How Hidden Incentives Distort Home Prices (WSJ)

[RatherOpinionated]

From today’s WSJ

PARKER, Colo. — As the housing market slump deepens, disguised discounts are making it harder to tell exactly how much people are paying for homes.

Buyers, sellers and other market participants typically monitor fluctuating home values through sale records that legally have to be listed with county clerks. But incentives offered to buyers — ranging from free cars or furniture to cash rebates — are making those prices less reliable as a sign of what buyers actually paid, netting out the giveaways. And that may be misleading lenders and people shopping for homes, some real-estate lawyers and appraisers warn….

http://online.wsj.com/article_email/SB119803038237438417-lMyQjAxMDE3OTE4OTAxMzkwWj.html

[Bugs]

Misleading other market participants, including the lenders who are financing the mortgage, is what undisclosed concessions are all about.

[Bugs]

Misleading other market participants, including the lenders who are financing the mortgage, is what undisclosed concessions are all about.

[Bugs]

Misleading other market participants, including the lenders who are financing the mortgage, is what undisclosed concessions are all about.

[Bugs]

Misleading other market participants, including the lenders who are financing the mortgage, is what undisclosed concessions are all about.

[Bugs]

Misleading other market participants, including the lenders who are financing the mortgage, is what undisclosed concessions are all about.

[oxfordrick]

Hovnanian emailed me offering a 10% Selling broker commission…..this means that they think it’s smarter to pay a broker 10% than to reduce the price 10%.

This is one of several factors that make statistical price reductions understate reality

[oxfordrick]

Hovnanian emailed me offering a 10% Selling broker commission…..this means that they think it’s smarter to pay a broker 10% than to reduce the price 10%.

This is one of several factors that make statistical price reductions understate reality

[oxfordrick]

Hovnanian emailed me offering a 10% Selling broker commission…..this means that they think it’s smarter to pay a broker 10% than to reduce the price 10%.

This is one of several factors that make statistical price reductions understate reality

[oxfordrick]

Hovnanian emailed me offering a 10% Selling broker commission…..this means that they think it’s smarter to pay a broker 10% than to reduce the price 10%.

This is one of several factors that make statistical price reductions understate reality

[oxfordrick]

Hovnanian emailed me offering a 10% Selling broker commission…..this means that they think it’s smarter to pay a broker 10% than to reduce the price 10%.

This is one of several factors that make statistical price reductions understate reality

[SD Realtor]

I get queried all the time from prospective buyers about these issues. Pricing for new homes is a very sensitive issue for builders. This is why it is quite difficult for a buyer to walk into the sales office and demand a 10% or x% reduction in price when he is not represented (in order to compensate for said builders offer to pay a coop commission or referral fee to the non exist realtor) The builder will not do it. Simply speaking, they cannot without jeopardizing all future pricing for homes with the same flooplan in the same phase. It is much more beneficial to offer concessions, commissions, etc. As long as the purchase price on that HUD is what it needs to be, that is all that counts. That is the last domino that gets pushed over if you are the builder.

If you are a buyer you have a much better chance getting a realtor to go in and then get the rebate from the realtor then you do getting the builder to cut the cost of the home.

I got the same email oxfordrick.

SD Realtor

[SD Realtor]

I get queried all the time from prospective buyers about these issues. Pricing for new homes is a very sensitive issue for builders. This is why it is quite difficult for a buyer to walk into the sales office and demand a 10% or x% reduction in price when he is not represented (in order to compensate for said builders offer to pay a coop commission or referral fee to the non exist realtor) The builder will not do it. Simply speaking, they cannot without jeopardizing all future pricing for homes with the same flooplan in the same phase. It is much more beneficial to offer concessions, commissions, etc. As long as the purchase price on that HUD is what it needs to be, that is all that counts. That is the last domino that gets pushed over if you are the builder.

If you are a buyer you have a much better chance getting a realtor to go in and then get the rebate from the realtor then you do getting the builder to cut the cost of the home.

I got the same email oxfordrick.

SD Realtor

[SD Realtor]

I get queried all the time from prospective buyers about these issues. Pricing for new homes is a very sensitive issue for builders. This is why it is quite difficult for a buyer to walk into the sales office and demand a 10% or x% reduction in price when he is not represented (in order to compensate for said builders offer to pay a coop commission or referral fee to the non exist realtor) The builder will not do it. Simply speaking, they cannot without jeopardizing all future pricing for homes with the same flooplan in the same phase. It is much more beneficial to offer concessions, commissions, etc. As long as the purchase price on that HUD is what it needs to be, that is all that counts. That is the last domino that gets pushed over if you are the builder.

If you are a buyer you have a much better chance getting a realtor to go in and then get the rebate from the realtor then you do getting the builder to cut the cost of the home.

I got the same email oxfordrick.

SD Realtor

[SD Realtor]

I get queried all the time from prospective buyers about these issues. Pricing for new homes is a very sensitive issue for builders. This is why it is quite difficult for a buyer to walk into the sales office and demand a 10% or x% reduction in price when he is not represented (in order to compensate for said builders offer to pay a coop commission or referral fee to the non exist realtor) The builder will not do it. Simply speaking, they cannot without jeopardizing all future pricing for homes with the same flooplan in the same phase. It is much more beneficial to offer concessions, commissions, etc. As long as the purchase price on that HUD is what it needs to be, that is all that counts. That is the last domino that gets pushed over if you are the builder.

If you are a buyer you have a much better chance getting a realtor to go in and then get the rebate from the realtor then you do getting the builder to cut the cost of the home.

I got the same email oxfordrick.

SD Realtor

[Author]

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