What kind of deal sweetners are sellers offering?

[InflationNation]

Originally Posted by NCMommy2-4

Oh but a Dwight Bobble Head from The Office MIGHT sway us a little LOL I am kidding. WOW sounds like you had an awesome experience. I will be happy to wait for the same situation .. rather wait longer than deal with the garbage.

We have no gimmicks on our sale. We are priced as right as we can be with very little room to play with.

Good to hear that there are good stories out there and buyers that see the reality of a nice home.. not a gimmick.

Linda

I think part of the reason some people MIGHT consider giving away freebies is to maintain comp levels. I know builders do it for this reason specifically. I wonder if some "good samaritan" neighbors consider it as well.

[VickiR]

Builders typicall offer incentives such as paying closing costs because they want to keep the prices at a certain level in the neighborhood.

Reducing the prices shows up in MLS and Wake County's website and their goal is to keep the prices consistent and then raise them every few houses.

Vicki

[InflationNation]

Originally Posted by VickiR

Builders typicall offer incentives such as paying closing costs because they want to keep the prices at a certain level in the neighborhood.

Reducing the prices shows up in MLS and Wake County's website and their goal is to keep the prices consistent and then raise them every few houses.

Vicki

I think it would be prudent for buyers to ignore any recent comps on new or recently new construction since it's unknown as to what was thrown into the deal. Or, at least, to immediately reduce at least 5% off the lowest comp if there are no incentives offered by the builder.

It's a shame that the free market isn't more transparent and a worse shame that comps on homes built recently are about as good as toilet paper.

[sls76]

Originally Posted by InflationNation

I think it would be prudent for buyers to ignore any recent comps on new or recently new construction since it's unknown as to what was thrown into the deal. Or, at least, to immediately reduce at least 5% off the lowest comp if there are no incentives offered by the builder.

It's a shame that the free market isn't more transparent and a worse shame that comps on homes built recently are about as good as toilet paper.

At least 5%? What is your evidence that builders are offering significant (non-price reduction) breaks on new construction? Moderator cut: please report posts do not discuss in forums

[MAtoNC!]

A big fat AMEN to that!

LOL at dropping the realtor off at Best Buy for a Wii

Originally Posted by North_Raleigh_Guy

I couldn't agree more. When I was shopping for a house last year, I could care less about any so-called "incentives" any sellers were offering. The only incentive I cared about was PRICE. Don't waste my time by overpricing your home by $5K and then offer me a $2K incentive to buy it! I love it when they say they will offer $3K towards closing if you make a full price offer. I will offer what I think the house is worth based on comps pulled and I am going to ask for help closing anyway. I did that last year and it worked out just fine.

The person selling the house I bought had it priced perfectly in line with neighborhood comps (An identical house across the street sold 1 month prior at the exact list price). He had it in move-in condition. The list price got it to pop up on my internet search set up by my realtor and prompted me to ask my agent to take me to see it. Once the seller got me in the door because the house was priced right the location and condition of the house sold it for him. He accepted my offer slightly below list and helped pay a couple grand towards closing.

The seller was a dream to work with. He fixed all the "minor" repairs that came up during the inspection. He had the house immaculately cleaned. He left extra paint cans so I could match the color, and an extra piece of vinyl siding for any future repairs.

30 day close...no issues.

Successful Transaction!

Happy seller, Happy Buyer, and happy RE agents.

No Nintendo wii, bobble-head dolls, or free cars needed.

If I ever find myself working with a realtor who is so desperate for a nintendo Wii that he will push a house that offers a Wii as a bonus to him/her I will drop my "former" agent off at Best Buy while I go interview other RE Agents who will work to find the right house for me.

I really love the part of the article where the guy says he sold the wii to an "aquaintance" for twice the value. Gee what a pal..... He sounds like the type of person who would charge visitors 25 cents to use his bathroom!

