Discounts on standing inventory of new construction

[OCLuvr]

What %?

 

[usctrojancpa]

Just had Lennar go down a bit on standing inventory for a client.

A bit? I've been able to get $50k-$100k off asking prices even last year.

 

[Dr. CA Real Estate]

Just had Lennar go down a bit on standing inventory for a client.

A bit? I've been able to get $50k-$100k off asking prices even last year.

More than usual would be more accurate then.

 

[andy]

Best time to buy new construction homes is somewhat contingent on the buyer not being too picky on lot location and exterior features. Most publicly owned companies will gleefully accept  low offers on standing inventory and/or "last second cancellations" when their fiscal year end is looming. I've seen as high as 25 percent discounts from list price over the years on a few zero hour purchases. Average accepted  discounted offers are between 10-15 percent though. Still, "Ask not, get not".

Some publicly traded builders have fiscal year ends in June so it's not always a December purchase play. Discounts exist as well each end of quarter, although not as dramatic as FYE, on standing inventory and last second cancellations.

To the very nimble come great rewards!

My .02c

So let?s say FY ends June 30, 2020, do you have to close the home by June 30, 2020 or not just sign the purchase agreement by that date right?

 

[Dr. CA Real Estate]

Usually the incentives are based on closing by a certain date, they don't quite care when you sign the purchase agreement.

 

[marmott]

So let?s say FY ends June 30, 2020, do you have to close the home by June 30, 2020 or not just sign the purchase agreement by that date right?

You would need to close by the end of their fiscal year so they can report the sale as part of said FY.

 

[Dr. CA Real Estate]

Current promotions for most builders as far as commission goes is 4-5% of purchase price.

 

[usctrojancpa]

So let?s say FY ends June 30, 2020, do you have to close the home by June 30, 2020 or not just sign the purchase agreement by that date right?

You would need to close by the end of their fiscal year so they can report the sale as part of said FY.

They want you to close by the fiscal quarter end so they can recognize the revenue for the home on their financial statements. Best time to get into contract is about 30-45 days before quarter end on quick move-in homes with publicly traded home builders like Lennar so you can ensure you close by their fiscal quarter end. Just remember, not all home builders are public like Irvine Pacific and California Pacific so they offer these types of special quarter end incentives.

 

[usctrojancpa]

Current promotions for most builders as far as commission goes is 4-5% of purchase price.

Yeah, more so for the publicly traded home builders the private guys like Irvine Pacific and California Pacific are sticking to their fixed broker co-ops.

 

[Cares]

Current promotions for most builders as far as commission goes is 4-5% of purchase price.

Yeah, more so for the publicly traded home builders the private guys like Irvine Pacific and California Pacific are sticking to their fixed broker co-ops.

I referred a cash buyer that was able to quick close on a CalPac home and they offered double co-op. They wanted to close before Dec 31 a couple of years ago.

 

[usctrojancpa]

Current promotions for most builders as far as commission goes is 4-5% of purchase price.

Yeah, more so for the publicly traded home builders the private guys like Irvine Pacific and California Pacific are sticking to their fixed broker co-ops.

I referred a cash buyer that was able to quick close on a CalPac home and they offered double co-op. They wanted to close before Dec 31 a couple of years ago.

I think CalPac increased their broker co-ops back in 2018 if I remember right from like $12k to $24k on Silverleaf homes.

 

[Dr. CA Real Estate]

Of the two Calpacific is slightly more reasonable with their Buyer incentives

 

[usctrojancpa]

Of the two Calpacific is slightly more reasonable with their Buyer incentives

Yeah, all of the CalPac communities basically offer a flat fee broker co-op that's around 3% compared to like 1.5% before (Trellis Court offered $14k for homes in the $900s).

 

[Dr. CA Real Estate]

Shea Homes tends to keep the purse strings tight too.

 

[usctrojancpa]

Shea Homes tends to keep the purse strings tight too.

Yeah, they definitely aren't as generous as other builders. They bumped up the broker co-op to 3% at Padova in Irvine and are offering 4% at Teresina in Lake Forest.

 

[Dr. CA Real Estate]

I?ve dealt with them at park side in HB and Ocean Place in seal beach.
The other cheapo is New Home Company. Toll brothers is a mixed bag I?ve found

 

[usctrojancpa]

I?ve dealt with them at park side in HB and Ocean Place in seal beach.
The other cheapo is New Home Company. Toll brothers is a mixed bag I?ve found

Well The New Home Company is basically Irvine Pacific 2.0 and I believe that they are the ones that actually build the Irvine Pacific homes.

 

[Dr. CA Real Estate]

Have you personally been up to teresenia? What did you think?

 

[aquabliss]

Have you personally been up to teresenia? What did you think?

I have.  The layouts are awesome, the location not so much. 

 

[usctrojancpa]

Have you personally been up to teresenia? What did you think?

Floor plans are very nice and Shea tends to build nice homes. Location is average but it'll be interesting to see the community once it's all built out.