You find a pre-construction property you love. The location’s perfect, great communities, even better amenities. But the interiors aren’t as likable and you want some upgrades. That would easily add $50,000 to $100,000 to the purchase price. The good news is you don’t have to accept the sticker price on every feature. Builders are often open to discussions, but you need to know how to approach them.
Why builders offer upgrades
Most pre-construction properties come fitted with standard interiors and finishes. They are move-in ready, but every unit looks the same. Their standard package might not be your style, so they offer an option to customize the finishes and flooring, so it feels more like home.
These upgrades range from high-end countertops to premium flooring and luxury lighting fixtures. Builders offer upgrades as an incentive to sell homes quickly and take away the stress of renovation from their buyers.
But remember, not all upgrades are made equal. Exterior enhancements, such as extended patios, landscaping packages, or upgraded siding boosts curb appeal, but doesn’t add value to your day-to-day living. On the other hand, luxury upgrades like frameless vanities, frameless glass showers, or spa-like tubs, or energy-efficient upgrades like double-pane windows, smart thermostats, or solar panel pre-wiring, are worth the money.
Here are 10 tips to help you negotiate pre-construction upgrades:
While it’s true that not all builders are open to negotiations, most will give in. Let’s talk more.
1. Time Your Negotiation
Builders are often more open to negotiating early in the construction phase or near the end of the financial year. At the beginning, builders want to sell as many units as possible to secure a construction loan, and towards the end of the year they want to meet sales targets. If this is only your first or second time buying a pre-construction property, work with a popular builder, so you can find information about their timelines and customer service on forums.
2. Prepare for Negotiation
Do a deep dive into the builder’s upgrade packages and compare them with similar developments in the area. That should give you an idea of what’s really an upgrade or a sales gimmick. You can also get cost estimates from general contractors for the same upgrades to know how much you’ll need to spend overall.
3. Approach Builders Smartly
No one likes being spoken to rudely or encountering someone who walks in making demands. Frame your requests as opportunities for mutual benefit. This needs to happen before signing a purchase agreement to be the most effective. You could say something like these specific upgrades will help you finalize your decision to purchase. Have your first deposit ready to make the builders feel confident in their decision.
4. Focus on High-Impact Upgrades
Some upgrades add more value to your home than others. These are specifically functional upgrades like kitchen cabinets, energy-efficient windows, or better flooring, which are desirable for future buyers. They make the property more liveable. You can include these details during negotiations to get a better discount from the builder.
5. Bundle Your Requests
Your request for discounts will most likely be heard if you want to get multiple upgrades. Builders look at it as a combined deal and simplifies the process of securing raw materials. You can expect up to 15% in savings by bundling requests.
6. Be Ready to Walk Away
With multiple builders trying to sell off units, you have an upper hand here. Don’t sound too desperate during your negotiations. If the builder knows you’re considering other developments, they may be more inclined to accommodate your requests. While bluffing rarely works, it’s wise to have a few alternative projects in mind that you’d consider purchasing.
7. Leverage Existing Incentives
Builders in the GTA offer promotional incentives, such as free upgrades, free decor dollars, or reduced closing costs, to attract buyers. If a promotion aligns with your needs, use it as a starting point for further negotiations. For example, if the builder offers upgraded appliances as an incentive, you could negotiate for additional upgrades or reduced costs on other items.
8. Use a Real Estate Agent
Real estate agents, especially those active in the pre-construction industry, have contacts within the sales team. They can not only negotiate the purchase price and deposit terms but also get you better upgrade discounts.
9. Negotiate After the Initial Offer
Builders may be more flexible after you’ve signed the initial agreement. For example, if you’re offered a standard package, ask if there’s room to swap out certain items for higher-quality alternatives. Builders are sometimes more accommodating once they’ve secured your commitment.
10. Consider Post-Closing Upgrades
If negotiations stall, consider delaying some upgrades until after closing. Independent contractors often charge less for similar work. That might delay your move-in process but for a few thousand dollars, it’s worth the wait. Upgrades like custom lighting or bathroom fixtures are better to complete post-purchase.
Ready to make your pre-construction home truly yours? Reach out to That Pre-Construction Guy for more details.