Ways To Save On Your New Construction Purchase

It may seem impossible to get any kind of deal in this aggressive market – especially when buying a new home from a builder. They seem to be holding all the cards right now don’t they? Not so fast, there are some strategies you can employ with your agent to try and save a little cash in your pocket…

“The early bird gets the worm”

A significant part of the savings with new construction typically happens at the beginning of selling a new neighborhood — as in, being one of the first buyers to write a contract. Prices are their lowest on lots and floor plans the minute the builder kicks off sales, and they only have one way to go from there — up.  

The best deals are the first deals, and indecisiveness can and will cost you money and perhaps your choice of lot and floor plan if there are restrictions on how many homes of a particular model can be built around each other on a street or particular section of one (so that every home is not the same). 

Are the you hoping for that elusive cul-de-sac lot with a spectacular view or that highly coveted lot with no one next door or across from you? Then better be ready to jump out of a parachute or be available to come in on Zoom, Skype or whatever videoconferencing app you to make it happen. 

Waiting a few days may change the entire scenario. The “I’m not quite ready yet, but I can check it out next time I’m in town in a few weeks” or “I want to wait to get my friend over to check it out first” response may result in a huge price increase on both lots and the base prices of the homes. Not to mention, by that time, the home you want might not be available at all. 

The importance of acting immediately is imperative in this competitive market. Prices can change in a matter of days, and site agents often don’t know when a price increase may be coming from their management. The same lot and homesite that you were pondering over the weekend might suddenly cost $20,000 more a few days later.

Options, incentives and closing costs — oh my!

It can be easy to become overwhelmed with hearing various promotions being bantered about — for example: the builder is currently offering x amount that you can use to reduce the price or toward options and upgrades, and a certain amount toward closing costs if you use one of their preferred lenders.

Offerings wax and wane based on supply and demand, and if the pace of sales is brisk, the builder will likely pull back on incentives and raise prices at the same time. 

Builders may offer more generous incentives at the start of a new community, in an effort to get some signed contracts. However, they have the ability to quickly raise prices. So, it’s possible that the $25,000 incentive the builder was offering when you visited a week ago may no longer be available now.

With respect to closing costs, if you use the builder’s preferred lender, you will typically be able to save some cash out of pocket toward closing costs that you otherwise would have to come up with.  

Keep in mind that the interest rate may be slightly higher when using a builder’s preferred lender versus financing with your bank of choice, but you will save more out-of-pocket costs in the short term.  

You have to weigh the difference in the mortgage payments between the builder and an outside lender compared to saving on closing costs, and see how long it would take you to recoup the out-of-pocket costs.

When dealing with a builder, you should take all the incentives you can and avoid a delay in making a decision. Otherwise, the price will not only increase, but there might not be any incentives to take advantage of.

Managing the bling

When it comes to options and upgrades, this is where you can easily tip the final purchase price far beyond where you intended to be. If at all possible, preview the design center ahead of time to get an overview and understanding of the different levels of finishes and features before the actual appointment. 

A design appointment is usually only a couple of hours (or may be accomplished in a couple of meetings), but you are typically under a time crunch to decide a lot of critical finishes and color schemes for your home in a short timespan. It can be very easy to succumb to the pressure of the moment and pick things that are unnecessary extras and push you over your allotted budget.

Certain items are better off being done through the builder, and some items are best accomplished outside of the builder. At the time of the contract, it makes sense to commit to spending money on cabinetry and countertops as well as structural upgrades such as extending a covered lanai under the roofline or adding some extra square footage in the garage.

Depending on the kind of flooring you are interested in, going with tile in the kitchen through the builder may make sense. However, having carpet put down in the living, dining and bedrooms may be a better option if you want to splurge on wood floors, luxury vinyl plank or other flooring of your choice and want to be able to shop outside of builder options to find a material and installer that best suit your budget.  

There is typically a significant markup on certain kinds of flooring with builders — especially when it comes to wood floors — and you may find better pricing outside of the builder’s design center. 

That said, there’s usually some hassle involved in getting this done after closing instead of just being able to move right in, so you have to determine if that’s doable for their situation and timeline.

For items like tile backsplash, crown molding, built-ins, custom window treatments such as plantation shutters, shades, gutters, fencing and front door glass inserts, going through vendors of your choosing after closing will likely be cost-effective. 

Ditto for light fixtures. Go with the basic ones offered, and do your shopping for preferred styles on your own after closing. The same thing goes for having the builder add a paver patio, firepit or summer kitchen.  

Also, there is always a bit of a markup when it comes to adding a pool through a builder. However, you are often doing that for the convenience of having it handled during the construction process versus having your yard ripped up after closing and trying to oversee it all yourself, which can often be a huge mess. 

There can be such a thing as too much icing on a cake, and the same applies to putting upgrades into a home.


Although the real estate market has not slowed down, under more normal post-pandemic circumstances, there are typically busier and slower times in each market. Determine when those are, and try to time your purchase around a slower time if possible. Your real estate associate can help with that.

Typically, the end of the year has always been a more opportune time to buy new construction — particularly inventory homes — as builders are more motivated to clear existing inventory off their plates to free up capital to build new homes.  

If a builder is a publicly traded company, they are often more motivated when their end of quarter or calendar year approaches, as there may be certain sales quotas they have to hit within each region. Deals are often sweetened during these times, however the choices of available homes and lots may be limited.


Every new neighborhood has a few leftover lots that are typically some of the last to go. If they haven’t been sold to a buyer to build a home, they will usually spec them out. The house may be gorgeous and highly sought-after model, but the lot may be a challenge in some way to work with. 

It could be on a busy corner with heavy traffic in and out of the neighborhood. It may lack privacy or have no views. It might also be small with little outdoor space to do anything with — like, adding a pool, a patio area, a firepit or a summer kitchen. 

If your can see past those things, you may be able to negotiate a better deal on something like this versus a lot that may be more conforming and in extremely limited supply in the neighborhood.

In other words, the builder may bend over backwards to sweeten the deal, reduce the asking price and include more options and incentives to get this property off his or her plate.

Title and closing fees/choice of services

It may be possible to negotiate to choose the closing and/or title insurance provider if you aren’t using the builder’s preferred lender.

That said, this can be tough to do. Builders typically tie the incentives they offer with the condition of using their own closing and title services. While they may let buyers choose their own, it will likely negate closing costs being paid on their behalf, which could cost you more money in the end.  

Depending on what is customary in your local real estate market, there could be some closing costs that are typically paid by a seller on a resale that a buyer has to pick up on new construction, but a builder closing cost incentive helps offset them. 

Even with a cash purchase, a builder may offer to cover some closing costs which are tied to the use of their closing and title services. Ask your agent to check with closing providers they regularly use to get some competitive quotes. Give those the builder’s closing and title vendors to see if they will match the fees you present. By doing so, you may be able to save on closing fees, owner’s title insurance as well as a survey.

While sheer supply and demand is making it tough to negotiate much beyond what a builder is offering, understanding how to navigate the process may help you time your purchase appropriately and save some money wherever you can.”

Source: Cara Ameer

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