Q & A Table of Contents
They're In The Driver's Seat And They're Driving Me Crazy
From: Therman, Atlanta, Georgia
Question: I am purchasing a new home in a new subdivision in the Atlanta area. What I am finding is that new homes are selling so quickly that the builders are not very accommodating. What can I do to increase my negotiating leverage when I sit down during the contract negotiations (especially with production builders)?
Response: The greater your commitment to buying your new house in a particular area, the greater the imbalance of power between you and the seller of the housing you are thinking of buying.
You need to consider your BATNA, your Best Alternative To a Negotiated Agreement. Are there other locations where the housing available is more favorably priced? If you are committed to a particular location, perhaps the best way to strengthen your BATNA does not relate to what the builders may have to offer but such issues as financing alternatives or other creative ways to make the monthly cost more attractive.
Sometimes the issues arising in the purchase of new housing relate to the 'accessories' among which you can choose: decor, kinds of trim, interior or exterior surface, landscaping, irrigation, or other structural factors. Of course you also need to consider such issues as access to recreation facilities, school quality (and distance), taxes, or insurance cost variables.
When you are faced with another party who has no particular need for an agreement with you it's important to find ask them questions to see whether there are areas about which you can negotiate to improve the ultimate agreement.
If there is a total imbalance, if they've got what you want and there's nothing you can offer to modify their demands, you need to decide just how badly you want what they're selling. Unless you have an alternative, you should look for ways to reduce the pain. If you are going to end up with a house you really want, that may be the ultimate measure of the value of the transaction to you. You need to be honest with yourself about your priorities -- and then act accordingly.
Good luck,
Steve
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