Prudential Pacific Properties

Negotiate to Your Advantage

A reasonable initial offer is the best way to start real estate negotiations. However, other elements can also favorably influence the negotiation.

1. Focus on needs, not position. Once a party assumes a position, negotiation can become stalemated. An example of a position could be a closing date. Shifting to a needs focus would examine why that date was important and what other dates could work to meet those needs.
2. Avoid becoming emotional. Emotions get in the way of clear and logical decisions. Anger and irritation have no bearing on the transaction.
3. Allow the sellers to save face. Provide a way for the sellers to back away from a position. By offering alternatives, you give the sellers an out with grace.
4. Understand the seller's priorities. Communication is very important. Tell your sales professional the motivations behind your requests. When shared with the other sales professional, it's more likely to elicit an acceptable counter. Your sales professional can be a powerful advocate on your behalf when armed with knowledge of what you want and why.

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Realty Viewpoint: Six Signs It's Time For Home Buyers To Buy

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Negotiation Tips

1. Don't get insulted if the seller doesn't accept your offer or comes back with a high counter offer. It's natural for the seller to want to make as much as possible.
2. The members of both parties should feel like winners in the end.
3. Make your counter offer show movement. This demonstrates a willingness to deal.
4. Make sure you understand the priorities of the sellers. Your counters can focus on the higher priorities. Those that carry less weight can be used to compromise.
5. Quantify problems. Repairs or concessions should have a dollar value on them and not be left open ended.
6. Isolate major issues by getting agreement on all other points. This allows the negotiation to be just one item away. Then all energies can focus on the one final obstacle.
7. The earnest money shows how serious you are. Since earnest money is applied to costs at closing, don't scrimp on the earnest money at the time you write the offer.
8. Make sure what you want is put in writing. Count on nothing that is negotiated verbally.
9. Depend on your sales professional for negotiation counsel.

Questions to Ask Your Custom Builder

When choosing the builder for your custom home, you should interview potential builder candidates. It is important that there is a good relationship between you and the builder. Focusing on key questions will help you make the right choice.

1. Pricing
   1. In what price range does the builder specialize?
   2. How does the builder arrive at a final price?
   3. What earnest money will be required?
   4. What funds will be required for changes and upgrades after approval of the initial construction documents and when will these be paid?
2. Staff
   1. Who will supervise the subcontractors?
   2. How many persons are on staff and what are their responsibilities?
   3. How many homes per year will they build?
   4. How many homes has the builder built? What is the builder's background?
3. Procedures
   1. How will the builder communicate with you during the project?
   2. How will change orders be implemented?
   3. How does the builder handle problems that arise during building?
   4. How long will it take to build a home your size and price range?
   5. Can the builder provide you with a general schedule with the different stages and a timetable?
   6. What are the builder's procedures for drawing funds from the construction financing?
   7. In the event that there is dispute, what funds are refundable and under what circumstances?
   8. What are the details of the builder's warranty?
   9. What is the procedure for items that will need attention during the first year?
   10. What contract form does the builder use and may you take it for review?
4. Inventory
   1. What lots does the builder now own or have access to?
   2. Is the builder restricted to certain subdivisions or areas?
   3. Will the builder build on a lot you currently own?
5. Track Record
   1. What homes has the builder built in the area in your price range?
   2. Will the builder provide you with references and their contact information?

New Construction – Timing and Early Stages

The time spent building a new construction home varies greatly. It will depend upon the size and complexity of the home, permitting time line, lot topography, degree of customization, availability of materials and subcontractors, and the weather. The builder will be able to give you an estimate based upon past experience with other similar homes.

Building stages in new construction are grouped into definite categories. Your involvement at each stage depends on where the home falls in the New Home Spectrum and at what stage the home is in when you enter into a contract.

The preliminary stage focuses on lot choice, lot reservation, financing, choosing a floor plan (or designing custom plans), selecting upgrades (or deciding on custom specifications), negotiating a price, and signing a final contract. No actual construction can begin before these items are completed. If the home is close to spec on the spectrum, this stage can be very short. If the home is to the custom end of the spectrum, this stage takes more time.

The contract-to-release stage is next. During this time, the builder will secure building permits, gather bids for septic and well if necessary, and pay utility tap fees. This period can be prolonged depending on the bureaucratic process in place within each municipality that issues a building permit. If the builder is not using a standard plan, an architect will draw up a final set of plans and specifications. These will be used by subcontractors during construction.

The last stage before construction will be final buyer approval of the project. You will sign off on the final plans and specifications and decide on lot placement for the home. If this is a spec home, these decisions may already be made. If this is a custom, then your input will be needed.

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The New Home Spectrum

New construction options fall within a very wide range. Your place within that range will depend on your price range, builder selection, subdivision, desired customization, lot availability, and your preferences.

At one end of the spectrum is the spec house (nicknamed for speculation). The builder, who speculates that the right buyer will come along, plans and starts construction before there is a real buyer. Almost all decisions are made by the builder: what floor plan is built on the lot, how the home is decorated, and what amenities are included. The builder begins construction and sometimes completes the home before there is a buyer. If you buy a spec home before the builder completes it, you sometimes may choose a few items not yet in the home. This home is usually built relatively quickly.

