Why Builders May Be More Motivated to Sell Than Homeowners

Here’s something most homebuyers don’t think about. When the housing market slows down, homeowners and builders don’t always respond the same way.

Think about it. If you’re selling your house and aren’t getting the offers you want, you could make the choice to take it off the market and stay put, and wait for things to improve.

But builders? They may be more motivated to stay the course.

They’ve already invested money in building those houses. And every completed home that sits unsold means money tied up in a property, plus ongoing costs that can add up.

That’s why some builders may be more motivated to negotiate right now. And that could work in your favor.

Fewer Buyers Are Making Moves. And Builders Are Feeling It.

You’ve probably seen the headlines. According to the latest report from the National Association of Realtors (NAR), pending home sales – homes that have gone under contract but haven’t closed yet – fell 7.3% in September and 11.3% compared to last year.

Why? Higher mortgage rates are making it harder for buyers to make the numbers work. Now, that report tracks existing homes, not new construction. But we’re seeing signs of the same slowdown on the builder side, too.

According to the National Association of Home Builders (NAHB), builder confidence dropped to 29 in October, its lowest level since June 2012. Traffic from prospective buyers also dropped to its lowest level in more than a decade, excluding the start of the pandemic.

As Robert Dietz, Chief Economist at NAHB, explains:

“Demand persists, but higher mortgage rates, elevated construction costs and weaker consumer confidence are keeping more buyers on the sidelines.”

Here’s why that matters for you.

A homeowner may be able to wait for the right offer. But a builder with several finished houses sitting unsold may have more reason to get those homes sold sooner rather than later.

And that means they may be more willing to work with you than you think.

Builders Are Already Making Moves To Win Buyers Over

If you’ve always assumed builders don’t negotiate, take a look at what they’re actually doing. According to the latest survey from NAHB, in October:

• 65% of builders are offering sales incentives.
• 43% are cutting prices, the highest share recorded between 2020 and 2026.
• And 6% is what they’re typically taking off the price.

So, yes. Builders absolutely do negotiate. And with demand slowing, there’s good reason to explore just how flexible they may be right now.

That could mean asking for a lower price. But it could also mean asking for a mortgage-rate buydown, help with closing costs, or upgrades that would otherwise cost you extra.

And here’s a tip that could make a real difference.

Don’t just look at the newest communities or the prettiest model homes. Look for builders with completed houses that haven’t sold yet.

Those are sometimes called quick move-in homes or spec homes. And the longer one of those move-in ready homes sits unsold, the more reason a builder may have to consider an offer that helps get it off their books.

Don’t Just Ask What’s Available. Ask What’s Negotiable.

Don’t assume the advertised price or incentive package is the best they’ll do.

This is where having your own agent can really pay off. An agent who knows the local market can help you compare what builders are offering, identify communities with more available homes, and understand where there’s room to negotiate.

Of course, not every builder will offer the same incentives. And some may be more flexible on closing costs or mortgage rates than on the price itself.

But that’s exactly why it pays to ask.

The trick is knowing where to look, what to ask for, and how much room there may be to negotiate. And that’s where having your own agent is key.

Bottom Line

A homeowner who isn’t ready to accept a lower offer may be able to wait. But a builder with finished houses to sell has a different set of priorities. And that could work in your favor.

If you’re ready to buy, let’s look at which builders have completed homes sitting on the market in our area and see what they’re willing to offer to get them sold.