February 19th, 2009 by Michael Oliver

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I didn’t have a lot of time to call every home builder in Tucson but I hit up the larger ones to see what kind of incentives they were offering for buyers to step up and buy from them. Mostly the Tucson builders are giving super cheap financing and paying (the incentive part) to buy the rate down really low. Some of the other builders aren’t doing a whole lot but there sticking close to their low home prices hoping that will be enough to lure buyers into buying their homes. In any event here is the breakdown also keep in mind builders change their incentives on sometimes a daily basis so what you see doesn’t mean it’s always still available (subject to change).

-Also what you see doesn’t mean you can’t get more if you have the right Realtor working for and negotiating on your behalf.

-KB HOME: $3,000 towards closing costs if you use their lender (Countrywide) KB Home preaches the lowest prices in town so that’s most of how they make their sales is that other builders can’t touch KB’s base prices. However with that being said you don’t get a whole lot in the standard home and it’s up to you as the buyer to decide what you want to pay for and what you can live without.

-DR Horton: 2% of base price of home towards closing costs or rate buy-down. DR Horton like KB Home usually offers some of the lowest prices in the area and that’s what they cling on to get you to consider buying one of their homes. 2% isn’t an amazing deal (like KB Home) but it maybe worth taking a look at because you may be able to have your Realtor negotiate a much better deal for you…….

-Richmond American Homes: Richmond is currently willing to buy down your interest rate to a 30 year fixed rate of 4.375%! That’s pretty good but look out as most Richmond Communities are a little higher in price then the other builders. With that being said you get a lot more included in the home you’re buying but just be careful you’re going to need/ use all the items your paying for. As with all builders there will be room for negotiation of incentives/ prices.

-Lennar: Lennar has some decent stuff going on a 3.875% 30 year fixed mortgage (OR) special insurance called Mortgage Payment Protection if you lose your job your mortgage payments will still be made for you. I’m not sure exactly how that works or what the incentive costs are for that insurance but it may make buyers feel better about making a home purchase. If anyone wants details about that let me know and I’m sure I can find out exactly how it works.

-Pulte: Pulte Homes is doing about the same stuff as the other builders in that on FHA loan buyers they will pay for a 2/1 buy down and here is how that works:

-1st year of the loan your interest rate is 2.875%

-2nd year of the loan your interest rate is 3.875%

-The remaining 28 years of the loan the interest rate would be 4.875%

(or) a 3.99% 30 year fixed rate mortgage with that they are willing to contribute up to 6% to buy the rate down. What this means is if your going with a conventional loan and the loan amount is small they may not be able to buy you all the way down as certain loan programs will only allow for a 6% contribution. If you have questions about this email/ call me and I can explain it in more depth. (Oh ya, Pulte says these incentives are for this weekend ONLY… not sure what happens after this weekend but I’m sure they will have something else to offer buyers.)

-Meritage Homes: Not unsurprisingly Meritage Homes has some of the most aggressive incentives in the market right now. They are offering a 4.0% 30 year fixed rate or a 2/1 buy down that would work like this:

1st year: 2.75%

2nd year: 3.75%

Last 28 years of mortgage: 4.75%

This is on top of the regular incentives each Meritage neighborhood has going (which vary a lot by area/ price range)

I think I can without doubt say that the Tucson home builders at least the major ones who make up the majority of the market are offering some really good incentives to make a home purchase. Gone are the days when they (the builders) acted as if you needed them more then they needed you. Those days are long gone, instead they really want to earn your business and offer you as a buyer a great deal to do business with them. BUT like all things this is only what they are offering up-front, if you have a Realtor with a lot of new home construction experience they will in 99/100 instances be able to negotiate a much better deal and get you maximum incentives. I happen to know a lot about the new home industry having been a builders sales representative for 4 years and it’s not uncommon for me to negotiate much more then the standard “incentives” the builders in Tucson are offering. While never guaranteed in some instances I have gotten clients upwards of double the incentives the builder was initially willing to do. That’s literally (in some cases) $10,000(s)+ on top of what a buyer would have gotten had they just taken the standard incentive because they didn’t know there was way more they could of received. It really makes a big difference. If you would like some help with your new home purchase let me know and I’ll be glad to see what I can do to help you get the best deal possible.