BUILDER INCENTIVES CAN ENHANCE AFFORDABILITY

When rates began to climb, the area’s new-home builders pulled from their sales and marketing toolkit a tactic that had, in recent years, fallen by the wayside. Commonly referred to as “incentives,” it is simply an amount of money the builders are willing to “give” in an effort to encourage buyers to purchase.

For the most part, the funds are flexible. Buyers can use them to buy down interest rates, either short-term or long-term, thereby addressing the affordability issue. 

When interest rates were nearing 8 percent, those who applied their incentive dollars to interest rate buydowns were able to reduce their mortgage rate to between 4 and 5 percent. Quite a substantial savings that could make the difference between qualifying for a mortgage or not. 

But not all buyers choose to use incentive dollars to lower their interest rates. Higher-end buyers tend to apply such funds to design center upgrades or closing costs. Of course, the design center is a profit center for the builder, so it is a win-win. The builder keeps the money in-house, and the buyer gets that amazing kitchen.  

While flexible incentive money is being used throughout the nation, a recent report by Zonda, an industry market research company, shows that Florida has the largest share of communities using incentives as motivation for buyers to commit.

And to drill down even further, the report showed approximately 80 percent of communities in the Orlando market are on the incentive bandwagon.

So whether you are in the market trying to qualify for your first home or you are a seasoned buyer looking to move up to that fabulous next home, Central Florida’s homebuilders are ready to make your dream a reality.