Home buyers continue to be enticed by real estate firms and home builders with various attractive incentives.
One real estate brokerage with branches nationwide launched a cash-back program to replace the federal tax credit program that ended on April 30. In states where it has subsidiary brokerages, it offers up to $8,000 in cash credit at closing. In California, it offers a higher limit of $10,000. According to the subsidiaries, the program has been successful as more than 20,000 agents signed up for the credit program, which runs from May to the end of July.
In Florida, another real estate brokerage launched a one-percent rebate campaign to stimulate its home sales. Homebuyers are required to sign up on the broker’s website to obtain the offered rebate which is equal to one percent of the purchase price.
After the federal home buyer tax credit program expired in April, pending home sales plunged sharply in May, so real estate companies and home builders launched campaigns to replace the tax credit scheme and energize home buying again. According to a report from the National Association of Realtors, its index for pending sales of existing homes dropped by 30 percent in May to 77.6, down from the April reading of 110.9.
This was a significant decline as sales of pre-owned homes increased for three consecutive periods on a month-over-month basis before May. Under the NAR home sales performance measurement, an index of 100 means pending home sales are equal to average pending home sales in the year 2001 when the housing market was normal, as determined by NAR experts.
A lot of home builders have also been giving incentives to push up sales. Brookfield Homes in San Diego has launched a campaign in which a referred homebuyer is given $10,000 in the form of closing cost reduction, home upgrade or other options. An additional amount of $5,000 is also given for every referral. The only requirement is that the homebuyer must be a first time visitor to Brookfield and must close before the end of August.
In Las Vegas, homebuilder Lennar Corp. cut its home prices by more than 15 percent. In New Jersey, Hovnanian Enterprises has been offering options and upgrades. Standard Pacific Corp., meanwhile, increased its incentives further, effectively trimming down prices by about one percent. In Pennsylvania, W.B. Homes also adjusted its prices to be competitive, but it said that builders can make price reductions only up to a point. KB Home reported that its orders for the second quarter plunged by 23 percent so it needed to find ways to stimulate sales.
With these incentives from real estate sellers and builders, home buyers can take advantage of substantial price discounts or free upgrades that are even worth more than the federal tax credits.
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