Incentives To Buy A Home

Builders will beef up incentives before they will drop prices in my humble opinion. In an interesting unwritten rule, builders won't reduce their price. I have found their resolve
very interesting and it seems to work.

I have only heard of once where a builder accepted a lower price and it seems there was some odd reason why. Obviously smaller builders would be more likely to drop than a bigger builder. On a side note, when the Las Vegas market dropped, a buyer bought at the top and then next home to sell was about 30% lower so he sued. I don't think he won.

So instead of dropping the price they add incentives like appliances, loan points, Association fees, closing costs, etc. But the incentives where they pay fees, dues or taxes aren't great incentives in my opinion.

In the Pearl District there are a lot of condos that are only paying a few hundred dollars a year in taxes. This is actually a great incentive when it is a 12 year tax break. Once we get within about 3 years, I would expect a lot more on the market and less buyers as the taxes increase 10 fold.

For statistical purposes, I don't like incentives or at least I don't like a home reporting a sales price of $345,000 but not the $15,000 in closing and appliances. Appraisers call agents to find out about these Seller contributions but most agents don't recall.

These things don't seem to matter until we get into a Buyer's market where many parts of the country have sliding prices. In the end we need to be informed consumers and do our due diligence regardless of the market going up or down.