"Real Truth" on Incentives
Thought this would make an interesting topic for discussion:
I don't understand why no one has written an in-depth article about the "real truth" on incentives and how much more they cost the buyer.
Incentives only help the industry, but they hurt the buyer.
1. You'd be better off paying for upgrades, plasma tv's, even cars out of your own pocket on your own terms. You can get a plasma tv finance from most major electronics stores for 0%. why would you want that financed into your mortgage over 30 years?!?!
2. $20k worth of options really ends up costing you $43k over 30 years at 6%. You're better off having the home price reduced by $20k which will save you $23k over the next 30 years.
3. When it comes time to resell your home, you could have more of a profit if they just reduce the price. If you have an inflated home price, thats less profit for you when closing time comes. Live like the stock market, buy low-sell high. You can't short a house, so overpaying is only your fault.
4. The incentives only help the industry, not the buyer. They do that to keep prices "inflated" so other recent home buyers don't get upset and to keep median prices high so that other potential buyers do not see home prices falling. God forbid prices fall, more people might be able to afford them. Why does the industry keep insisting real-estate isn't cyclical, when it is?
5. You can get more for your money (in terms of upgrades) if you shop around. Chances are that $15k countertop is only costing the seller $8k. Now with many retailers and contractors feeling the chill, they'll be desperate to take on new jobs. They'll have to be competitive as well.
I would write one, but I have no motivation. These are the types of articles that should be written on the major media sources. I'm getting tired of the phrase 'yet another sign that the housing market is starting to cool'. You morons, the housing market started to cool at the beginning of the year. Get up to date already.
Last year it was all pep-rally's, the housing craze, etc. Nobody (except us) saw this coming. All of the insiders stood there like deer in the headlights. Times are different, everyone has a trust fund worth 1 million, there is no more land, baby boomers want 4 homes to live in, blah blah blah..
The realtors and developers had no control over their own industry. They milked every drop they could get out of it, and now they need to get creative to try to keep the party going.