Saturday
October 25, 2014

Incentives Still Help Seal Deals, Builders Say

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Incentives Still Help Seal Deals, Builders Say

While home buying has picked up, some builders say reluctant buyers may need an extra push to get moving. Some developers are offering up incentives or discounts paid by the developer at closing to help speed up deals, finish out housing projects, and sell hard-to-unload homes. 

“[Incentives] can get buyers across the finish line,” says Eric Benaim, the chief executive of the brokerage Modern Spaces.

For example, developers with Benaim—a Long Island City, Queens project in New York—are offering buyers a credit equal to 6 percent of the unit’s cost for completing a purchase. The credit can be applied only to closing costs. 

Other incentives may come in the form of offers to pay for transfer taxes and lawyer fees. Or some developers are creating special program incentives, such as Douglas Elliman in New York’s “1-1-1 buydown” program—which pays the equivalent of one point of a buyer’s mortgage interest rate for the first three years. For some three-bedroom units in a development, that could mean a more than $10,000 savings to a home buyer.

Incentives may take money out of developers’ pockets, but “you would spend the money on advertising anyway,” says Brian Meier, a Douglas Elliman broker.

Source: “Some Buildings Find Buyers Need a Nudge,” The New York Times (Dec. 16, 2012)