When the housing market is hot (very active, with many buyers and sellers), people line up (wait, ready to act) eagerly for new construction (newly built) homes. These homes are often built in large numbers in one location (called a housing development) with many of the homes looking alike (the same). Housing developments crop up (appear suddenly) all around medium and large cities to accommodate (house) people moving there for jobs and other opportunities.
In a slow (not active or busy) housing market, housing developments are still being built, but buyers aren’t as eager to buy, and that’s why home builders offer incentives — extra good things — to entice (attract) buyers. These incentives include cash (money) and upgrades (more or better than the basic).
For example, builders may offer to pay some of the closing costs associated with buying a home. In the U.S., when you purchase any property, there are taxes and fees that the buyer and seller have to pay as part of the transaction (exchange or purchase). They include fees for inspecting (closely examining, looking for problems or whether laws have been followed) the home, for the costs of registering the sale, and for insurance. These closing costs are approximate 2 to 5% of the price of the home. That’s a lot of money! Some builders are offering to pay some of those closing costs as an incentive to get people to buy their houses.
In terms of upgrades, builders are offering many things to make homes more attractive to buyers. These include free appliances, such as refrigerators, ovens, and washers and dryers. They offer better flooring (material that covers the floors), so that, for example, instead of carpet, you get hardwood floors. They may offer more expensive window coverings, such as wood shutters (wood panels to block out light on the inside of a window) and blinds (window covering that can be pulled up or down for more or less light, or that has moveable slats (small sections) to let in light).
Are incentives commonly used in real estate (the business of buying and selling homes and other property) where you live? If so, what kind?
Photo Credit: Ranch style home in Salinas, California from Wikipedia
Hi Lucy, thank you.
I am not aware of that over here. I am not sure, one guy once told me you could get free appliances as well.
When I bought my current home in a three story building there was not such a thing.
I only got some furniture the old owner did not want, and I kept it.
It is a small apartment of 50 square meter 538.20 square feet, I can even tell you how much I paid for it.
It was 110.000 €. I am giving out this piece of information just for anyone wanting to compare their local prices.
hi guys, am just wondering if my good friend Emiliano is still alive , if anyone knows, please tell me.
here it is Emiliano alive for the moment and still willing to make a lot of fuss in this world my friend.
Where have you been these months dear Talal? how is life going on?
Are you well?. I hope so.
The old chap are not here any more, dear Betty wrote less, I think she is very bussy, dear
Peter vanished away and we have not any news from him.
Dear Tania, our great poet, is still with us and now we have a lot of new Friends in the Blog.
Emiliano, the chap who inagurated the Blog is still alive and writing too long some time
till the point Dan siad to him…….it is enough don´t be so tiresome emililano, ja, ja, yes that´s true
and he was centernly with lot of reasons to said that.
Just a pleasure Talal, pleas tell us about you life dear friend.
The Housing market is very slow at this time of the decade.
It is mostly because most housing developments are built by the government.
When the president and his administration changes, so does the price of housing.
There are some entrepreneur who also involved in the industry, however.
I know of a construction company owner who called it for bankruptcy a few years ago. “The fall in the value of real estate”, he said, “made me to short-sale the houses. I couldn’t get the money I spent on building the houses. Of course, I had borrowed the money from the bank. When the loans due, I couldn’t pay back the money I had borrowed. Therefore I lost my houses and the money.”
I will never buy a house in a housing developments, since many people are crammed in a small space, and most often the walls are so thin that you can easily hear what other family is saying on the other side of the walls. of course I have never lived in that situation, but a friend of mine once owned a one-bedroom apartment at one these housing development in a town, 20 miles away from the downtown.
I once visited her, and realized that the constructor hadn’t done a good job building the houses.
I never wanted to go there, cause sometimes the neighbors would say something that we were not allowed to overhear (of course we didn’t intend to to hear but we heard).
And I insisted her to change her location.
From that experience I have had a bad mindset about this housing complexes.
No number of incentives can make me think into buying any of these houses.
Although it is easy to buy a house this way. I mean they offer a lot of incentives, including a long term loans on the hows, that you would give a downsize payment (monthly payment) to the bank, and you settle in the house as soon as you get the mortgage.
As I said, they are not safely built and the quality of the construction materials are not very high.
And, sadly, some builders cheat, making the house look better while inside the quality is not as good as it’s supposed to be.
