Editor’s note: This is part two of a two-part story on builder incentives. Part one focused on a builder’s point of view when it came to incentives.
As another low-and-slow year for housing comes to a close, and with mortgage rates weighing on affordability, there can be real value out there for buyers interested in newly built homes. Ones constructed this year are often akin to 2026 model cars. Builders want those properties sold, and dealers want those autos off the lot before 2027, lest the new shine of both dulls.
Car dealers will simply lower the price a bit, but it’s more complicated with what builders will offer. There are all kinds of incentive possibilities, and you as the expert agent need to be able to guide your clients in terms of which to consider, or request, and which to reject.
“Many builders are sitting on inventory, and most need to move homes so they can navigate their way into their next round of construction,” says Lisa Harris, of REMAX Center in Northeast Atlanta. “Their loss can mean instant equity gains with the right strategy. Smart shoppers don’t just buy in this market, they win if they’re aligned with the right buyer’s agent and a strategy for working with new homebuilders.”
Harris notes that she has seen everything across the board, from builders offering $11K golf carts, interest rate buy-downs, price reductions, builder upgrades, free appliances, window treatments and many even offering $5,000 buyer’s agent bonus incentives.
“Even when a builder isn’t advertising incentives, I always ask and negotiate as much as possible,” she says. “The goal is to get the best opportunity for my clients based upon their individual needs and financial situation. The builders know the recipe: Sweeten deal, and buyers are more likely to bite.”
Making a deal
The last few months of 2026 can spur builder incentives for reasons other than the obvious. Publicly traded homebuilders will be reporting fiscal results through the end of the year, adding pressure to sell homes just as a new Zonda builder survey found that 85% of builders said demand was slower than expected in September, even after accounting for normal seasonal trends.
Almost two-thirds of builders were offering incentives back in August, according to the National Association of Home Builders (NAHB).
For home shoppers, this creates an opportunity to buy a home on more favorable terms, such as lower interest rates through a mortgage rate buydown, or price cuts, which were twice as common in September as in May.
Quick move-in homes (QMIs), which are move-in ready or expected to be completed within 90 days, typically become more plentiful toward the end of the year. In many cases, builders are motivated to sell these homes quickly to avoid carrying costs and meet year-end goals.
“Mortgage rate buydowns and covering some closing costs are both helpful to buyers,” says Pam Rosser Thistle, with Berkshire Hathaway HomeServices Fox & Roach, Realtors® in Philadelphia, “and an approach that is often used because it’s a behind-the-scenes concession. For new homebuilders, the sold price is important because that is used to validate future sales prices, and there are usually many homes to sell.”
A “2-1” mortgage rate buydown reduces the rate used to calculate the buyer’s payment by two percentage points in the first year and one point in the second. In year three, the payment is based on the loan’s full rate. Buyers are advised to understand what happens when the temporary reduction ends.
For illustration, on a $320,000, 30-year loan with a 6.95% full rate, monthly principal and interest would be approximately $1,708 in year one, $1,908 in year two and $2,118 from year three onward under a 2-1 buydown. That is a rise of about $410 a month from the opening payment. Taxes, insurance and any other housing costs would be additional. Actual payments depend on the loan terms.
Josh Jarboe, principal broker/owner of REMAX Empire in Mount Washington, Kentucky, cautions that buyers must be detailed regarding how financial incentives offered will play out.
“I remind clients not to look only at the ‘discount’ a builder is offering, but what that figure can do for them,” he says. “A $10,000 incentive applied strategically toward financing can impact a buyer’s day-to-day finances much more than taking $10,000 off the sales price. For every $1,000 taken off a sale price, it’s roughly a $5 difference on a monthly payment.
“Ultimately, the best incentive isn’t necessarily the biggest one. It’s the one that solves the buyer’s biggest obstacle, and that’s often the monthly payment. The cost of living has increased dramatically over the past few years, and a majority of Americans are squeezed tighter than ever.”
The nitty gritty
Most real estate pros ultimately agree that incentives are a key factor in getting new homes sold. It’s a matter of identifying which one works best for each buyer.
“When the market starts to shift, builders will often offer incentives,” says Jeffrey Decatur, with REMAX Capital in upstate New York. “Fifteen thousand dollars in free kitchen upgrades, hardwood floors, weekends away, closing concessions, large-screen TVs, you name it. Incentives can surely catch the eye of a buyer and factor into the buying process the same as any other factor. It all comes down to value to the buyer and comparison. Many builders will offer upgrades or something related to the property rather than material things, because they are getting those things at cost and provide more value.
“I love when builders offer incentives because it shows their willingness to work with a buyer. It can complicate the buyer’s thought process, but at the end of the day, it is just another criteria to consider.”
Pricing trends are also more buyer-friendly toward the end of the year. The average sale-to-list ratio comes in lower in the fourth quarter, especially compared with the second quarter, according to Ali Wolf, chief economist at NewHomeSource and Zonda. “For example, in December 2025, the average new home sale price was 4.8% below its list price, while in June new homes sold for 2.8% below their list price. On a $400,000 home, that makes for an $8,000 difference.
“Late in the year, the list price is more of a starting point than a final answer. A couple of percentage points looks small on paper but adds up to real money. When builders are focused on hitting their year-end goals, buyers who come prepared can approach the sale from a stronger position.”
Daniel Kramp, a broker at Christie’s International Real Estate New York, is in the unique position of being able to speak from two angles as someone who worked on a development directly and who also reps high-end buyers for new construction.
“In New York City, there’s a very wide range of concessions to no concessions at all when it comes to new development,” he says. “Some developers in projects that are very well received offer no concessions. The products move on their own merit, so there’s no need to incentivize.
“On the other hand, for the past couple of years, many developers have been happy to cover the transfer tax and mansion tax as a standard concession to buyers. That’s become fairly routine in projects that need a bit of a push.”
Kramp shares that on some projects like the one he worked on that were more challenging, they got creative. Concessions ranged from offering two years of common charges as a credit to the buyer at closing, to covering memberships at nearby clubs in the Financial District to entice buyers to make an offer.
“The takeaway is that the concession landscape in NYC new construction is really project-by-project,” he says. “It depends entirely on how well the building is absorbing, the developer’s urgency and how much flexibility they have in the bottom line. The well-positioned buildings don’t need to give anything, while the ones that are struggling are getting increasingly inventive.”
Here are questions agents suggest buyers should ask before accepting a builder’s incentive offer:
- When does the payment change? Buyers should ask for a written schedule showing the principal-and-interest payment in each year of the buydown and after it ends.
- What is the full monthly housing cost? Add estimated property taxes, homeowners insurance, mortgage insurance if applicable and any HOA dues. A manageable mortgage payment alone does not settle the question.
- Who is paying for the buydown? Find out how much the subsidy costs and whether it affects the builder’s other offers.
- Would another incentive serve a buyer better? They should request figures for a price reduction or closing-cost help on the same home. Compare the cash needed upfront, the later monthly payment and the total cost over the time they expect to own it.
- Could a buyer afford the full payment without refinancing? Rates may move in either direction, and refinancing involves its own costs and qualification requirements.
“The best advice for buyers is to stay engaged,” sums up Wolf. “The housing market doesn’t close for the holidays, and patience this time of year is often rewarded.”
