I recently bought a Lennar condo in Southern California. I made a low offer on a house back in May which they rejected. After six months they still had remaining inventory and wanted to close their sales office, so they dropped their prices significantly (over 20%) below what they had originally been asking (even lower than my initial low ball offer). I ended up getting an even bigger place for less money. So, yes, Lennar will drop their prices if they have unsold inventory.

Hi Brian

I am sort of working with an agent right now in the Lamorinda area, but she knows nothing about Walnut Creek, Alamo, and Danville so I have to get another agent for that area. She is vague on home values in the area because there are more factors involved in offer pricing besides comps.

I really dont think you should preface to the listing agent that your client is making a "lowball" offer to the seller. I think that sets a negative tone to start negotiations...and in Lamorinda, 50k off a 1.3 or 4MM house is not very lowball. If they were cutting 300-500k off the price that would be more in line with what I consider lowball. You need to be more positive when making offers on behalf of your client. You also need to point out market indicators, home valuations trending downward, the credit crunch, affordability, price/income ratio, price/rent ratio, homes are sitting around a lot longer now due to over pricing, and fewer buyers, and the fact that it is a BUYERS MARKET in the area. according to all the credible research firms. Here is an example:

City Overview LAFAYETTE
0.50 - 1.0 acre
Altos Research Value Statistics
Market Action Index
Median Number of Bedrooms
Median Number of Bathrooms
Median House Size (sq ft)
Median Lot Size
Median Age
2,539
4.0
2.1
43
Cold! Buyer's 17
Altos Research calculates the Market Action Index which measures available supply
relative to the current level of demand. Index value above 30 indicates conditions favor
the seller. See the section below for full details.
With inventory and days-on-marketbasically unchanged and the Market Action Index decreasing,
the market isn't sending strong
directional signal for the near-term
outlook.
To get a tightly targeted
understanding of homes in the
market, we break each locale into
quartiles. Each quartile is 25% of the
homes listed.
QUARTILES
Characteristics per Quartile
Last Month's Trend Last Quarter's
Trend Key
No Clear Monthly/Quarterly
Beds Baths
Med. Sqft Med.
Age Inven.
Newly
Median Price Med. Lot Size Listed Sold
Quartile Avg.
DoM
0.50 - 1.0 acre Most expensive 25% of homes
1 $ 2,595,000 4,648 5.0 1.0 31.0 17 1 0 104
0.25 - 0.50 Upper-middle 25% of homes
2 $ 1,442,000 3,188 acre 4.0 2.5 27.5 18 0 1 81
0.50 - 1.0 acre Lower-middle 25% of homes
3 $ 1,005,000 2,271 3.5 2.0 40.5 18 0 2 118
0.25 - 0.50 Least expensive 25% of homes
4 $ 759,000 1,462 acre 3.0 2.0 51.5 18 1 1 70

You can view the whole report here: http://www.sparrproperties.com/docs/trends/Lafayette_SF.pdf

But I am sure you already have access to this information to help your buyer get a reasonable priced home in Lafayette.

Susan - anything is possible. The reason why they want to speak to you in person, is because they don't quote pricing over the phone. As you would see on their website and other media they advertise in, they give ballpark pricing. "Starting as low as $650K". As others have mentioned to you in your past postings, if you are looking to give a low ball offer (because an appraiser said that values are falling by 'x'% or you have statistics that show this), then do it! Whats the worst that could happen, they say "thanks, but no thanks." I get the impression that you don't have an agent representing you, because your agent would be giving you the statistics to support whatever number it is that you feel is adequate for that property. For example, I had a client that wanted to offer $50K below the asking, meanwhile all the comps in the neighborhood showed a value of the Seller's asking price. Well, I explained to my client that the comps in the area don't support $50K less number, but if they felt like making that offer, then I would proceed, so long as my client was aware that it may get rejected without further explanation (plus it may offend the Seller enough, not to take any future offers from us seriously because we decided to low ball off the bat)... then I was okay with submitting an offer on their behalf. Of course, I also give the Listing agent a heads up that my client wants to make a low ball offer and gauge what their reaction may be. Sorry, I am digressing.

If you don't have an agent and you tell Lennar that, they will probably throw in some dollar amount back to you in the form of upgrades for the house. Plus if you use their "in-house" financing they will also throw in some dollar amount to be applied to your closing costs. Keep in mind, tract homes are much different then resales or other new construction in the area. I have seen some tract builders (not in Danville) sell one floor plan for $700K and then a few months later sell that same floor plan for $200K to the next home buyer. Tract home builders have no qualms about undercutting their sales. They look to move product especially when inventory is high and the market is slow. So to answer your question, go out to Lennar, see what they have to say and negotiate with them. It is like buying a new car. Do you always buy a car at the sticker price? I guess is probably not.

In Texas, at least in the Dallas/Fort Worth area, they are growing and selling a lot of homes with good discounts too. In the last few years they purchased 3 other smaller builders. They are very cooperative with agents here. In several communities they are offering a 10% commission and offering to pay all buyers closing costs in addition to price off the house if they close by december 31... It's the end of the year... there are deals out there!!!

As Fred suggested below, someone with the knowledge of the local market will know more. Be careful that they didn't overprice the houses first then to make you feel that you are getting a deal by lowering it. Get an agent to work for you, it doesn't cost you anything.

Susan,
I can't speak to what Lenar will do in Calif, as it is a different division. Here in NV they were one of the last of the new builders to lower the prices on their standing inventory and one of the last to COOP with buyer brokers. They finally gave in on both. They, to my knowledge, have stopped since their inventories finally came down. My recommendation would be to find a realtor as a buyers agent and take a drive or, based on your other post, try it on your own. You can make the offer of what you feel is a fair price and go through all the negoiations on. If you can't come to terms, it is like any other offer, you move on and keep looking. Just know that after your first visit, they usually will not coop with the buyers agent, and it may be more difficult to get assistance if you have questions or problems. Most new home builders have a restriction that the buyers agent MUST be present with a prospective buyer on the initial visit and sign in, even if you are just looking.

Good Luck!