Here’s What You Can (And Can’t) Negotiate on a New Construction Home

A partially finished new construction home that would involve negotiation in the buying process.

Emma Woodward is a freelance writer who loves writing to demystify real estate and finance topics. She is always looking for tactics to connect with readers in a non-stuffy way. When she's not writing about budgeting or mortgages, Emma also writes about food and fashion. She has written for companies and publications like Finch, Toast, Bankrate, and The Financial Diet.

Based in the Seattle area, Emma enjoys discovering new hiking trails and outdoor wonderlands when she's not working. You might also find her reading a good book, searching out a tasty bake shop or wandering through her neighborhood.

Madeline Sheen , Contributing Author Madeline Sheen Contributing Author

Madeline Sheen is a passionate writer and editor with experience in real estate, personal finance, and mortgage content. Along with serving as an associate editor for HomeLight, she’s worked in the mortgage industry since 2019 and holds a BA in Communications from California State University, Monterey Bay.

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So, you fell in love with a new construction home. It’s easy to see why — with a shiny new everything and designs for a modern-day life, a new build property likely has a lot of the bells and whistles. But we all know homes are more expensive to build than ever.

The building blocks of home construction, such as cement, concrete block and brick, as well as ready-mixed concrete, saw price changes upwards of 6% in June 2024 compared to last year. With that in mind, do you really have room to negotiate on a brand-new property? Or will you have to suck it up and pay the builder’s list price?

While negotiating for a new construction property differs from negotiating on a pre-existing property, it certainly can be done. There are ways to get a lower price or ask for upgrades if you know what you’re doing. Hiring a real estate agent with experience in new construction homes can also help you secure the best deal without sacrificing your dreams of a brand-new home.

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“It’s always a possibility to negotiate. A lot of builders will upfront tell you that this is what I’m selling and I’m not gonna negotiate on anything, but there is no negative to asking,” according to Brad Gore, a real estate agent and builder who works with over 74% more single-family homes than the average agent in Branson, Missouri.

Can you negotiate with the builder when buying a new construction home?

New construction home negotiations may feel impossible when builders often set prices and floor plans way in advance. But it never hurts to ask. Even if price negotiations are off the table, you may be able to negotiate the floor plan, appliances, or other home features.

“There’s no shame in trying to negotiate to get the best deal,” according to Gore. Work with a real estate agent experienced in new construction home negotiations to help you get the most bang for your buck. Let’s discuss the home aspects you can try to negotiate.

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How to negotiate with your builder

Before you start negotiations on a new construction home, it’s important to know the basics of the process. It’s also helpful to know the stage of the building process so that you know what you are more likely to successfully negotiate. For example, if the home already has flooring installed, it’s highly unlikely that you will be able to get different flooring for free. Whereas, if the flooring hasn’t yet been installed, you may be able to ask for a different type of flooring to be used at the same price.

Once you are familiar with the process and you assess where your desired home is in the process, you can try to negotiate with the builder. Here are some common aspects of a new construction home you can try to negotiate.

Financing your new construction home

Most builders have a preferred lender they work with, but that doesn’t mean you must use their lender. You should always shop around with a few different lenders to find the best rates on your home loan. However, using the preferred lender of the builder could help you in negotiating a good deal on the house.

The preferred lender often offers buyer incentives to help sweeten the deal. If the lender doesn’t mention any of these incentives outright, you can still ask. Some options a lender may be able to offer include:

If you find a good deal with another lender, try bringing the terms to the builder’s lender to see if they can match it. Evaluate the loan terms, closing costs, and lender’s reputation to see which option is the best overall.

Regardless of the deals you get from any lender, make sure you read the fine print. Some options may sound like a great deal, when in reality, they are not.

Dreaming up your ideal floor plan

Many individuals who purchase new homes do so because they want the option to customize design features and choose a floor plan that meets their specific needs. If this also interests you, you might be looking to negotiate the overall layout of the home. This is definitely something you can try to negotiate, but it has to be at the right moment in the timeline of the build.

A builder is unlikely to knock down walls that have already been built. However, if the home is still in the beginning stages of the build, ask about reconfiguring the floor plan. It might not be possible to get added square footage for the same price, but you might be able to get a custom layout that will meet your needs by working with your builder.

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Get yourself all the bells and whistles

When it comes to negotiating upgrades, you have a lot of options. You are more likely to find success with more minor option upgrades. Think about what matters most for your home, and ask away. Builders may be able to get a deal with a supplier that you wouldn’t be able to get on your own. This means they might be able to offer you a discount on an upgrade, and they may even throw in an upgrade for free.

Gore says you can ask for upgrades on pretty much everything — from appliances and countertops to lighting packages and paint colors. You can even try asking for upgrades to the landscaping or ask if the builder will add a security system.

Keep in mind that upgrades can be more complicated if most features are already installed in the home. Something like a refrigerator might be easy to switch out if it’s already in place, while paint color would be more difficult. If you really want to upgrade something that has already been installed, you can ask if they will change it if you cover the labor costs.

Saving on HOA fees

If the new construction home you have your heart set on is in a subdivision, you will likely be responsible for paying homeowners association (HOA) fees when you purchase the home, as well as on a monthly basis. Another assistance you could ask for from the builder is for them to cover your HOA fees for the first year or more. Some builders will agree to do this to help offset the costs of buying the home.

Protecting your purchase

New homes typically come with builder warranties. A standard warranty for new construction homes comes with one-year coverage on structural elements like siding, flooring, and drywall. It also comes with two-year coverage of heating and cooling systems, as well as plumbing and electrical elements.

If you want more out of a builder warranty, try to negotiate for a longer coverage period. You could also ask the builder if they would include things like light fixtures and appliances in the warranty.

Finding wiggle room in price

You might find more success in negotiating if the price of the home stays the same but the builder adds more upgrades. However, you may need a lower purchase price to be able to afford your dream home.

If this sounds like your situation, there are a few scenarios where you are more likely to negotiate a lower price. Builders will typically stick to their guns on price because they don’t want to set a precedent for future property sales in the same neighborhood. However, if it’s the last home on the lot, they don’t have to worry about the precedent so much. You may also find wiggle room in price if you are purchasing the model home.

It’s not common, mainly because when builders value the lot into the price of the home, they’re trying to spread those costs evenly over all the lots. So I think from our perspective as consumers, certainly we think that this lot isn’t as valuable as that lot. But, from the builder’s point of view, they’re all worth the same because it cost him the same amount.