It’s a common question and an even more common problem in today’s real estate market.  Competing with the builder to sell your home.  Knowing the builder’s position and promotions will give you a lot of information on how you should approach the sell of your home.

First things first, let’s do the short answer:

Do Builder Incentives Affect Value? SHORT ANSWER:

They do not affect Value directly, instead they tend to drive the price negotiated down on resales only in the neighborhood and do not typically affect surrounding neighborhoods.

Having a professional Realtor is the key to success and there is one thing to remember.  Above all else, price is king.

Some keys to success when competing with a builder are:

• Know the Market - Like any professional Realtor should know, you need to know what you are competing with.  Will the "Biltmore" take 8 months to build, and you have one that is move in ready?  Does your lot allow for the only 3 car garage?
• Know the promotions - You can do two things, you can attempt to match the promotion or show value elsewhere.
• Accentuate the Differences - Make sure that buyers know why they’d want your home over the builder’s.  Maybe you’ve finished some additional bedrooms, added a pool, or perhaps you "worked out the kinks."
• Work the Community - Most sales from new neighborhoods in more rural areas are referrals from the neighborhood.  Take advantage of it.
• Remind the Buyers - THEY CAN MOVE IN TO YOURS QUICKER.  They can get an inspection and have a real person to deal with.  Most builders have rigid contracts and are not really interested in lots of negotiations.  They’re simply less agile than a home owner is.

Be sure to hire a professional Realtor to help you with this trying process.  It doesn’t have to be an agent that lives in or near the neighborhood, in fact, hiring an outsider could be a good play, since their "sphere" might be people who would want to relocate to your neigborhood.

When a buyer is looking for a new construction home, the question always comes up, "Is This A Good Builder?"  It’s a loaded question to say the least.  Although, the Real Estate Commission will be upset about this, most agents DO have opinions about the builders.  The bottomline however, is that an agent’s answers are based purely on their perceptions of a builder or their direct experience.  Keep in mind that even the most successful agents whose team closes 600 transactions or more a year, may only have a few transactions with a builder.

Still, the question remains.  So should you buy from a builder or not? There are some key things worth mention and I’m also a firm believer in bringing in the inspector early on.  Having the inspector there early on will "catch" many of the issues.

See, the truth is that most builders are not inherently bad.  Instead it’s the people they hire that make the difference.

For example, you could have a fine, upstanding builder who hires an equally qualified general contractor to manage his subdivision.  He in turn hires excellent framers, concrete people, electricians, plumbers, drywallers, painters, carpet people, lighting, landscape and fixture folks and of course, "punch out" people to finish up.  There may even be designers, realtors, and other people who have some input.  Last but not least, let’s not forget that the county will likely want to inspect and of course they have their own people in on the deal.

If one or two of these "hires" or contractors has a bad day, bad employee … bad "run" then you’ll end up with 5 to 10 homes that all have a leaky shower for instance.

Building a bunch a homes very quickly isn’t always a bad thing, but it gives the builder a smaller margin of error.  One wrong move and it’s going to effect 10 homes or more in some cases.  Whereas a smaller builder may only be building 1 to 4 homes at a given time.

So how do you find out if a builder is "good" or not?  Try to inspect the finished product, try to inspect the product as it’s being built.  Then you’ll know the work of the contractors.

Real Estate is Local, so is building.  One subdivision does not a builder’s reputation make.