At the other end is the custom home. Here most of the decisions are made by you: what lot to buy, which builder to hire, floor plan, specifications, decorating and amenities. Once these decisions are made, the builder will bid the project based upon cost and availability of materials, subcontractor fees, and the fees to oversee the project. This type of home usually takes longer to build because you are involved in every phase of the project.

In between are many variations. Typically, a builder will have numerous lots in a subdivision and a wide variety of floor plans. You select a floor plan and then view lot inventory. Your choices are made from a builder list of available upgrades, decorations, and amenities. Add-ons or changes in construction details will move this project closer to either one end of the customization spectrum or the other. The more you change the builder's existing plans, the more customized the house becomes and the longer it will take to build.

Sales Professional's Role in New Construction Sales

You may wonder why you need a sales professional when you're buying a new construction home. After all, no one has deeper product knowledge of the homes and specifications than the builder or the builder representative. However, the sales professional working with you provides a very necessary and valuable contribution to the sale. By facilitating builder-buyer communication, the sales professional provides perspective and distance for you to process builder input. The sales professional becomes a go-between.

The sales professional's heaviest involvement comes early in the process when price, terms, amenities, specifications, floor plan, building site, and financing are being decided. Once building actually starts, the sales professional remains involved to solve problems as they arise. The sales professional becomes a buffer between you and the builder while issues get sorted through.

A sales professional's clear head and focus on the right outcome is invaluable. By using the sales professional as mediator, the relationship between you and the builder is preserved.

The sales professional's responsibilities are summed up as:

1. Your advocate when interacting with the builder or builder representative
2. Negotiate with the builder on your behalf
3. Facilitate communication between you and the builder
4. Help solve problems that arise during the project
5. Convey necessary change orders between you and the builder
6. Facilitate timely completion of the home when possible
7. Provide you perspective to judge what are reasonable developments based on the sales professional's construction experience
8. Accompany you on the final walk-through(s)
9. Review the final HUD-1 statement
10. Coordinate and attend the closing

New Construction or Resale – What is Right for You?

The choice between a new or resale home reflects your individual preference, property availability, and financial considerations. Naturally, new homes have great appeal. Everything is fresh and new. The decorating and architecture are fashionable. In some cases you have the fun of choosing colors and amenities. Some builders allow customizing so the new home reflects your taste and style. New homes also have the advantage of current energy saving features. Insulation must be up to current codes. Heating and air-conditioning units usually feature enhanced energy efficiency. Other energy saving amenities include ceiling fans, attic fans, double pane windows, etc. These features increase affordability. Utility costs rank second in monthly cash outlay after your mortgage payment. The older the home the more dated the energy amenities. Utility costs for resales tend to be higher. Greater cash reserves on hand are wise if buying new construction. You will need window coverings, some landscaping, and maybe a fence. These expenses come very soon after your outlay for down payment and closing costs. Resales though may have other amenities that are not typical builder offerings. These could include sprinkler systems, water softeners, decks, pools, hot tubs, etc. A new home will have warranties. Most repairs will be covered during the first year and some even longer. The risk of repairs is greater for a resale. However, you can purchase a homeowner warranty at closing to lower this risk. Since resale homes come draped and landscaped, replacement and enhancement can come later. Lack of these expenses up front make resale homes the preferred choice for many. In addition resales tend to have a lower cost per square foot, compared to new homes in the same location. You may find that you get more for you money with a resale home.

Home Warranty Equals Peace of Mind

Costly repairs, especially during the first year of homeownership, could be a financial burden to buyers who have recently purchased a home. A home warranty (also known as residential service contract) offers freedom from worry over repairs.

A basic policy provides peace of mind to both buyers and sellers. Add-ons to the policy may cover a pool, spa, or other non-essential equipment. After purchasing the initial policy, there is no additional fee until the one-year renewal.

When a covered item needs repair, the homeowner contacts the warranty company who assigns a vendor to fix the problem. Instead of paying out of pocket or contacting the seller to pay for the repair, the homeowner pays a small fee and the warranty company pays the remaining amount. The warranty provides the buyer with a conflict-free remedy to home repair. Ask your sales professional to request a home warranty in your offer. If you are selling your home, consider offering the warranty as a buyer incentive.

Clean and Green

Here's a collection of natural cleaning formulas, MOST are safe and nontoxic, with a few exceptions which are clearly noted. Use the ingredients listed below when making your own alternative cleaners, most are inexpensive and you probably already have many of them in your kitchen cupboards. All can be found at your local supermarket, natural food store or drugstore. Used individually or combined, these cleaners are safe, effective and cost-efficient.

Rhody FUN on HWY 101

The Rhododendron Festival is held in Florence Oregon each year in the 3rd week of May.There have been some changes to Florence since the first Rhododendron Festival of 1908. The population has grown from fewer than 500 to more than 8,000. The streets are paved, and the Siuslaw Bridge spans the river, and computers are commonplace. The town has enjoyed many improvements in this last decade. It has a new library, hospital, convention center and justice center. Logging, farming and fishing are no longer the major industries. They have all but disappeared. The annual Florence Rhododendron Festival has grown to over 100 entries and attracts over 15,000 visitors. Each spring the wild rhododendrons bloom in the hills and fields of Florence as they have been doing for 1,000 or more years, and the white-pink flowers still represent the end of winter and the imminent arrival of summer. Each year there is a parade and a Rhododendron Queen, and each year beautiful wild flowers of Florence echo the theme of the first Florence Rhododendron Festival, “Watch Florence Grow."