In my experience people are better able to help you if you let them know what you want. If what you really want is the plan you like with your selected finishes on that piece of property, I'd ask about that.

If the builder says it would cost more than you want to pay, then you'll know that and you can evaluate whether you want to build some version of the advertised house, or use different finishes, or just move on. Who knows, the builder might say, I can't build you that plan on this lot at that price, but I know of a different lot where I could build you that plan at that price. At least everyone will understand your goals.

Good luck!

"The house the builder is advertising is at the upper end of our price range" And yet you want a home with MORE square footage and very specific non builder grade custom items. That completely belies your statement that "We are finally ready to start the process." If you want a builder to take you seriously, then you need to make your want list smaller, the home smaller, and your skin in the game larger.

Live_wire:
Yes, I have a list of wants, including more square footage (approx 550 sq ft on an upper level utilizing dormers- not even a full 2nd story) I don't yet know the details of what the builder is offering. It is possible that my wish list may not be so far off from what he was planning in doing in the first place. I posted my question because I wanted to now how best to NEGOTIATE with a builder, because it seems to me that there is probably some room for negotiation. And I don't know why you are assuming that the house is going to be builder grade. At $600,000 it's not going to be a high end luxury home, but not a basic starter home either.

You are wanting as much as you can for the current advertised price. The problem is the current advertised price is not for the home you are wanting. It's unrealistic to think you can negotiate a totally different, beautiful yes, but, much larger plan with the same cost.

The process is usually to bid out your plans. I'd advise to bid as many as you can. In our area we submitted 5, only 3 came back with price. There is some negotiation process from there but it's usually based on finishes and availability of the builder to find deals or offers.

Good luck, I can see why you like the other plan. I think your cost will be much higher than the one he builder is advertising unless you are ready for cuts rather than additions to the advertised sqfootage.

olivesmom, if your heart is set on that plan, my suggestion is to just directly ask the builder what price to build your desired home on the desired property. If it is in your budget, great!

If it is too high, ask that builder and a few other builders to ballpark how much to build your desired home assuming a level lot (ask each of them to include soft costs in the number).

If there is a consensus, add 25% to that number. If you get a range, use the top of the range.

Then you can figure out how much of your budget is left for the lot and you can go out and get one!

That is basically what we did except we did not have a plan picked our in advance, just a general idea of our desired BR/BA, house type and level of finishes.

I think that much of "negotiation" is having other options so that you can walk away if you aren't getting what you want. The more questions you ask, the more information you will get, and you will have a better idea of what your other options are. The same is true for the builder -- if there are other offers for the advertised house at the advertised price, there's no incentive for the builder to negotiate with you. Good luck.

We can't just bid out the house. We need to use a builder that owns the lot and is offering to finance the construction. There's this builder and with his one particular lot that I like the most. There is another small builder offering the same sort of thing, but I do not care for his lots as much. So if a want semi-custom new construction home, this is the route we have to take.

The builder is open to other plans. I do see how the plan I like will cost more, the main level is larger than the main level of plan # 1. We'll see. I've contacted the builder and requested more information on finishes, fixtures, appliances, etc. I've also expressed interest in this specific plan. Let's see what he comes back with.

Like everyone else I want to get the most for our money and I need to go about it in a way that doesn't annoy the builder.

The plan you want with the additional square footage is at least 20% more costly to build than the plan the builder is offering, if all things were kept equal in the finish level. Maybe more, since you're adding more dirtwork. With tweaking finishes, you'd be looking at 30%-50%, depending on what those tweaks might be. You're not going to "negotiate" a way into that without moving the build to pretty far into a rural area in a lower cost of living area than Seattle metro.

I am going through this exact same process, except we are framing now. We "tweaked" a spec house because the builder was completely unwilling to use our plan - and that was basically a frank betz one, very simple, that we were looking at with some minor changes.

He allowed us to make a few changes to his plan to make it work for us, but it still isn't ideal. BUT he owned the lot and the lot is big enough and in the right location for us. We looked for an entire year for lots and could never find one, else we would have designed our own house and bid it out.

Now I wish we had just held out for a lot. This builder builds pretty nice high end homes, but in ours he is calling it "custom" and since we have already bought it he doesn't have to impress potential buyers. We did not specify everything we wanted, assuming he would put the same toilets in our house that he puts in every house he builds. Big mistake. On the toilet issue, he was planning to put ones with plastic handles (that really look like cheap rental house toilets). We only found out because the plumbing rep told us and suggested we figure out something else, quick!

Ours is a pretty expensive house and everywhere they were planning to put in lower than builder grade products. It is has been a constant fight to get them to put something acceptable in it.

My point - on a spec house, the builder knows how much they will make, if the house sells for close to the list price, and they are counting on that. They will make as much on your house, so make sure that if they agree to build what you want, it is truly what you want. That requires you to specify *everything* in advance-quite a lot of work on your part for a quote, but totally worth it, imo.

