A few weeks ago, I wrote a post about how developers offer incentives to sweeten the deal. What I forgot to mention is that these incentives aren’t always the fantastic deal they appear to be. Many times developers will increase the price of the homes before they market the incentives. If you, as a buyer, received incentives totaling $20,000, but you bought a property that just had a price increase of $10,000, how much of a deal is that?

There are a number of developers in downtown San Jose and throughout the Bay Area offering various incentives to entice buyers into purchasing one of their properties. The real estate market is slow and developers need to move inventory. One particular downtown San Jose development is offering buyers $50,000 which can be applied towards upgrades, future HOA fees, or to buy-down interest rates. $50,000?!?! Yes, you read that correctly, $50,000! What the sales team won’t tell you is that units in that complex have increased in price between $20,000 - $35,000. That great deal you just got doesn’t sound so great anymore now does it?

This is one of the important factors to consider when you buy a new construction home. No, you don’t need to be represented by an agent but why wouldn’t you want to be, especially if it doesn’t cost you anything. Its an extra pair of eyes looking out for you. And if you do use an agent to buy new construction, be sure they understand how new construction sales operate.