Innovative New Programs to Sell Homes

Real Estate Agent with The Mills Team
Rockrose Development Corporation has begun offering an interesting incentive to potential buyers. They will buy the property back. Anybody who purchases one of their hundreds of condominiums in New York, can, if values continue to fall, sell the apartment back after five years for 110% of what they paid. Home builders have been forced to come up with innovative ideas to urge people to buy as inventories of unsold homes are at their highest since the early 60s and sales are at their lowest levels in decades.

In addition to money-back clauses, some sellers are offering credits for renovation projects, mortgage protection for buyers who become unemployed and cash incentives for lenders to control interest rates. Although interest rates are near record lows and housing affordability is higher than ever, many potential homebuyers are still hesitant to act with unemployment at its highest since ‘83 and property values expected to drop another 20% by the end of 2010. Rockrose is not the only company with outrageous ideas to draw in buyers. In Estero, Florida, Toll Bros. is offering a $100k incentive to buyers of its homes in Belle Lago Villas. The incentive can be used for customizing options like upgrading kitchens, bathrooms, or flooring, etc. or can be applied to closing costs, reducing principle, or buying down interest rates.

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A Toll Bros. official says the incentive has brought increased interest. The nation’s housing market is experiencing its worst crisis since the Great Depression and the effects have spread throughout the economy as well as the rest of the world. A springtime pickup in the market could help spur a recovery for the world’s largest economy. As part of a broader economic stimulus plan, the government is offering an $8,000 tax credit to first-time buyers who purchase a home before November 30. Many Americans, however, are still hesitant to buy fearing the loss of their job. To help alleviate those fears, Toll Bros. has launch a “Mortgage Protection Plan”, under which the company will pay the mortgage of buyers who lose their jobs. According to the Commerce Dept., sales of new homes rose 4.6% in February after setting a record low level in January. Sales have fallen over 41% from last year and are almost 76% below their peak in July 2005. Reducing interest rates in another method being used to bring buyers into the market. Lennar Corp., for example, is offering to qualified buyers a 30 year fixed rate mortgage with a 3.625%, even as rates average between 4.7% and 4.8%. The rate does come with several stipulations.

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