Builders assume you will end up paying 5-10% in overages, it seems, so make sure everything is known up front and IN WRITING" before you move forward!

Okay I'm meeting with the builder tomorrow. As it turns out the plan I like will not fit on the listed lot. The lot is almost three acres, so it must be due to slope or buffers. He does have another lot which he said will work. I plan to find out more at our meeting.

So I think the plan is to first figure out which lot, what house plan and what base price. Then as sweetfish suggested, try to negotiate upgrades.

Why don't you look for property that is not tied to a builder, so that you can get what you want, including competitive construction bids? Why limit yourself to one builder who owns the property and builds on them? In this case, what motivation does the builder have to do anything other than what he is used to?

Good luck with your project.

Exactly as virgil mentions, why would he feel he needs to negotiate if he holds the entire deck? You lose your negotiating ground when there really is no alternative for that house on that piece of property!

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This post was edited by millworkman on Fri, Aug 30, 13 at 11:30

olivesmom wrote: "We can't just bid out the house. We need to use a builder that owns the lot and is offering to finance the construction."

I read that to mean that there is some financing constraint that would prevent olivesmom from going the "regular" route of bank financing a custom build that is competitively bid. I easily could be misinterpreting that comment.

olivesmom, if you are able to provide more information, that would better help the folks here to help you.

Oaktown: Yes, you are correct with the financing constraint we are dealing with.

Virgil: We are unable to obtain a construction loan at this time, but we are able to get a regular mortgage. Our only option for new construction then is a situation where a builder is willing to carry the construction loan. In my area there are two small custom home builders who own lots that are willing to do that at this time.

Millworkman: The piece of property isn't the only one available. And there is one other builder we could use. Or we could just decide to buy existing, or even not buy at all. True, the builder doesn't have to negotiate with us. But homes in this price range aren't exactly flying off the shelves here. Right now the listing is a presale and he indicates that without a buyer he will begin construction next month as a spec home. Seems to me it might be better for him to have a committed buyer and maybe give up some profit rather than hoping it sells once completed next summer.

I believe I live in your general area. King County right? Around me, $600K houses are flying off the shelf. I would just tell the builder what you want finish-wise and see what he says. You hold the ultimate card but there are enough other buyers out there that they won't likely wheel and deal much.

Also, I have unconvential finances due to being self employed. We were able to get a building loan through Homestreet even though it took a lot of legwork. We also have to hold a large reserve of cash but they did more for us them some other banks were willing to do.

MFatt: You must be closer in. I'm in the maple valley area. I've noticed that in my area homes under 300K (non short sale and in good condition) have been selling very quickly, some in hours of hitting the MLS. The market has definitely picked up, but I still think the market is smaller for homes in the 600K range out here. One of the other builders has a very similar presale type listing at 630K and it's been sitting for years.

It's not like I'm expecting the deal of the century, but I want some nicer things. Like casement windows instead of the standard bright white vinyl sliders. I would like painted millwork, not the crappy, cheap to install stained junk. I want tile flooring, not sheet vinyl in the bathrooms. Etc.

I will find out more later today but I have the feeling that most of what I want is likely to be included. Maybe not the specific appliances and such, but the general finish level. At least I hope so.

Our specific financing issue is a past foreclosure. Every bank I have spoken to tells me at a minimum it will be several more years before they'd be willing to do a construction loan for us, if ever. In fact, most (construction) loan officers I've spoken to seemed to be taken aback by my inquiry. As if we are the only people on the rebound. Whatever. It is what it is and so apparently a construction loan is out of the question for the foreseeable future.

However, we can get a mortgage so a presale type arrangement works and will give us the semi custom home we want. But our options are limited and that makes everything harder. It also impacts our negotiating power, but I'm not sure that has to be something the builder is aware of.

This post was edited by olivesmom on Fri, Aug 30, 13 at 14:18

Yes, I am closer in. I just recalled that you were somewhere near when you posted about that vacant land. We were doing the same thing at the time. Maple Valley is a lovely area, we have "lost" many friends to the lure that is MV for starting families and quality schools. Such reasons is why we moved a tad east ourselves. Good luck with your build. I understand about the financing. We sold our home last year and several buyers were in similar shoes to yours and were unable to secure financing due to foreclosure. Do some legwork on your finishes, if you haven't already. Painted trim can be offered cheaper than stained trim. We are finding out that somethings I thought were "cheap" looking are actually more expensive. Ex. real granite vs. composite countertops. Real granite was cheaper when to me the other stuff looked cheap. Again, good luck and I hope the builder has what you are aiming for.

Looks like 600K goes a long way when you're buying existing.

