Builder incentives and seller concessions are sales tactics to encourage you to make an offer on a home. If you truly want a property for other reasons aside from the incentives and concessions, it may make sense to make a serious offer. It is easy to be drawn in when a builder or seller offers assistance—or a fun incentive—to purchase their property. The builder incentives offer:
Free Upgrades
Closing Costs Covered
Special Financing
Warranties
Other Deals and Discounts
Each builder may offer different incentives, according to their unique business model or method of operation, but you can expect builder incentives to comprise one or a combination of three categories: outright price cuts, financial inducements and structural/material upgrades.Therefore, many builders prefer using other home buying inducements, such as making the buyer’s initial mortgage payments, covering their closing costs or paying for their property taxes, insurance or HOA dues for a certain period.
How do you receive builder incentives- These can include trade-offs or asking you to put down a large earnest money deposit or use the lender’s preferred lender or title company. You, of course, are under no commitment to use their lender, but you may not receive the incentives or discounts otherwise.