🏗️ Is New Construction Really Cheaper? How to Run the Real Comparison and Win Both Sides

GROW WITH LIBERTAS & EXP REALTY

🎧 Listen on Apple Podcasts and Spotify!

Your buyer calls Monday morning: “We drove through that new subdivision. The new homes are cheaper than the resale homes, and the builder’s paying closing costs. Why would we buy a used house?” And your resale seller is asking the same question from the other side: “How am I supposed to compete with that?”

Here’s the truth: the sticker price isn’t the real price. Once you add the lot, the upgrades and the fees, it’s rarely apples to apples. Here’s the comparison checklist, the buyer script and the role-play for the listing agent competing with a builder down the street.

In the October NAHB/Wells Fargo builder survey, 65% of builders said they’re offering sales incentives. Builders are motivated sellers with homes to move, and that’s leverage for your buyers.

Before your buyer falls in love with a model home, ask the sales rep, “What are you offering this month, and which homes do you most want to sell before year-end?”

PulteGroup said on October 22 that more than 60% of its business now comes from move-up and active-adult buyers. Move-up buyers and empty nesters usually have a home to sell first. Every new community in your market is full of people who need a listing agent.

Introduce yourself to the sales reps at the new communities near you. “When your buyers need to sell their current home, I’d love to help, and I’ll keep you updated every week so your closing stays on track.” That’s a brand-new spoke in the wheel of lead generation.

Builders are starting about 1.3 million homes a year, compared with about 1.8 million during the 2004 to 2006 boom, Real Estate News reported on October 16. Builders aren’t about to bury your resale sellers in new homes. Resale is still most of the market, and most of your business.

The median new home sold for $410,700 in the second quarter, compared with $435,700 for an existing home. But NAHB’s own economists say the gap is mostly about where builders build and how big the lots are. Price per square foot is almost the same: $205 for new and $212 for existing, according to Zillow.

Put the new home and the resale home side by side and go line by line.

1. Price per square foot. Compare the house, not just the price.

2. Lot size. How big is the yard, and how close is the neighbor?

3. Upgrades. The model home is loaded. Price the home your buyer would actually get.

4. HOA dues and special district fees. Ask about fees like MUD or PID fees in Texas, CDD fees in Florida or Mello-Roos in California.

5. Property taxes. New homes are often taxed on the lot the first year and the full value after that.

6. What’s not included. Landscaping, fencing, window coverings, the refrigerator, the washer and dryer.

7. Builder incentives vs. the builder’s lender. Get a Loan Estimate from the builder’s lender and an outside lender, and compare the total cost and the payment.

8. The warranty. What’s covered, for how long and who handles claims?

9. Future resale competition. If the builder is still building when your buyer wants to sell, they’ll be competing with brand-new homes.

The buyer script:

Have your AI Business Bot turn the checklist into a one-page side-by-side template with your name on it. Use it with every buyer who mentions new construction.

Know each builder’s registration policy. Many say the agent must be at the first visit or register the buyer before it, and policies vary, so read it and ask the sales rep. As Julie says on the show, once reps trust you, a quick text or your buyer saying ‘I’m working with [you]’ is often enough. To be safe, tell every buyer: “If you want to stop by any new-home community, even just to look, text me first so I can register you. It means I can negotiate for you.”

The moral of the story: buyers don’t compare houses. They compare payments and what they get for them. The agent who lays it out side by side wins, on either side.

Ask your lender what a seller-paid buydown costs in your market. A concession that lowers the buyer’s payment by a couple hundred dollars a month often attracts more buyers than a price cut of the same size. And if the listing sits, our 180-day seller communication plan in Premier Coaching keeps your seller with you while you adjust.

Start by asking, nicely.

Sell what the builder can’t.

Yes. New doesn’t mean perfect.

Pre-construction vs. resale: compare the total cost and the timeline, not just the price.

Look the fear in the eye, then take one small step toward it.

The cheapest price isn’t always the best deal. The agent who runs the real comparison wins the client for life.

Your challenge this week: Build your side-by-side checklist and visit three new-home communities. Pick up each builder’s broker policy and this month’s incentives, and introduce yourself to the sales rep. Email us what you found.

Want someone in your corner holding you to it? Join Premier Coaching at https://premiercoaching.com/. Try it for 7 days for just $1.

Tim and Julie Harris are internationally recognized real estate coaches, best-selling authors and the voices behind Real Estate Coaching Radio, the nation’s #1 daily podcast for real estate professionals.

We built a team of AI specialists that handles the busywork of running a real estate business, from follow-up to market reports, so you can spend your time with clients.

👉 Meet your AI team at HarrisAITeam.com

Ready to stop guessing and start producing?

🎯 Start Premier Coaching ($1 for 7 days, then $997 for 12 months): https://premiercoaching.com
📲 Elite Coaching — text Tim directly: 512-758-0206

— Tim & Julie Harris

📬 Thanks for reading Harris Real Estate Daily. Share this with a colleague who needs clarity about where the industry is headed.

Forwarded by a friend? Sign up with just one click here.

Share this issue.