Here is a link that might be useful: 4/3 existing home

This post was edited by live_wire_oak on Fri, Aug 30, 13 at 15:31

It really does, especially out in Maple Valley. That same home would be nearly 50% more further west in the same greater King Co. area. Crazy out here.

Yes livewire, you can get quite a bit out here. I'm familiar with the house you linked too. It's not bad, just it what I want. I'm familiar with that builder's work. Besides the small lot, this builder has the habit of building the same one or two models for an entire neighborhood. Nothing like a street full of the same 3,500 sq ft homes right next to each other on small lots.

We are actually looking at an existing home tomorrow. There's a lot we like about it but it is even further out, down a long gravel road, and surrounded by a few dumpy trailers. It's also missing all window/door casing and baseboards. The front porch/steps and back patio are also missing. Kind of weird. And it has some lower end finishes/ appliaces. So its defintely overpriced IMO. But we are still going to look at it as the floorplan (once the bonus room is finished) is EXACTLY what we want. The lot is beautiful too. It backs right up into a foothill. I love the cedar exterior as well.

This post was edited by olivesmom on Tue, Sep 3, 13 at 22:13

That sounds like it might be a good fit, even if you have to put in some time getting it fixed up.

It's been a busy couple of days.

Met with the builder. Turns out I've seen some of his homes before. He builds beautiful homes. He's also a real nice guy, seems to be very accommodating. Unfortunately due to a permitting issue, we have to use the specific plan he had in his listing. However, he seems very willing to make it work for us by adding additional rooms in the basement, etc. The finish level he was planning on is inline with what I want. So it looks like we can get the home we want without going over. One downside is we would have to move forward within the next two weeks or so due to that permit issue. I feel a bit rushed and that's not how I want to feel making such a big decision.

Also, my husband really likes the existing home we saw although he acknowledges it is significantly overpriced and needs work. But he is in love with the property. I like the home to but I'm not sure I want to live with such low end finishes (laminate counters, vinyl flooring, cheap appliances and fixtures) for the foreseeable future. I'm also not crazy about the location, but its not a deal breaker.

The timing of the presale home would work better for us and give us ample time to sell our home. My husband is just worried that the property isn't as nice. I'm leaning towards the presale home, not sure about my husband.

We were making some of those same decisions. We opted to go new because we needed the process to be all done at once. We had a fixer upper last time around and it took us too long after living there to complete the projects. It would be hard to turn down a superior property for sure though. If you are good project people, I would say the existing home. I also hear an edge of really wanting nice, new things, then the new build will be more satisfying in the end.

I just noticed you posted a link to the built home. I would go with that if the price is right. The missing molding and other details wouldn't even make me blink. Its a lovely home.

I think Enumclaw is a nice little town, but it is not very convenient to shopping like Maple Valley now is.
But that is a beautiful rural lot.

I am building a semi-custom home in Louisiana and have a few questions about negations with the builder. I met with the builder and his agent a few days ago, and it didn't go very well. Here are a few of my thoughts, questions, and concerns. In general, we are about 15-20K apart in what we think the house should cost.

1. Comps in the development: At present, the home I am proposing to build is likely to be the most upgraded/expensive home in the development (for a while). There will be a second phase with larger homes next year, but presently, my house is the most upgraded, and it sits at the entrance to the development. One concern from my lender is that when the appraiser from the mortgage company comes, because he/she will be basing on other comps in the development, my home may not appraise for the construction price, and as such, the lender will be unable to completely finance my home. A second concern, but within the same theme is that the builder may be attempting to keep the price higher on my home to increase the comps in the development. At present there are probably 20 homes in the development and about 5 are lived in, 2-3 are up for sale.

2: Upgraded Lot: The lot I chose was one of only a few that were upgrades. The larger lot was desirable because we wanted to have a bit more outdoor space. Here are a few problems we have encountered: because the lot is the first in the neighborhood, it is directly next to the central mail facility. As such, our outdoor space is adjacent to the mail facility and the only way to establish any privacy is to build a fence. Elsewhere in the neighborhood the developer has paid for a fence to separate the community center from the home adjacent. He seems very firm that he will not be paying for a fence at my location. Because of the "community standards" there are only a few fence designs allowed, and they are rather expensive. Because my upgraded Lot is the deepest, the cost to build the fence is a bit outrageous. But here is where it gets worse; the concrete in the development goes to my lot (because its at the end of the street) and the builder wants me to pay for cement to be poured to drive from the existing concrete to get onto my property and into my garage. Its only about 10 feet from the present developer poured concrete, buts its an additional cost. The lot upgrade was $9,000 and the "hidden costs" are now about $3,500 for the cement and in all likelihood nearly $8,000 to $10,000 for the fence. So this "$9,000" upgraded lot is set to cost more on the order of $20,000.

Thank you for your thoughts on the matter!

Not happy with the deal walkaway, his sandbox his rules unfortunately.