New construction sales fall in sync with resale and builders are having to come up with creative incentives to move product.  Most are no longer pouring foundations without a sale agreement in place.  Buyers can typically not make new builder’s sale agreements contingent upon sale of an existing home.  Time for construction to be completed is roughly six months here.  At the point where final occupancy permit is available buyers are required to have financing in place and close the deal.

The light turns on for some buyers after waiting six months for their new home and watching prices slide.

“Why should we pay the price agreed upon 6 months ago when the builder is now offering more incentives for the same house!?”  Good question.  What has to be weighed is what the loss or gain will effectively be.  Most likely buyers of new construction have released earnest money to the builder for upgrades, etc.  It’s not refundable.

Choice is to go forward with the existing sale contract, attempt to negotiate a new price, or walk away from the purchase and any funds already paid.  Tough one.  Going forward as planned means a buyer is potentially paying a premium compared with today’s pricing.  No one wants to do that but an agreement is an agreement.  Keep in mind that a builder takes the same risk in seller’s market.

Purchasing pre-sale homes in phase one of a development can potentially be very profitable in an up market.  Locking in a price early on and watching phase two prices climb in a quickly appreciating market is fun.  Buyer’s love it.  Flip side is the case now and buyer’s hate it.  Builders want to maintain good report in any community and may have suggestions.  Probably the best advice is to evaluate options with your real estate broker.

Check out www.maxwellsinclair.com for awesome tips on negotiating real estate purchases or possibly re-negotiating with builders!  Search Houses For Sale in Portland that have come onto the market recently and compare resale with new construction.