Anxious Home Builders Pile on Incentives to Attract Home Buyers.

With the housing market looking increasingly frail, home builders and real-estate agents are going to new extremes to attract buyers, dangling lavish incentives and slashing prices.

While the Triangle area, which includes Raleigh, Durham and Chapel Hill, is not affected by the housing market downturn in the lower price ranges below $400-500k, the inventory of homes above $500,000 is experiencing some of the national slowing trend.

In Raleigh, North Carolina home builders are offering to pay two years of property taxes and insurance- worth as much as $150,000 on houses priced as high as $2.5 million- for buyers of completed homes in upscale areas of Research Triangle Park, NC.

Home Builders in neighboring states are offering as much as $100,000 off the cost of upgrades ranging from granite countertops to a conservatory. Some real estate agents are offering to pay some months of mortgage payments on estate homes.

Across the country, the theme is the same: Home builders and home sellers are juicing their efforts to unload single-family homes. Among other things, they are offering buyers cash discounts of as much as 20 percent, throwing in a pool, and agreeing to finish the basements, garages, and other spaces at a cost of several thousand dollars- incentives much richer than builders were offering as recently as six months ago, when the downturn didn’t look as bleak. In the Triangle area, home sellers are offering trips to Paris and other exotic areas.

Tips for purchasing in a Buyer’s market
How to get concessions from home builders:

• Buy a finished home: builders want inventory off their books and they may cut the price substantially.
• Have a pre-approval letter: This shows a builder you have financing already in place.
• Close quickly: Wrap up a purchase within 30 days; builders want to sell before the next bank payment is due
• Avoid contingencies: Don’t make your purchase contingent on selling a home or finding financing. A contingency removes most of your negotiating power.

These tips apply to any market conditions, however, in a seller’s market the concessions will not be as great.

What Home Buyers Want: Top Preferences when purchasing Home

More home buyers want extra garage space with two or more spaces in their homes, according to the “2007 Profile of Buyers’ Home Feature Preferences,” which was released by the NATIONAL ASSOCIATION OF REALTORS®.

The number of buyers expressing a desire for oversized garages grew 16 percentage points since NAR's last survey of buyer preferences in 2004. About 57 percent of home buyers surveyed now say they want an oversized garage. What's more, among buyers who purchased homes without big garages, 56 percent said they would have paid more for an oversized garage, compared to only 6 percent in the 2004 survey.
NAR's latest home buyer preference survey, which reports responses from buyers who purchased homes in 2006, asks buyers about the importance of 75 home features and room types.

What They're Shopping For

Other priorities for today’s home buyers include:

• Air conditioning: three out of every four respondents surveyed ranked this as “very important.”
• Master bedroom walk-in closet: 53 percent of buyers rated this as an important feature in a home.
• Hardwood floors and granite countertops: each gained 7 percentage points in popularity since the 2004 survey; 28 percent and 23 percent, respectively, of buyers labeled these home features as very important.
• Cable/satellite TV-ready: 46 percent, a growth of 6 percentage points from the 2004 survey, said this was important.
• Energy efficiency: especially among new-home buyers — 65 percent of new-home buyers said energy efficiency home features are very important compared to 39 percent for buyers of existing homes.

Buyers also said they're willing to pay more for these extras. For example, 65 percent of buyers said they would be willing to pay a median $1,880 extra for a home with central air conditioning. One out of four buyers also was willing to pay a median of $4,760 more for waterfront property.

Regional Preferences

What home buyers want in the South, however, is not always what buyers in the West want. The survey identified some of the following regional preferences in home features:

• Home buyers in the South and Midwest viewed central air conditioning as a priority, with 91 percent and 81 percent, respectively, saying this feature was very important.
• Sixty-six percent of buyers in the South thought a walk-in closet in the master bedroom was very important, while 61 percent of Midwesterners valued an oversized garage.
• In the Northeast, the highest percentage of buyers placed a premium on a backyard or play area (53 percent), followed by central air conditioning at 41 percent.
• Two-thirds of buyers in the West want oversize garages (66 percent), followed by central air conditioning at 59 percent.