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Builder Incentive Basics

The most hands-on approach to making your dream home a reality is to build it from the ground up. Building a home is a complex process that requires a lot of decision making. Having a trustworthy Realtor as your advocate is paramount. Your agent will support you in a number of ways, one of which is understanding and maximizing the incentives that builders offer. Niche Homes Realtor April Stilson offers her answers to common questions about the home building process and how incentives typically work.

1. What comes first, the location or the builder?

April says it depends on what is most important to you. Are you committed to a certain development because of its proximity to your place of work, schools, family, or other factors? Or are you open to a range of locations but have a strong preference to work with a particular builder for a fully customized home? Most people consider various builders and their offerings while also considering different neighborhoods and land options then make a final decision based on the whole package. Ultimately, the decision-making process can vary greatly, depending on priorities, preferences, budget, and timeline. A Realtor with up-to-date market insights is a great asset when weighing all the options.

2. What are the most common incentives? How often do they change?

Builder incentives are very common and are designed to attract potential buyers, stimulate sales, and differentiate one builder’s offerings from another’s. The specific incentives offered can vary depending on market conditions, the builder’s goals, and the type of properties being built. Due to the increase in interest rates over the past few years, most builders are currently offering lower interest rates as incentives. There are stipulations, so again, it’s important to read the fine print with your agent.

Here are some other common incentives:

Upgrades or Customization Options such as premium countertops, flooring upgrades, or additional landscaping.

Closing Cost Assistance to cover some or all of the buyer’s closing costs, which can reduce the upfront expenses associated with purchasing a new home.

Financial Incentives such as price reductions, cashback at closing, or financing deals with lower interest rates if using their lender.

3. Are incentives enough to make or break a deal?

Incentives can influence buyers’ decisions, especially in terms of affordability and added value. They often serve as a competitive advantage in a crowded market and can create a sense of urgency or excitement for buyers. Be careful not to make a hasty decision based solely on a builder incentive.

4. What role does a Realtor play in making sure that the builder is following through with the incentives?

Realtors act as advocates for buyers, negotiating the best terms and ensuring builders fulfill promised incentives. They review contracts, monitor incentives and deadlines, coordinate inspections, and provide guidance throughout the process. We’re knowledgeable about other programs, such as the First-time Homebuyers Financial Assistance Program, and have connections with reputable lenders. The cost of a Realtor is typically included in the builder’s budget so it’s important to make the most of it.

Contact April Stilson, Niche Homes Realtor.

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