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New Home Builder Incentives and Seller Concessions

Owning a house is the dream of most of us, and is one of the biggest investments one makes in a lifetime. Purchasing a new home from a builder is not at all an easy task.

Owning a house is the dream of most of us, and is one of the biggest investments one makes in a lifetime. Purchasing a new home from a builder is not at all an easy task. The first task is hiring an agent, and if you end up not selecting one, then there are high chances that you may get enticed with all kinds of luxurious incentives and upgrades with many strings attached. Let us take a look at some of the incentives and seller concessions for the new home builders which may be helpful for you as well:

Builder Upgrade Incentives

Regardless of the kind of market, upgrade incentives are often offered by new home builders; although these free upgrades always have their own shortcomings which need to be figured out by oneself. The builder will agree for the upgrade only in return of one or more of the following conditions:


  • To buy at once


If you have not made your mind about that particular purchase, don't make a decision you might regret later. The builder might try luring you saying good deals don't wait, but it surely can unless it's the only home available.


  • Make a Sizable Earnest Money Deposit


Always read your contract thoroughly. Also, ask your agent about the possibility of a refund because there might be a possibility of your earnest money deposit being non-refundable.


  • Hire local Agent to Sell Your Existing Property


It is better to hire a local specialist to sell your home than a listing agent who doesn't deal in your area. A local agent will have more knowledge and will probably fight harder to maximize your profit than the builder agent.


  • Use the Builder's Lending Institution


Using the builder list can result in higher interest rates and non-favourable loan terms. Builders insist buyers get pre-qualified via their lender making sure you can get a loan.


  • Pay List Price


The upgrades offered by the builder may cost more in the long run; after all, they too have to earn some profits. Builders also gain their share from these upgrades because they buy material and appliances in bulk or at wholesale. But you, of course, will pay retail price and hence, profit for the builder. 


  • Other Luxuries Freebies 


The new home builder will pay a wholesale price for any luxury freebies. You might get a discount if you purchase these items yourself.


  • Free Vacations


The builder may advertise "Free Trip to Hawaii Worth $10,000" to lure the customers. It is advised to verify the cost of this particular holiday from other travel agencies and ask yourself if not for this free offer, would you otherwise buy this trip? If the answer is no, pass it by.


  • Free Cars


Usually, most of the free cars that builders advertise are not an outright gift of a new car. They are leases which must be returned to the dealer by the end of the lease, which typically is for 2 to 3 years. So, you may drive a car, and not owe a car, and you might pay higher insurance premiums for the privilege. 


  • Entertainment Centers


Whether it's a smart TV or home theatre, electronics decry fast. If you shop yourself, you may find models costing less than the builder's inflated value.

Seller Concessions

Anything the seller provides you will be the item you are actually paying for. For example, if you agree to pay $200,000 for a home and, the seller offers to pay 3% of your closing costs, but that doesn't usually work. Typically, you make the 1st offer, and in that offer, you ask for a 3% concession. If the seller accepts it, you could have just purchased it for 3% less. Do you really want to finance your closing costs for 30 years?

InsteadFree Articles, compare the cost of those items. For example:

  • Prepaid Property Taxes
  • Prepaid Association Dues
  • Interest Rate Buydowns
  • Discount Points
  • Prepaid Closing Costs 

Be a smart home buyer and run the numbers on these free incentives and concessions before you buy them.

Source: Free Articles from


Nancy Whitman Is a Writer and Contributor to Gold Coast Unique Homes, Leading Home Builders on the Gold Coast.

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