Why Did the Builder Raise the Price? And Can You Still Negotiate?
A reader recently shared their frustration after seeing the price of a new construction home go up by $20,000 a few days after visiting the model home. The increase felt sudden and unfair. So what gives?
Let us talk about what is really happening in today’s new construction market.
Builders Do Not Just Raise Prices Without Reason
While it might feel arbitrary, most builders raise or lower prices strategically. In normal times, they adjust prices to manage the pace of sales. If a community is selling too quickly, they raise prices to slow things down and avoid overwhelming their crews. If sales stall, they may lower prices or offer new incentives. Builders manage supply and demand to maintain their operations efficiently.
But today’s market is not normal. Many builders across the country are facing rising costs due to new tariffs on imported materials, including lumber, steel, and manufactured goods. These tariffs add thousands of dollars to the cost of building each home. To preserve their margins, builders are passing those costs on to buyers. That is why you are seeing price increases even when resale homes nearby are sitting on the market.
Buyers Often Do Not Realize They Can Negotiate
Here is the real surprise. Just because a price is listed does not mean it is final. You can negotiate with builders. And you should.
Many buyers assume new construction pricing is non-negotiable, like shopping at a retail store with fixed prices. That is not true. Builders are often willing to offer concessions, especially if you are a serious and informed buyer. Even if they will not lower the base price, you can ask for upgrades, reduced lot premiums, closing cost assistance, or even a mortgage rate buydown.
For example, instead of pushing for $20,000 off the list price, consider asking for:
- A premium appliance package
- A finished basement or upgraded flooring
- A credit toward your closing costs
- A reduced interest rate with their preferred lender
You would be surprised how often builders say yes when you ask the right way.
Do Your Homework Before You Make an Offer
Builders have room to negotiate, but you need to come prepared. Know the comparable sales in the community and the surrounding area. Research which models are selling and what incentives are being offered elsewhere. Walk in ready to present your case. Be confident but respectful. This is a business transaction, and builders respect buyers who know what they are doing.
Also, having a real estate agent experienced with new construction can be a game changer. A good agent knows how to ask for the right things, when to push, and how to protect you from hidden fees or unfavorable contract terms. Do not skip representation just because it is new construction. Builders usually pay the agent’s commission, not you.
Final Thoughts
Prices are going up, but so is your power to negotiate. Do not let sticker shock keep you from asking the right questions. If the price went up because of tariffs or market strategy, that does not mean you are stuck paying more. Look for leverage. Ask for value. And remember, the listed price is just the starting point.
If you are thinking about buying a new construction home and want help negotiating the best possible deal, reach out. I can connect you with a vetted expert who will help you ask the right questions and get the most for your money.
