Real Estate Companies Get Creative With Incentives, Rebates, Discounts

In a down housing market, every real estate company (and the sellers they represent) are doing all kinds of things to maintain their business, offering assorted freebies and getting creative in their efforts to get potential buyers to commit.

Many real estate companies have instituted new programs in an effort to convince potential home buyers to become actual home buyers, offering incentives, rebates, discounts and other, often creative, enticements to pump up sales of new homes and existing homes.

Real estate incentives range widely and national companies often offer different incentives in different markets.

Examples of Incentives, Rebates and Discounts

• No closing costs
• No payments for three (or six, or more) months
• Lower-than-market interest rates
• Upgrade all appliances
• Up to $10,000 toward a built-in swimming pool
• Free Landscaping
• Builder will pay property taxes for first year (or two years)
• Free car, plasma TV, exotic vacation, personal chef, etc.
• Free home renovation or home center gift card of $250 to $5,000
• Price cuts up to 10 percent or more on some new homes
• Deep discounts for a quick sale

In addition to traditional real estate companies, buyer’s agencies and even private sellers are also offering incentives.

Internet-based New Homes Realty, Inc., the largest buyer’s agency in the U.S. with more than 300 brokers and agents in 24 states, today (Aug. 1, 2007) kicked off rebate and incentive programs in four states:

• In California and Utah, New Homes Realty agents are offering a Buyer Rebate Program that gives up to 20 percent of the real estate commission back to the buyer at closing.
• In Nevada and Virginia, New Homes Realty agents are offering a Gift Card Program, with a $250 to $500 gift card to Lowe’s Home Improvement Centers at closing.

Both of the New Homes Realty programs run through the end of 2007.

According to a CNNMoney report, many sellers, especially developers of new homes, prefer to offer discounts off the selling price as a rebate or offer to pay closing costs or offer low mortgage rates or deferred mortgage payments instead of showing a discount on the original price of the home because they don’t want complaints from previous buyers that they lowered the actual sticker price of the home.

Private sellers of single-family homes, condominiums or townhouses, often desperate to make a deal, have also devised creative ways to consummate sales.

According to the CNNMoney report, the sellers of a Denver condominium offered free, first-class, round-trip airfare to Europe or a bottle of rare wine worth thousands of dollars to buyers in an effort to move their condo, which had been on the market for more than a year. Another seller was offering a month of massages and a personal chef “for a while” in the hope of completing a sale. Another was offering 20 percent off the asking price for a quick sale.

Another broker quoted in the CNNMoney report was giving away a Lexus automobile as an enticement to complete a sale, but no longer does so. “It was different then,” he said. “Now, price is the prime motive for buyers.” 

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