Can you negotiate the price with home construction companies?

Hello,

once you have finally decided on a house construction company (which I still can hardly imagine for us), do companies generally negotiate on the price, or should you rather try to "sneak out" individual missing parts (e.g. plastering, different tiles or electric shutters, etc.) to save some money. I know this is not a marketplace, but is there a possibility? How do companies usually react? I just don’t know if you should even ask or if it is common (like when buying a car) to inquire.

Regards, A.

A little something is always possible. However, the margins here are by far not as high as in other industries. Exorbitant discounts are therefore not to be expected.

It often depends here too - as is so often the case. This certainly also depends on your negotiating position and your negotiating skills.

It is certainly not unusual to talk about the price. Especially when you commission several trades with one company or build with a developer or general contractor. However, it is often not about the basic services, but about the specialties and "special requests" during the house construction. It can sometimes be like a bazaar there, especially when time is pressing...

I received an email today from the general contractor we had originally planned to build with, containing the following wording:

Regarding your inquiry about our prices, I can offer you that if you were to receive a cheaper house price with all the included services that you get from Town & Country from a competitor, you could, if already signed, withdraw from the house contract, i.e., there is no provider on the market who can offer the services at our price

I find that quite a strong statement. Who pays the full price? I myself am a car salesman at a German premium brand, and even there price discounts are naturally expected. Why should that not be possible with a house price (this time it has a different meaning!!)??

Ralph

Hi,
I don't know what amounts you are dealing with. But I think with a turnkey house, so many want to earn that the profit margin for the individual is rather low.
Since most of it was already negotiated before your inquiry, the discount would certainly fall solely on the general contractor and thus only reduce his profit. I find it understandable that he reacts that way.
By the way—I also terminated a customer because he "paid Trabant money" and "wanted a Mercedes." As an entrepreneur (the smaller, the more), you have to decide when you can forgo which "profit."
As a homebuilder, it also takes you a lot of effort to find out what other general contractors charge. You would have to check every material for its quality and get the prices and then put everything back together again (here I am just thinking about the wall structure). Is this effort really worth it?
This, by the way, is my perspective from the entrepreneur's point of view. As a homebuilder, I will certainly be a nuisance and question everything.
Do you no longer want to build with this general contractor?
Regards Bromi

Hello Ralph,

Who pays the full price? I myself am a car dealer at a German premium brand, and there, of course, discounts are asked for. Why shouldn't that be possible with a house price (this has a different meaning this time!!)??

In my opinion, you are mixing something up there. As a car dealer – no matter which brand – you can sometimes give large discounts. On the one hand, because the prices from the factory are already calculated in such a way that a discount is possible, because, depending on the size of the dealer, different equity prices have been agreed upon, because the manufacturer subsidizes the car or a promotion, because company cars are already cheaper due to the tax reduction for the dealer, because every dealer fears re-imports but may not refuse maintenance, and ... and .... and; I know this because I have worked in this business for many years, I have a customer who still works as a dealer at a premium brand today. And by the way, the exclusives in this industry are very reserved with discounts. It looks quite different with the Asian competition; after all, they want a big piece of the pie in Europe and therefore subsidize their products to the limit. The latter in turn forces the local dealers to grant more discounts – an unfortunate spiral, which, in my opinion, cannot work for much longer.

Translated, this means that where you receive a discount, it was previously included, or with other providers, the discount is low and mostly in the form of an “on top.”

Kind regards