It’s Still A Strong Buyer’s Market – With Deals Abound

Recently I had a buyer under contract to buy a new construction home from an area builder. The buyer originally wrote the purchase offer on the home as a dirt start nearly eight months ago. My buyer ran into some unexpected problems and could not close when the home was ready. The builder quickly agreed to extend the closing by 30 days with no penalty to the buyer. Then, my buyer confessed that she had to spend about $15,000 of her required $20,000 down payment. The lender suggested a different loan program that would allow the buyer to close with her limited down payment. This presented another problem. The buyer’s monthly payment would increase above what she was comfortable paying. So, it was the builders turn to again to decide how badly they wanted to keep my buyer happy and see her at the closing table. Unbelievably, the builder ended up contributing 6% of the purchase price toward buying down the buyer’s interest rate to allow the monthly payment to be tolerable to my buyer’s budget. In thirty years of selling homes, I have never seen builders so "cooperative" in their business decisions.

The first rule of successful negotiations is: “He who cares least, wins.” In my recent example, the buyer clearly cared least. After all, the most she had at risk was a very small $2,500 earnest money deposit. (This is a topic of a future Denver Real Estate Blog). On the other hand, the builder had thousands and thousands of dollars of lost profit at risk because our "buyer's market" would not likely produce another buyer in a timely manner.

Nothing should be considered out of the question when writing or negotiating a contract. The point is, we really do still have a very strong “buyers market” in the Denver area.