|House hunting? Here's a great deal
|By Kamil Skawinski
Time was that when you heard of a home being offered
for sale with a discount or some other generous bonus, your first
thought was, "OK, so what's wrong with it?"
If you've ever shopped for a house in the past, you
can certainly be forgiven for being wary of today's incentives.
But with prices leveling off and properties now staying on the market
much longer than they used to, it's becoming more common to find
lucrative incentives offered on both newly built and existing homes.
Of course, everything depends on whether you're house
hunting in a real estate market that has cooled -- so don't expect
to encounter the same level of "incentivization" in Yuma,
Ariz., as you would find in San Diego, for example. But if you're
in the right place at the right time, you could wind up getting
considerably more than you bargained for -- in the best possible
sense -- when you make an offer on a home.
Incentives on new homes
Tom Stevens, president of the National
Association of Realtors, says home builders started offering
incentives in cooling markets, those that had appreciated the most
over the past five years. "When the situation there -- and
here I'm talking about places like certain parts of Florida, Las
Vegas, California and the Northeast -- subsequently began to shift,
home builders were among the first to react with various incentive
programs and promotions to help keep their properties moving and
to reduce unsold inventories."
High-end kitchen cabinets and counters, upgraded bathrooms,
generous hardwood flooring packages, finished basements and professional
landscaping are just a few of the common gratis offers Stevens has
heard of. "And good old-fashioned discounts and cash incentives
ranging between $25,000 and $50,000 are out there, too, as are inducements
such as paying for your closing costs, paying off a year's worth
of condo fees or paying your mortgage for a few months."
Three-quarters of the 369 home builders recently surveyed by the National Association of Home Builders said that they were now including once-expensive extras at no additional cost to help sell their homes. One-third reported that they were now also absorbing such costs as financing points on mortgages to help move unsold properties. Several even admitted to offering free vacations to entice home buyers.
Real estate analyst Jack McCabe, of McCabe
Research and Consulting in Deerfield Beach, Fla., says that
desperate developers in South Florida, for example, are now offering
potential buyers a host of generous incentives, in one case even
the free use of a yacht. "Our area's incentives really vary
by market and product type, so we're seeing just about everything
today -- points and closing costs being paid by sellers, upgraded
trim and generous kitchen appliance packages, one year of (paid)
condo fees, big-screen plasma TVs being thrown in for free, two-year
leases on luxury automobiles, even ... limousine service both to
and from the airport whenever you need it."
McCabe says he's seen sellers offering higher commissions
-- "in ranges from five to 12 percent" -- to get a higher
level of service from real estate brokers, in addition to discounted