Many retiring families believe negotiating their future retirement home is like negotiating the purchase for a home in their current hometown or within their county. Issues occur when they leave your area of knowledge and expertise, such as those families purchasing retirement homes in coastal North Carolina.
For most families a retirement home purchase will mean relocating to an unfamiliar area, which often means that they may find themselves unaware of the market conditions and real estate options. To bring your knowledge up to a culpable level would require a tremendous amount of research and for many would-be retirees, they don’t have the time or the inclination to tackle this daunting task.
Use a Broker
The first step in developing a retirement home negotiating strategy is to find a competent real estate professional to advise you. An experience real estate professional will understand the marketing conditions and enlighten you on where the market is and where it may be headed.
Purchasing in a master-planned community (a.k.a active adult community, lifestyle community) requires specific knowledge of that neighborhood, as communities represent their own micro-market. Experienced professionals specialized with master-planned communities and negotiating with developers, like those at Silver Coast Properties, are indispensable. Their knowledge of price history, purchase incentives, competitors, and buying strategies translates into saved money or more options for your new home.
The private owner or developer compensates the Buyer Broker, so their service is free to the client. Sometimes the onsite salesperson will discourage using a broker. Often employing an “outside” broker affects the onsite salesperson commission and it is easy to see from the beginning where their alliance lies. Onsite salespeople work directly for the developer and are charged with getting the best price for the developer. Your Buyer’s Broker is working for you and is charged with ensuring that you get the best price possible.
Now, if you have already identified a community or even a property without the assistance of a Buyer’s Broker you are likely already at a disadvantage. The onsite salesperson you worked with has already been provided pertinent information about your budget and if you’ve already met has gauged your enthusiasm for the community and property. Many onsite salespeople are highly trained real estate professionals and are ready to overcome your objections about price. At this point you have a couple of options:
Competing Communities or Properties
One strategy is to pit one community or product against another. I have always encouraged my clients that when possible don’t be overly committed to one home or retirement community. When you are negotiating you have to be willing to walk away. The reality is, often times a home purchase becomes an emotional decision and difficulty to abandon.
When there is a competing property or community, which is communicated to the salesperson in the target community, you are being honest with them and letting the salesperson know that if they offer you a better deal that is where you are going to buy. The goal here is to get the salesperson on your side. The salesperson is likely not a salaried employee and is compensated only when a sale occurs. You want the salesperson pushing the developer to lower the price as much as you.
Ask For Features
If you are negotiating for a new construction home it is often easier to get added features than it is to get a lower price. The added features are priced at retail and the developer or builder is getting them a wholesale. So a $2,500 credit for a refrigerator is actually costing the developer much less in real dollars.
Additionally, developers are always trying to elevate prices and when you negotiate a price lower than recent sales it doesn’t further the prices upward. Developers are more willing to surrender features for a higher purchase price.
Also, by offering it a lower price the developer may be creating ill will with current owners, which in many cases is a source of referrals. The developer would much more prefer to demonstrate appreciation to their current owners, affirming the homeowner’s wise decision.
Buying a home can be difficult as you make it. For the additional aggravation you can negotiate, save some money and generally get what you want. Keep in mind that the more successful or desirable communities tend not to negotiate too much on new home prices. Private sellers are more flexible in all cases and generally that is where the value is found. For the best results begin your search with a competent broker. A broker will streamline the process of identifying a community and manage the negotiations, ultimately saving you time, money and aggravation.