[sundaze]

I wouldn't call it dishonest for builders to offer incentives instead of lowering the selling price. For one thing, many incentives may cost the builder less than the buyer -- he can probably buy a refrigerator for less than you for example. If an incentive is something you want or need otherwise (for example, closing costs) it should not matter to a buyer if there is a price reduction or incentives. Let's say a builder offers a refrigerator, washer, dryer, granite, built in speakers, blinds, floor upgrades. He can probably do all this for less than you and you might end up spending less. The thing one needs to look out for with incentives of this nature is not to be financing things for 30 years that don't last that long. It is all about marketing and making the package appealing to the buyer.
I bought from a builder and got NO incentives. If someone looks at the price I paid it is not misleading. I used a good buyer's agent and got what I consider a good deal. I don't think you can generalize that comps are overstated. I do think you need a good buyer's agent who is familiar with the area and the builder.

[VickiR]

Originally Posted by sls76

At least 5%? What is your evidence that builders are offering significant (non-price reduction) breaks on new construction? Also, it's uncanny how similar your views are to Frudy McRomson. Just an observation.

Moderator cut: off topic

Unless you work with builders on new construction, you simply can't make an overall statement such as those that have been made. This proves my point that if you are not involved in our housing market in the way that most Realtors are, your opinions are simply opinions, whereas my statements are fact. I'm just here to educate and be helpful.

I always appreciate those that understand that.

Vicki

[Frudy McRomson]

It's simple. Builders use dubious methods to try to control prices. It's their prerogative to do so. It's not illegal, but it's certainly unethical. I would just recommend anyone who's looking into new construction to operate under the assumption that recent buyers obtained copious amenities in a builder's direct attempt to hide falling prices. As a consumer, why not fight back and ensure you're getting a fair shake? If you're not into granite countertops, then just knock off 5% from the last comp and tell them to pound sand if they complain.

I guess people fight this because they don't believe in free market forces. At least, when it doesn't work in their favor.

[VickiR]

Originally Posted by sundaze

I wouldn't call it dishonest for builders to offer incentives instead of lowering the selling price. For one thing, many incentives may cost the builder less than the buyer -- he can probably buy a refrigerator for less than you for example. If an incentive is something you want or need otherwise (for example, closing costs) it should not matter to a buyer if there is a price reduction or incentives. Let's say a builder offers a refrigerator, washer, dryer, granite, built in speakers, blinds, floor upgrades. He can probably do all this for less than you and you might end up spending less. The thing one needs to look out for with incentives of this nature is not to be financing things for 30 years that don't last that long. It is all about marketing and making the package appealing to the buyer.
I bought from a builder and got NO incentives. If someone looks at the price I paid it is not misleading. I used a good buyer's agent and got what I consider a good deal. I don't think you can generalize that comps are overstated. I do think you need a good buyer's agent who is familiar with the area and the builder.

You are correct, sundaze.

I sold a KB Home recently. It was an inventory home. The base price was something like $180s but the options brought the house up to the $220s. So the $40,000 in options were the RETAIL price given to the buyer. That $40,000 in options may have cost KB $20,000. Therefore, we knew we had plenty of room to negotiate.

Most buyers don't worry about financing the washer and dryer for 30 years. It doesn't seem that people stay in their homes that long anymore. I think the national average for moving is about 5 years and the average for the triangle is about 4 years. Sure seems that way with my clients!

The idea is to understand the builder's pricing and to get the best price. That makes my buyer happy and that makes me happy!

Vicki

[PennyH]

You'll find the best "deals" are on homes that are already completed, with a lot of options built in that you may or may not want. Some of the big builders are advertising specials, but ask a lot of questions when you get there. Most require that you close within about 3 weeks, have about 5% cash down, and use their lender in order to get the deal. I've got a top 10 list of questions to ask before going for a bargain but not sure if I'm allowed to post that here! Bottom line - use a real estate agent, which costs the buyer absolutely nothing. And no, I'm not an agent!

I read that article too, and there was a lot of focus on just a few cases. But overall, even though the market is down from last year, we have to keep in mind that last year was the peak year in the Raleigh market. In October 2007, 30% of the homes sold had only been listed for 30 days or less! The best homes are still going fast.

Not only that, the number of homes that sold after being on the market for 4 months or more actually DECREASED by 6% in the same time period.