Real Estate Agent’s Guide to Negotiating New Home Price & Transactions
1. Research the state of the market & current inventory
2. Understand the buyer’s rights
3. Retrieve the initial listing information
4. Know what and when you should negotiate
• What can you negotiate?
• When can you negotiate?
5. Determine if you’re entering a collaborative or competitive negotiation
If you’re a real estate agent negotiating a new construction home deal for a client, there’s several important factors to consider.
What all is included in the build and what’s an add-on? Are the builders willing to offer incentives to sweeten the deal? Is the price really non-negotiable?!
These are some of the top questions both you and your client will want to find the answers to. In this brief 5-Step guide, we’ll help outline the facts and recommended approach to negotiating a new home deal for your client.
As a result, you’ll be able to navigate the new home sales process with greater ease and confidence. You’ll also be able to further improve your reputation as a smart, savvy, responsible new home realtor.
Foundational vs Active Steps in Negotiation
Before we dive in, there’s an important distinction worth mentioning: foundational vs active steps in negotiation.
As you’ll see, the first two steps in the negotiation process are foundational. As an agent you’re always expected to have answers to questions related to buyer’s rights. Similarly, you’re always going to keep up with current inventory and general market trends! This is where the New Home Buddy platform can help give you a competitive advantage.
If the first two steps in the negotiation process are foundational parts of doing your role as a new home buyer’s agent, the next three steps can be considered active. These are steps that require you to actually conduct specific research, make offers, and manage details of the transaction (such as add-ons and inclusions).
1. Research the state of the market & current inventory

When a client mentions they’re considering buying a new construction home, your first job is to assess the current state of the market. Active agents usually have a good pulse on the state of the market in general already.
However, when it comes to new homes, inventory supply and demand can change at a moment’s notice. Before telling your client that you’ve “got the perfect location and floor plan for them!“, you’ll want to check on current builder inventory to see what’s available.
If a client is on the fence about whether or not to pursue new construction and inventory is low, they might be better off purchasing a resale home. On the other hand, if supply is high then builders will be eager to sell.
High inventory gives you, the buyer’s agent, more leverage when negotiating. Therefore, in a high inventory market you’ll want to act fast once you get a new home client to take full advantage of the incentives and discounts a builder might offer.
After all, builders are losing money every day a house or lot is sitting empty. If you know a particular community of new homes has been selling slowly, that might be the perfect place to strike a deal. Of course, you only want to do so if it’s in the best interest for your client, and meets their needs.
2. Understand the buyer’s rights

As we mentioned in a recent article, it’s a good idea to keep sample builder contracts on file for review. You’ll want to do this because unlike resale home contracts which are typically 9-15 pages, builders have their own proprietary contracts that are 50-80 pages on average.
So you can bet there’s tons of details and specifics regarding the buyer’s rights in those contracts that are unique to each builder! Having sample contracts handy will serve as a great quick reference point when you need to find out quick answers for your clients.
Specifically, you’ll want to look out for any important deadlines relating to when a buyer can terminate the contract without forfeiting their deposit money.
Put another way, a buyer’s earnest money generally becomes “hard” or nun-refundable after the loan contingency deadline. For new construction homes, this earnest money deadline can be pretty strict (within 2-3 days after the contract is executed).
Additionally, there’s very few provisions that allow the buyer to terminate without losing their deposit. One exception would be if the builder is unable to complete the build in the timeline agreed upon. Another exception would be if the buyer’s loan somehow gets declined (if it was out of the buyer’s control).
So while there are fewer new construction home deadlines to manage overall compared to resale homes, they are nevertheless very important to keep track of.
Communicating the buyer’s rights to your client and the deadlines they can expect to follow is a crucial part of your role as a new home buyer’s agent. Ultimately, you’re unlikely to be able to negotiate the rights set forth in the builder’s contract.
3. Retrieve the initial listing information

Step three, retrieving the initial listing information, is the first “active” step in negotiation. You need to get a good gauge on the initial listing price to determine how or what to negotiate!
Fortunately, New Home Buddy has up to date floor plans and pricing information for you to quickly see what’s available in San Antonio. If you’re outside of San Antonio, you can contact builders directly to learn about what floor plans are available or coming soon.
This is the stage where your negotiation with a builder begins. Therefore, it’s best to gather as much information about your client’s wish list beforehand so you can an accurate, comprehensive quote right away.
Anchoring
One of the best things you can do in a negotiation setting is to be the first one to set an asking price. This psychological effect, known as anchoring, demonstrates that the first number presented dictates the gravitational pull for the rest of the negotiation.
This becomes the basis for the negotiation! Ultimately, whatever that initial listing price is for a home, the price will only fluctuate a small amount relative to that base number.
In the case of new home construction, builders are the ones who set the initial price. This means that as a buyer’s agent, you’ll want to do some comparative research by looking at similar floor plans/communities to determine whether their asking price is reasonable, or whether you think there’s any room to negotiate.
Another approach you can take is to contact the builder directly and set the initial price your client has stated. That’s probably your best bet for “anchoring” the deal from a listing price perspective.
For more information on anchoring, check out the book Thinking Fast and Slow by Daniel Khaneman.
4. Know what and when you should negotiate

