The latest survey taken by the National Association of Home Builders indicates that 56 percent of builders are now offering incentives, up from about 45 percent a year ago.
As home builders juice up their efforts to unload inventories, the most common incentives they're offering include paying two years of property taxes and insurance or several months of mortgage payments. Other popular incentives include basement and garage upgrades and the addition of pools. Plus, 15 to 20 percent off the purchase price is being given in many areas.
Builders generally try to avoid outright price markdowns, in part because it angers prior home buyers who don't want prices in their subdivisions forced down. These days, however, some builders have had to resort to them "because it's all about avoiding bankruptcy for some," says Gene Rivers, a Keller Williams associate in Tallahassee, Fla.
Getting a Good Deal
Here are some tips for getting the best deals from builders:
- Buy a finished home: Builders want these off their books.
- Get a pre-approval letter: This shows a builder that the buyer has financing already in place.
- Close quickly: Wrap up a purchase within 30 days; builders want to sell before the next bank payment is due.
- Avoid contingencies: Don't make a purchase contingent on selling a home or finding financing.
Source: The Wall Street Journal, Jeff D. Opdyke (08/09/07)