce an opponent to babble and backtrack nervously.”

I found these and a tons of negotation tips over on this website - Negotiation Tips. Thanks!