Are You Competing With Your Builder?
If you’re trying to sell your home in a subdivision where your builder is still building homes, you may face some unexpected challenges.
Here’s why:
The home you bought had the builder’s profit built into it and you will be competing with your builder who may be willing to negotiate away part or all of his profit to sell his standing spec home inventory.
It’s also possible that your builder may have acquired additional lots at a lower cost after building your home, thereby making it possible for him to build the same home at a lower cost.
Things can get even more interesting if you are competing with a builder who also developed the subdivision because the builder/developer has TWO profit margins (land and home) that he can discount to achieve a sale.
Further, many larger builder/developers have the cost advantage of having salaried salespeople who get paid as little as $500 (or less) per sale vs. the higher commissions you will incur in the resale market.
Finally, some builder/developers have formed partnerships with lenders, which gives them yet another profit center and allows them to offer better financing for their buyers.
The bottom line?
It’s difficult to compete with a builder who’s still selling homes in your subdivision.
November 24th, 2008 Posted in Inside Real Estate
Print This Post
No Responses to “Are You Competing With Your Builder?”
By Aaron Catt | Boise Real Estate Soup on Nov 25, 2008
Its also difficult when your builder sells you a home for lets say $250,000 dollars one week and the next week runs a marketing campaign to sell their other homes (similar to yours) for up to $50k off, thereby forcing you into a negative equity position.
A good reason why it is often said that your money is made at the purchase, not at the sale.