When it comes to negotiating new home transactions–or any negotiation for that matter–it’s all about leverage. Understanding what and when you can negotiate is just important as how you go about it (see next section).
To help you determine what and when you can negotiate, check out the checklists below!
What can you negotiate?
Here’s some common things you can consider negotiating:
- Financing: Builders often have preferred lenders who are willing to cover some or all of the closing costs
- HOA Fees: Some builders are willing to pay your homeowners association (HOA) fees (if applicable)
- The build itself: This is unlikely to happen with big name builders, but is more likely with fully custom builders. Asking if they have any “spec” homes available is also good option for savings
- Lot premiums: Some lots of land are more desirable than others. If that’s important to your client then you can try to negotiate that, or “get a deal” by simply choosing a cheaper lot
- Upgrades: This probably the most common area where you can negotiate a good discount. However, make sure you encourage to your client to only choose upgrades that will increase the value of their home long term!
Many builders are reluctant to negotiate the listing price of a home. Why? Because they don’t want to decrease the value of the homes in the community they’re developing!
This doesn’t mean that it’s impossible to negotiate the listing price, it just means you’ll have more success negotiating upgrades or other inclusions.
From the builder perspective, this is ideal because it allows them to maintain the value of homes in the community, while also satisfying the buyer. By only offering discounts on things like the upgrades, this ensures fairness and good will with buyers who already purchased other homes in the community.
When can you negotiate?
Most builders will insist that their base prices are non-negotiable, and generally this is true. However, it’s not always the case.
You’ll know it’s a smart idea to try to negotiate the price with builder when:
- Recent reports indicate that new home sales are declining in your area
- An entire development community is nearing the final stages, and only a few lots remain
- The builder has several unsold “spec” homes in their inventory
- It’s the end of the month, or the end of the fiscal year
If the timing is right and any of the above statements are true, then you have enough leverage to negotiate!
5. Determine if you’re entering a collaborative or competitive negotiation

We’ve covered the what and the when for negotiating new home sales, now let’s discuss the how. When it comes to negotiating a new home sale, ideally these transactions result in win-win (cooperative) scenarios.
However, there’s also plenty of transactions that are win-lose (competitive) scenarios. Basically, there’s a winner (someone who gets what they want), and a loser (someone who concedes).
You want to recognize very early on whether you’re dealing with someone who is a cooperative or competitive negotiator.
Dr. John Lowry is credited with highlighting this distinction in negotiation style, a distinction author Donald Miller writes about extensively in his 2021 book Business Made Simple:
“If you are in a collaborative negotiation mode and you sense the person you are negotiating with is in a competitive mode, you should switch to competitive immediately. Why? Because they are not looking for a win/win, and in order to create a win/win scenario, you need for them to join you.”
Competitive vs Collaborative Approach

Is the builder you’re contacting hungry to make a sale? Maybe you know that they’ve had a particularly slow month and need to find more buyers asap.
Or maybe you’re using New Home Buddy and can see that there’s only two lots left in a development community, in which case the builder is definitely eager to make a sale. These are opportunities for you to be competitive!
On the other hand, you might have a client who isn’t quite sure about what all they might want in their new home in terms of add-ons. They might have trouble making up their mind until they see all the options that are available to them.
In that case, you might want to enter a negotiation from more of a cooperative perspective by agreeing immediately to whatever initial listing price is set by the builder, and wait to negotiate until your client decides on all the features they want in their new home.
Whatever the case may be, you want to enter a negotiation willing to cooperate, but prepared to compete. Use your best judgement and always act in the best interest of your client. After all, your entire reputation with the builder for future transactions is also at stake!
Conclusion
Negotiating a new home transaction can be tricky, but also very rewarding!
By having a solid foundational understanding of the state of the market, availability, buyer’s rights, and inventory, you’ll be well equipped to help your client get a great deal. New Home Buddy is the new web platform designed to help you do exactly that!
Once you have a good grasp on the market and current trends, you can actively negotiate with confidence! Evaluate what you think you can get your client. Consider approaching the builder with an anchor price, and determine your negotiation style (competitive vs collaborative) asap.
As a result, you’ll be able to further establish yourself as a smart, savvy realtor who has extensive knowledge of builder deals, and someone who can get a terrific deal for their clients.
So if you’re a licensed real estate agent in Texas who wants to take their new construction home sales to the next level, sign up for a FREE agent account on New Home Buddy today!