I was reading that over here (Italy) there are economic/financial incentives
for young couples first house buyers.
Not everyone can access the program though.
There are incentives both from the federal government in Rome, and the regional government here in Lombardy.
yesterday the news was all about Kennedy’s assassination fifty years ago.
Hey Emiliano and Aecio why do not you tell us how you got the news at the time
and what people said.
What prompted you to get to this subject?
Here I see these housing programs coming out here and there.
But the prices they sell are not in a typical family’s reach.
(Even though these construction plans here are called “cheap” housing programs!)
When it comes to real estate market,
1) Here you can buy a family house with its own compound, usually within the city.
2) Next, you can own a condo with special decoration and special upgrades, and yes, special price!
3) The other choice is purchasing a flat or an apartment in a multi-stories constructions.
OK, here we have this exchange rate: 1$=950Ks (approximately).
In general, we don’t get any mortgage from government to buy assets like houses.
So we’ve to go with our ways to own a house, I mean without any special loan from the state’s authority.
A family house like the Ranch style one in the photo you put up there is worth well over 100,000,000 Ks here.
Doing the maths, we get 205,163$ for US dollar equivalence.
A condo’s price is roughly somewhere between 50,000,000Ks and 100,000,000Ks.
It’s last two years or so, these four-level buildings cropping up hither and thither in the township
where I live. In a four-floor building, there are two apartments facing each other on each storey.
An apartment on a ground floor in a such multi-storey construction is normally sold for a little
bit more over 10,000,000Ks. The one on an upmost floor is worth 7,000,000Ks more or less.
When I and some of my friends came to this capital city, Yangon, we had to rent a flat for 60,000Ks a month. We had six-month leases.
Yes, most of the time they hold promotions and give the customers incentives, usually special
discounts, slashed prices, and like you said, co-paying the closing costs.
For middle-class families here, to own even a flat in a capital city like Yangon is still kind of chasing a rainbow, still a pipe dream!
Well, that is enough. Let me get out of real estate for now! 😉
Thank you Lucy for the post and for the meaning of the word “crop up.”
I familiar it with the meaning “to cut some parts off something.”
I know of about “crop circles.” Now I get a hang why they’re called so.
Myo ko ko
From right here in the centre of a crop circle! 😉
Real estate again eh? right now, my respectable government are doing its best to channel the market
They offered a credit package of 30.000 billion dongs (anywhere nearby 1.44 billion dollars in equivalent) in the hope of
bailing the market out of the economic downturn. Beside that, they also agreed to let in-trouble entrepreneurs
(the owners of housing plans, not the brokers) turn their commercial projects into social projects where they can meet
the real demand. But most of the plans are multi-stories buildings.
It’s really hard for us, ordinary people, to afford buying a house with its own ground plot. it depends on where your plot is, of course.
But on bustling routes, streets, a small plot of 100 square meter (approximate to 1074 square feet) is anywhere
from 700 thousand to 1.5 ml US dollars. Obviously that there is a ready-to-move-in house on the plot.
But most of the time, people they would take down the old one and build up another one for their own style. That is a plot for row-houses.
There is a new, green borough in my city where you can find a town-house at the same price the aforementioned one. A western-style house such as
bungalows, duplexes in that green borough is even more pricey, 3 ml for each of those. It was for like, back in the day where the market
was still hot. Even though, now, one unit in apartment building is far much cheaper but it is still out of reach for some. 60 thousands is not a small amount of money, right? 😉
Back to the aid package from the government, It’s a shame of them to say that they have just disbursed 1% out of the capital.
That matter had just been disclosed by journalism couple days ago. With rigorous points, not much people can meet the standards of the package!!!
We, consumers, are still biding the time, waiting for the ripe time to get a better deal 😉
Nope, for incentives…? I don’t think we have such practice here. I think the brokers they would subtract directly into the price
the more lower their price is, the more likely for them to sell out the house 😉 …they are on the rush, otherwise, they will go bankrupt 😉 not us 😛
Yes Jeff of course, here in France, there are the same technical of sale.
When you buy a flat to a real estate developer, it can offer you some free benefits like a kitchen with all appliances such as an refrigerator, oven, all kitchen furniture and so forth.
Sometimes they offer you notarial fees which allows you to own the act of sale. That represents 2,5% of the price of sale.
That’s a lot of money.
These incentives are made in order to attract people and it’s work !
See you soon