- The Washington Times - Friday, July 24, 2009

New-home builders are always looking for ways to entice buyers through financial incentives or by offering optional features at no charge.

A few years ago, builders offered incentives (such as closing cost assistance) just to stay competitive with other builders. Now, builders are getting more creative with their incentives by offering higher closing cost assistance, paying condominium fees, including more free options and upgrades, helping to sell potential buyers’ homes, and even offering job loss protection in the form of mortgage payments.

Builder incentives are designed to assuage the worries of potential buyers. Even financially solvent homebuyers fear the impact of a job loss in this current economic climate. One of the more popular incentives at the moment is insurance, which will pay the mortgage payments if an owner becomes unemployed.

While builders continue to offer incentives, some Washington-area builders are finding that sales are picking up - regardless of extravagant enticements.

Potential buyers can find current information about incentives on the Web sites of builders and new home communities, but the best way to take advantage of financial or other offerings by builders is to talk directly with a Realtor or the salesperson at each development.

The salespeople often work with potential buyers to create an incentive package that meets their specific needs. For example, first-time buyers are usually concerned about the cash needed for a down payment and closing cost assistance, while move-up buyers are concerned about selling their existing homes. Incentives sometimes can be tied directly to these issues.

At K. Hovnanian Homes (www.khov.com), buyers can still obtain closing-cost assistance and get some optional features at no cost. However, most communities are selling so well that the builder is offering fewer incentives.

“We’ve actually backed off on some of our incentives because we are finding that they are not necessary [to attract buyers],” says Dee Minich, senior vice president of sales and marketing at K. Hovnanian Homes. “The $8,000 tax credit for first-time buyers is helping a lot of people pay their closing costs, and sales are increasing in a lot of our communities.”

Ms. Minich says K. Hovnanian is even raising prices in some of their communities in Prince William and Prince George’s counties, where sales have picked up dramatically. Although she says they are still paying up to 6 percent of closing costs in some communities, more often they are offering just 3 percent.

“We find that most people are cash-poor and want some financial assistance,” says Ms. Minich. “We rearrange everything to meet their needs, so if they would rather have more closing cost help than a finished recreation room, we can usually work something out. If someone wants to buy, they can usually find a way to do it - especially if they can get an FHA loan with just 3.5 percent down, closing cost help from us, and take advantage of the first-time buyer tax credit.”

At some communities in Maryland and Virginia by Ryan Homes (www.ryanhomes.com) and NVHomes (www.nvhomes.com), the first-time homebuyer tax credit has become the basis for the incentive program: $8,000 for every buyer, not just first timers. For buyers who sign contracts for a new home before July 31 and who work with the builder’s preferred lender, the builder will contribute $8,000 toward either closing cost assistance or the purchase of optional features. See details at www.nvstimulus.com.

Buyers of single-family homes built by Drees Homes Co. (www.dreeshomes.com) in some communities in Virginia and Maryland will be able to take advantage of incentive programs as long as they sign a noncontingent contract by Aug. 31. Buyers can lock in the interest rate on a mortgage loan for up to 210 days, and they can save one-half of the cost on all optional features up to $50,000. Both programs require the use of a preferred lender.

M/I Homes Inc. (www.mihomes.com) is offering a “worry free mortgage plan” that functions as a job-loss insurance program. The plan begins 60 days after the closing date and lasts for up to 16 months. Buyers can receive up to 100 percent of their principal and interest payments, up to a maximum of $1,250 per month for six months, if they lose a job because of the economic downturn.

Additional incentives, available with the use of a M/I Homes preferred lender, are extended to buyers who sign a purchase agreement by July 31. These incentives vary by community and include such items as free brick fronts, finished recreation rooms, gourmet kitchens and closing cost assistance.

Lennar Corp. (www.lennar.com) usually includes standard features in their homes that would otherwise be options or upgrades. The company offers to pay all closing costs at some of its communities and has introduced a Peace of Mind program that protects buyers who suffer a job loss. The program, which lasts for two years beginning on the closing date, protects the buyers with up to six mortgage payments up to $1,800 per month if a homeowner loses his or her job.

Pulte Homes Inc. (www.pulte.com) is offering to pay for the DreamKeeper mortgage payment relief program in some locations, which includes payment of a one-year membership in the Association of Homeowners Across America (AHAA) and one year of “involuntary unemployment insurance” premiums for buyers. The insurance pays up to $2,000 per month, based on the homeowners’ principal, interest, taxes and insurance payment for up to four consecutive months.

Centex Homes (www.centexhomes.com) is offering a $1,500 discount off the base price of its homes in the Washington area as part of its For Those Who Serve program. Qualifying buyers include active duty, retired and reserve members of the military, veterans, law enforcement officers, nurses, teachers and firefighters. Additional incentives such as closing cost assistance vary by community.

Mid-Atlantic Builders Inc. (www.midatlanticbuilders.com) offers closing cost assistance and other incentives that vary from community to community. For potential buyers concerned about selling their existing home, Mid-Atlantic has three programs.

First, the builder offers a free home evaluation service to recommend pricing, staging and home improvements that can help sell the home faster.

Some sellers may also qualify for Mid-Atlantic’s guaranteed sale program, which means Mid-Atlantic works with a preferred Realtor to plan a personalized program that guarantees the equity in the home and the maximum time it will take to sell. Mid-Atlantic also shares the cost of the Realtor’s commission with the sellers under a reduced commission program.

Ryland Homes (www.ryland.com) offers several programs that can help homebuyers purchase a home. The Reassurance Program is a two-year insurance policy against unanticipated and involuntary job loss for two years from the closing date. The program covers up to six months of payments. Depending on the community, payments covered may be up to $1,500, $2,000 or $2,500 per month.

At some Ryland communities, buyers with FHA and VA mortgages may be able to participate in a down payment matching program. The builder will match a buyer’s down payment up to 3.5 percent of the purchase price of the home, but buyers must use Ryland’s preferred lender for this program.

Additional Ryland programs include special discounts, closing cost assistance and down payment assistance for active or retired members of the military. The Community Partner Program, restricted to selected communities, offers similar incentives to employees of partner companies, school districts, local government agencies and fire and police departments.

Toll Bros. Inc. (www.tollbrothers.com) offers a variety of incentives at each community, such as $10,000 in closing costs and “dollar options” that allow buyers to add a deck or a finished basement for $1. Most of Toll’s promotions last for just one week or even a weekend at a time, so be sure to check ads or the builder’s Web site.

The Toll Dream Home event, during which the builder is offering 50 percent off all options, from structural elements to design features, runs from July 25 to Aug. 2. For details and a list of participating communities, go to www.mytolldreamhome.com.

Toll also has programs in place to help potential buyers concerned about selling their current home.

For example, the company will extend the delivery time of the new home for up to six months or longer.

Toll also offers home staging consultations and services such as painting, cleaning or minor repairs as part of the Ready, Set, Sell program.

In any situation, buyers should not be shy about asking for financial incentives, special programs, or the inclusion of optional features in their new home.

Even as the new home market in our area picks up, builders still are eager to sell their homes and are willing (within reason) to work with potential customers.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide