Builder incentives, and how they stack with our credit

Builders would rather give you money than cut the price. A price cut becomes the comp for every future sale in the community, so instead they offer incentives: a rate buydown, closing cost help, design center credit, or a discount on a finished quick move-in home. Here's how to read those offers.

The strings attached

Nearly every incentive is conditioned on using the builder's in-house or preferred lender, and often their title company too. That's legal, and the incentive frequently makes their lender the right choice. But compare anyway. A $15,000 closing credit paired with a rate an eighth higher can cost you more over five years than the credit gave you.

Rate buydowns

The most common big incentive right now. The builder pays points to lower your rate, either permanently or for the first years of the loan. Permanent buydowns are worth more if you'll keep the loan a long time. Temporary ones (like 2-1 buydowns) mostly help if you expect to refinance soon.

Quick move-in homes

Finished or nearly finished homes the builder needs off the books carry the best deals, especially near the end of a quarter and the end of the year, when sales targets are due. If your timing is flexible, this is where the real discounts hide.

Why our credit stacks on top

Incentives come out of the builder's sales budget. Agent commission comes out of a separate marketing budget that only gets spent when a registered agent brings the buyer. They don't trade off against each other. Buyers we represent keep every builder incentive they qualify for and get half our commission back on top of it.

One negotiating note

Builders hate cutting price but will often add incentives, upgrades or closing help when asked, especially on inventory homes and at slow points in the sales cycle. That ask works better coming from an agent who sells against their other communities every week.