The housing slump may be the best thing ever to happen to new-home shoppers. Big, national builders are making unheard-of cuts in prices and offering other incentives, giving local builders no choice but to follow suit. According to the National Association of Home Builders, 75% of builders are offering incentives.
Some deals are spectacular. St. Lawrence Homes, a regional builder in North Carolina and Ohio, recently offered a new car with the purchase of a home. Under a new program, Schumacher Homes, a national custom-home builder, will make your first year of mortgage payments.
A more common incentive: free upgrades. Says Brian Kennedy, a lender in Chapel Hill, N.C., who works with several builders: "The builder may spend only $6,000 to give you $10,000 worth of upgrades, so the margin works for them and the buyer gets a deal, too." Richmond American Homes recently offered up to $35,000 toward upgrades in some parts of the country.
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Jamie and Nate Kelly of Cupertino, Cal., discovered an offbeat incentive -- airline miles. Incentive Real Estate, which has operations in California and Maryland, works with builders to bring in buyers and offers 250,000 miles for the purchase of a home that costs more than $500,000, or 100,000 miles on a less-expensive home.
Jamie, a mother of three who dreams of a trip to Hawaii, said she's seen other deals, but the miles struck a chord. "A vacation is a great incentive, especially with as many tickets as we'll need."