Here's an issue an HP'er brought up in BubbleTalk - cut the price or add an incentive? As you know, the homebuilders are mainly going the incentive route so as to not destroy the "median new home sales price" number, and also to keep some integrity in their pricing so as to not piss off their recent buyers (who'll sue).
By the way, this is why the NAR's numbers are bogus.
So what do HP'ers think the seller should do?
Are there pros and cons to incentives vs. price reduction besides bringing attention to a property? Who pays taxes on the incentive? Is there anything else he should consider before going through with the incentive idea?
August 15, 2006
Cut the house price (another) $20,000, or throw in a free Jeep?
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45 comments:
under what circumstances would the FB have to be able to sue the HB? prices fluctuate, there's nothing in the contract stating prices wont go down.
how about a written guarantee that the house value will only go up forever and that the builder won't undersell me toworrow.
or tomorrow as we say on this side of the atlantic.
You're right Frocco, there is no such thing as a free lunch. But wait, who here is a marketing expert?
Oh right, Keith.
So why do people go for worthless incentives? As the previous poster pointed out, a 30 year loan on a depreciating asset doesn't sound like such a hot idea. Yet we all know that "free" cars, plasma tv's, or "employee pricing" drives sales. Why does it work Keith? ;)
How about selling housing crash insurance so that you're guaranteed never to have negative equity?
The NAR should be selling that insurance. LOL
os - because people are stupid.
hope that's clear enough
if I was selling a home, I'd throw in a trip to vegas, a lexus and a steak dinner to ruth's.
that'd to the deal. not that silly $50,000 discount. People want the wheel of fortune prizes. Cash is cheap.
cars, plasma tv's, or "employee pricing" drives sale
sure but let me add this to your equation Osman, you need the car to get to work but i will buy used before I would even consider a new Piece of shit throw away. Keep it.
Plasma tv Ehh! ya have one but i spend far to many hours working to support the family to even enjoy it.. Keep it!
"employee pricing" You know that is total bullshit..Keep it.
$30,000 off of a nice new home..again keep it the new shit being built today could not with stand a cat2 Hurricane here in the North East, Cheaply built, Cheap Use of materials
(if it looks good they will buy it, screw quality this is money man, this is money!)
So it should be Cheap to buy.. I know I bought in 93, there is not a friggin house out there worth what people are selling it for and you know it..After all a house is just a place to store your shit, and keep your ass warm..it is not an asset.
I was thinking about the reasons for using incentives and the only thing that I could logically think of was as follows:
Comparing two MLS listing (er, a lil redundant I know), it is difficult to compare the relative value of two properties.
In a market where it is perceived that there are more houses than buyers, the seller needs something to attract the buyer besides price. So price competitively, AND provide something to get them to come to see the house.
I mean all the MLS listings today say "Won't last at this price" or "Reduced!" or whatever indicating that there is some kind of good deal. So the little perk gives you a little, low-cost (relative to the price of the home) marketing edge to get people to come by.
Jim Cramer's Stop Trading! Sweet Home
By TheStreet.com Staff
8/15/2006 3:49 PM EDT
Rallies in Deere (DE - commentary - Cramer's Take) and Home Depot (HD - commentary - Cramer's Take) show that weak consumer spending is a figment of some people's imaginations, Jim Cramer said on CNBC's Stop Trading! session.
Cramer said Wall Street and the media have been wringing their hands about the sharp decline in discretionary spending that they say will accompany any drop in housing prices. But Cramer said bullish comments from management on Tuesday's Deere and Home Depot calls suggest those fears are wildly overblown.
"A lot of discretionary spending is going on," Cramer said. "Your home is not imploding."
Cramer added that strength in Deere's lawnmowing business should protect the company from pullbacks in spending on home construction, and that complaints about executive compensation at Home Depot have grown old. "Maybe Nardelli isn't the biggest jerk after all," he said of the Atlanta-based company's CEO.
Cramer said "everyone's a winner" in Tuesday's marketwide rally, but he cautioned that the good feelings could be fleeting.
