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New home builders giving incentives that take the cake
By Kathleen Dayton
Staff Writer
If you’re shopping for a home, don’t be surprised if you hear the real estate agent say, “Would you like a boat to go with that?”
In a softer housing market where buyers rule, home builders are creating all kinds of incentives to entice house hunters to make a purchase.
“There’s just so much choice for the buyer today that they’re taking longer to shop. It’s like going to Tanger Outlets,” said Joseph Kostelnik, director of sales and marketing for Portrait Homes.
The company’s two new communities on Johns Island, Fenwick Commons and Marsh View, come with what Kostelnik calls a “lifestyle” perk. Homebuyers are being offered a two-year membership in the Freedom Boat Club, where they can reserve a boat at Patriot’s Point, enjoy it for the day and return it without having to deal with the hassles and expense of boat ownership.
Kostelnik said the incentive complements the low-maintenance homes his company is marketing.
“Our buyers are looking for relatively low maintenance and a lifestyle, and the Freedom Boat Club incentive is a perfect part of that,” Kostelnik said. “For the purchase price of your home, you get the opportunity to go and enjoy a leisure activity that’s also low maintenance.”
Don’t care for boats? Portrait Homes has other ways to lure you into a home purchase.
“We take a look at some value as an incentive to the purchase of the home, maybe a particular payment rate,” Kostelnik said. “Every customer’s different. We apply some of that value and everyone walks away happy.”
Phillip Ford, vice president of the Trident Home Builders Association, said builder incentives will probably boost some sales.
“Is a Freedom Boat Club membership going to make you buy a Portrait home? Some things work and some things don’t, but I would think that’s probably very appealing to a lot of people and I would think that would probably be a strong marketing tool.”
Boats are just one of many buyer incentive perks that builders are dangling before buyers who have grown choosier in a housing market floating in inventory.
If you like the idea of six months’ worth of mortgage payments paid by the builder or maybe a year’s worth of homeowners association fees included in your purchase, just ask the company of your choice what they might be offering this month.
Ryland Homes’ deal of the month is a free bonus room.
Lane Gregory, a Ryland Homes sales counselor, said a finished bonus room over a garage is a $16,000 value.
“We’ve had it before and buyers react to it well,” Gregory said. “It does help create a sense of urgency and it’s a good selling tool.”
Summerville Homes just debuted its latest incentive, which is payment of moving expenses up to $5,000.
“It’s definitely motivated some people to call and ask questions,” said Cheryl Smithem, the company’s vice president of marketing. We’ve definitely had one person for whom the ‘we’ll-move-you’ sealed the deal. I think every builder is trying to figure out what will help people be able to make the decision to buy.”
If the move-in-free offer doesn’t grab a customer, there are other perk selections at Summerville Homes, Smithem said.
“Consumers want choice, so we offer the move of up to $5,000 or they can have $5,000 worth of upgrades,” Smithem said. “We also have a deal with Countrywide Mortgage. If you qualify, you can have up to six months of your principle and interest paid. There are many people who would like to buy a new home, but they need to sell their present home to do so. This could give you six months for the market to turn around.”
Terry Murphy, a real estate agent with Agent-Owned Realty Inc., said builder incentives are certainly making it harder for the regular homeowner to sell an existing home.
“For a buyer out there, some of those deals are too hard to pass up,” Murphy said. “I have had a client who was in that position. We were looking at re-sales. There was a very attractive incentive for him on new construction and that’s what he opted to go with.”
Mary Ann Meyers, broker-in-charge at Century 21 Associates on James Island, said homes are on the market an average of 90 to 120 days now, compared with instant turnaround a couple of years ago. More and more, sellers of existing homes are offering to pay closing costs, buy new appliances or make other upgrades, she said.
“Sellers are willing to improve their property,” Meyers said. “Before, they could kind of sell it as is. I think sellers have to have a house in the best shape now—re-do the floor, paint the walls, have it as crisp and clean as you can have.”
Dorothy Willoughby, a Keller Williams real estate agent, said agents have to be very creative in order to sell existing homes in the current housing market.
“I went to an open house once at Simmons Pointe and they were going to include their boat in the purchase of the house with an acceptable offer,” Willoughby said.
While sellers are working harder to compete, Willoughby said it’s a great time to be a buyer.
“There are so many choices on the market right now,” she said. “How great would it be if you were a buyer and in the position where you could pick and choose extras like a membership in a boat club? Who would have thought, two years ago, that a buyer would be able to decide what extras he wanted?”
In spite of all the enticements, tri-county new home sales from January through May 30 this year are behind last year’s sales during the same time period. The Charleston Trident Multiple Listing Service reported that 30% of homes sold so far this year were new homes, compared to 33% new homes sold during the same time last year.
Ken Roe, broker-in-charge at Prudential Carolina Real Estate’s Mount Pleasant north location, said he is about 20% to 25% off in written sales from three years ago, when the housing market was at its peak, and has about 25% more listings. There are currently more than 2,000 homes for sale in Mount Pleasant alone, he said.
“We’re still seeing a little bit of a dip, but we really feel in the latter part of this year, by third or fourth quarter, the market will be picking up a bit and in 12 to 18 months we’ll be back to a more balanced market,” Roe said.
In the meantime, builders are not only offering perks to homebuyers, they are sweetening deals for real estate agents.
“They’re offering commission bonuses to Realtors bringing buyers to them,” Roe said. “These builders are dropping boxes of chocolates off. One just dropped off a cake.”
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