I was interviewed in an article that originally appeared in the Wall Street Journal. Coldwell Banker quoted this article. This is important if you are thinking about buying a new home. We have learned so much in the last few years about how to motivate builders to accept OUR offer instead of us accepting theirs.
Well, we’ve seen in the past few months that builders aren’t raising their prices as quickly as they have in the past, they are offering raising their commission amounts to Realtors, and we’ve heard recently where builders are inflating their lot premiums, so they can offer “discounts” without increasing incentives or lowering prices. The following is an article from the Wall Street Journal discussing what builders are doing in response to their slower markets.
Faced with rising inventories of unsold homes and reluctant buyers in many markets, some home builders and developers are beginning to offer buyers an array of incentives. A September survey of 488 single-family home builders by NAHB found that 58% were offering non-price sales incentives, compared with 51% six months earlier. Buyers are more likely to be successful if they ask for upgrades rather than for a price cut, according to Rhonda Duffy, a broker in Atlanta. Among incentives being provided in Las Vegas, according to Larry Murphy, the president of SalesTraq, are: granite countertops, a $30,000 swimming pool; and a one-year pass to a local golf course that is worth about $3,000. MDC Holdings in Denver is offering $7,500 toward closing costs or $20,000 in upgrades on $375,000 homes in a Las Vegas subdivision. Portsmouth, Va. builder Waverton Homes has increased what it will pay towards closing costs from $2,500 to $4,000 if buyers used a preferred lender and close by the end of the year. For a limited time, Centex Corp. is offering the general public an “employee pricing” promotion with a 5% discount and up to $20,000 in additional incentives on select homes. (www.wsj.com)
Wall Street Journal (11/10/05); Kemba J. Dunham and Ruth Simon
Source: NAHB’s Nation’s Building News