"There's a bet being made that Ben Bernanke's a genius," Cramer said, laying out the so-called soft-landing case that depends on Fed chief Bernanke rolling up interest rates enough to contain inflation fears without starting a recession. Cramer cautioned, though, that the Bernanke rally could evaporate Wednesday should the consumer price index show a stronger-than-expected increase tomorrow morning.
How a about a free - wife?
Oh Honey - wives are never free!
Yes they are. When you kick them to the curb they become free.
I bet you wives were the cause of stupid decision their husbands made, just to live in a McMansion, overinflated house.
Bernanke, Cramer, who’s next, who cares! Say one thing, mean another! Markets up, and everybody who said it would go down is a dope. Market crashes, and everybody who said it would skyrocket is a fool. For ONE STINKING TIME, I would like one
of these yo-yo's to come forth with an opinion and NOT leave themselves a convenient "OUT"
. No flip-flops, no add-on conditions in the second sentence. This is the way it will be, take it to the bank, and I stand by it 100%. Forever! That would be refreshing, even if he/she were dead wrong! Like that’s EVER going to happen in news, or politics!
keep it clean folks.
Borkafatty is an idiot,loser, bitter, liberal Dem. He wants to marry Skytrekker.
"After all a house is just a place to store your shit, and keep your ass warm..it is not an asset."
Smart guy.
Borkafatty is an idiot,loser, bitter, liberal Dem. He wants to marry Skytrekker.
Really it is good to know you know me..
Bitter: no way I love life, I just hate the people in it.
Idiot: Really, I have a Master in Engineering, I owned a bussiness for 14 years sold it and now i am a goverment hack so be it, Your right I am an Idiot.
Loser: With my bank account looking comfortable for the coming recession and I owe no debt..who is the real loser here hmm??
Bitter: Fucking right I hate what we have turned into its asswholes like you anonopuss that put us here so yes i am bitter.
liberal Dem: Another moronic statement I am an Independent, and would not vote DEM or Repub If my life depended on it.
That being said Bite me.
He wants to marry Skytrekker:
I already have enough dependents but thanks for the proposal.
Back on topic here enough with the bullshit, I will not fuel the fire. this from the boston globe this morning.
State home, condo sales slip in key quarter
http://tinyurl.com/kul6m
If every 2 BR 1 BA house in a given area, say 32804, is $269,ooo.oo and then a new 2 BR 1 BA listing comes on the market
in the same area for say, $210,000.oo
advertised with an 8 percent commission or better, it will sell first, as the RE agents will show it. It will have built in equity or a cush to withstand a hard landing.
"I bet you wives were the cause of stupid decision their husbands made, just to live in a McMansion, overinflated house."
Genius - pure genius - '
Anon- you a little bitter my friend.
Any other gems U can share with us?
Are you in group or individual therapy?
Some loan offices give away 'free' domestic flights if you get a loan through them.
Incentives always raise suspicion for me. I'd rather get a lower price. If incentives sell someone a product or idea, then I'm happy to offer that.
"$30,000 off of a nice new home..again keep it the new shit being built today could not with stand a cat2 Hurricane here in the North East, Cheaply built, Cheap Use of materials..."
Borkafatty-you are right again.
The houses (built in 2004, 5,000 sq. ft. and $700,000.00) next to our farm are so cheap that the siding comes off in the wind storms and we find it in our fields. We usually throw it away. Now the houses have spots of siding that don't match.
Tooo Baddd and TEE HEE
Bad Farm Girl
"$30,000 off of a nice new home..again keep it the new shit being built today could not with stand a cat2 Hurricane here in the North East, Cheaply built, Cheap Use of materials..."
Borkafatty-you are right again.
The houses (built in 2004, 5,000 sq. ft. and $700,000.00) next to our farm are so cheap that the siding comes off in the wind storms and we find it in our fields. We usually throw it away. Now the houses have spots of siding that don't match.
Tooo Baddd and TEE HEE
Bad Farm Girl
How long before we start to see incentive financing like “0% financing for one whole year!”
Do you know what NAR means in German?
