Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Percentages verse Dollar Amounts- Are they Equal?

Percentages verse Dollar Amounts- Are they Equal?

I sell a lot of new homes.  Each builder offers different "incentives" to build with them.  Even the same builder, in different communities, offers different incentives.  How the builder words their incentives can make or break a deal.

I'm currently working with some buyers to build a brand new home, from the ground up, not an inventory home.  When we originally met with this builder, the incentives were 30% off upgrades and the builder would pay 3% for closing costs.  That means, if you put $100k worth of upgrades into the house, you get $30k off the price, plus about $10k in closing costs.

I called today to schedule our appointment to write up the contract, and the builder's rep said the incentives have changed.  The new incentive is a flat $35k with no closing cost help.  So, back to the $100k example, that means $35k off the price instead of $30k.  That's great, right?  Try translating that to a buyer who likes percentages and not flat dollar amounts... but in the above example, the new incentives are not a better situation.

Putting it into perspective, my buyers are actually putting in $76k in upgrades.  If you use a percentage for that, they would only be saving $22,800 at 30% off.  However, with the $35k off, they would be saving an additional $12,200.   Of that, $10k can still go towards closing costs, and there is an additional $2200 to be used for more of a discount on the upgrades.

So, even though they were upset with the change in the incentives, it was actually to their advantage and are very happy, especially since I got them even more than the $35k off.  We will be writing the contract tomorrow and hopefully closing by Thanksgiving.

Remember, I work all of North Dallas County and Collin County including Richardson, Plano, Allen, Frisco, Carrollton, Garland, Rowlett, McKinney, etc... my car will take us anywhere you need to go!! 


Comment balloon 0 commentsDonna Harris • June 12 2008 02:05PM