Newest South Florida Buyer Incentives: Shopping Sprees, College Tuition

When Karen Nisius was considering buying a new two-bedroom condo in Kendall, one of the deciding factors was a $5,000 shopping spree offered by the developer, Fairfield Residential.

“I had been looking for about six months, and didn’t have an immediate need to buy. The developer offered to waive his fees and pay my closing costs,” she said.

Before Nisius moves into her $400,000 condo this month, she will take advantage of a $4,000 credit from Rooms to Go, whose Dadeland showroom is on the ground floor of Toscano, and another $1,000 credit from Best Buy.

“I’m moving from a three-bedroom house further south and downsizing, so some of my current furniture won’t work at my new condo. Getting all new furniture for free was a real incentive for me,” Nisius said.

Faced with a sharp drop-off in demand at a time when thousands of new units are coming on the market, South Florida real estate developers are offering a host of financial incentives to attract buyers like Nisius.

For example, Abel Homes was recently offering no down payment, no closing costs and no association fees for a year on the remaining townhomes at its Naranja Villas development in Southwest Miami-Dade.

“I think it’s essential for builders to offer incentives,” said Al Piazza, CEO of Coscan Homes in Fort Lauderdale. “Customers today are expecting them, and with the market still so slow, I think you’ll see even more out there.”

To promote a new family-oriented Orchid Grove community in Pompano Beach, Coscan is going so far as to offer new townhouse buyers a free four-year college education for one child or grandchild.

With Florida mortgage costs being so high for buyers, developers have to do whatever they can to move product in this market. Piazza said he got the idea from colleagues in New York who offered a similar incentive in the 1980s.

“We’ve garnered a lot of interest from both prospective buyers and [Florida mortgage brokers]. It’s generated a lot of talk and I’m sure it will be an important consideration for many buyers as we begin closing these sales,” he said.

In the past year, some individual sellers have offered new cars, airline tickets or vacations to market their homes. But buyers usually prefer a cash incentive, such as a discount in the sales price, a lower Florida mortgage loan rate, or the payment of closing costs.

“Not surprising, this would represent a bottom-line savings of several thousand dollars in normal closing costs and services,” said Michael Bearden, CEO of HouseHunt.com.

One of the more common incentives today in the new home market is waiving a provision in the sales contract that requires the buyer to pay a 1.5-1.75 percent fee to the developer.

Those assessed fees, which covered some of the developer’s closing costs and enhanced a project’s profitability, were widely imposed several years ago at the height of the recent Florida housing market boom.

Some real estate brokerages and developers offer discounts to buyers who use their affiliated mortgage and title insurance services. However, all buyers should also compare fees with independent companies to be sure they are getting the best deal.

Individual sellers are also offering incentives, such as paying a buyer’s closing costs or homeowners association fees. Again, it’s important for buyers to be sure the seller has not inflated the sales price in order to compensate for these “discounts.”

As always, regardless of any incentives, Realtors say the best way for a seller to market a home is to price it realistically.