Narr (extra r) is German for "fool".
Borkafatty:
How come those houses were not as tough and durable as their Hummers?
Richard:
You're wrong my friend. I'm not in that predicament, but I know of some who are. We live in a modest 4 bedroom single story house built in the 80's, and we bought for 150k in 1994. I'm not one of them. Thank God! Hahahaaaa!
How long before we start to see incentive financing like “0% financing for one whole year!”
I'm not sure whether it's 1, 3, 6, or 12 month financing, but Phoenix is seeing an ad or two for 1.9% financing deals.
How come those houses were not as tough and durable as their Hummers?
Funny you say that, Hummer just had a recall I thought for major front suspension failure, I could be wrong i just remember hearing that.
We were talking at work here today and you know what, Labor Day is just around the corner, you all know what that means right?
Pink slips (layoffs). Sad but true.
http://tinyurl.com/kbbaf
Yeah, it will be interesting to see when the pink slips come.
Builders are trying to rush projects up and finish before the fall downturn becomes into winter.
I saw some construction workers in Kroger working on Saturday talking about how they didn't know what they would do after October. One just said he would collect unemployment benefits for few months...........
The great flood is coming!!!
Follow the same line that home furnishings companies followed in the 80's and expanded ever since - "free" financing (smoke and mirrors). Went from 90 Days Same as Cash (sound familiar to any of you a little long in the tooth?) to 6 months free to one year to 24 months to now you can get 3 years to payoff a kitchen table - sad. Sad that people fall for such bullshit and sad that they need three years to pay off a friggin table in the first place.
what is even worse, is when the interest starts to kick in, the so called back door to a good screwing...
ACCRUED INTEREST!
Buy that great new Plasma 0% for 24 months, "Come on down"
And in little little fine print (kind of like you need the hubble telescope to read) Ok not that small but..somewhere on the application agreement "Interest will ACCRUE! from the date of purchase.
One does not have to be an Einstein to know what that means..
Or do you?
I run into a lot of Numb people everyday. I sit there sometimes just listing to the conversations, and say to myself..
Self: no wonder Paxil! is the breakfast of champions.
Anyone here at the Phoenix Real Estate Club's meeting on Tuesday night?
Someone brought up the question of whether it is remotely possible that 'market prices' "might possibly slide" by 10 - 20% and almost everyone climbed all over themselves to frantically explain why that couldn't happen in this market.
Apparently Phoenix is "different."
:-)
Hell with the incentive's! Just lower the price.
Hey Keith,
You should sponsor an annual HP Convention.
Vegas, Orlando, golf anyone?
Worse than a recession?
Commentary: There may be some tough times ahead
http://tinyurl.com/zgosd
Friggin mess I tell ya, and it is getting worse, funny thing yesterday.
I was going to the gym last night, ahead of me was an older gentlemen and the younger greet person was at the desk checking Id's and said "how are you today sir"?
At which point the older gentlemen turned and said "lousy, but if you give me a million dollars Ill feel just fine".
I turned and said it could be worse, he said it could not get any worse if you seen my mortgage payments..NO BULL SHIT!
It took me by surprise actually, I hear more and more people saying how tight things are..what scares me the most? Is this is only the begining..we have 2 trillion more worth of loans to adjust in 07.
this was posted at Bens by a blogger to funny!!
http://tinyurl.com/pnfdn
Newton, MA 02467
MLS ID#: 70441409
$1,250,000
3 Bed, 2.5 Bath
2,014 Sq. Ft.
0.52 Acres
Oh and one more follow up OT:
A federal judge ruled Thursday that the government's warrantless wiretapping program is unconstitutional and ordered an immediate halt to it.
U.S. District Judge Anna Diggs Taylor in Detroit became the first judge to strike down the National Security Agency's program, which she says violates the rights to free speech and privacy.
BITE! ME! Right wing conservitve GOP losers hahahahah! NO! one man can be KING! when you have a consitution of peoples rights.
It would seem the losers are the ones doing the most whining about "I wuz be robbed" back in 2000
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