The Mother Of All Incentives !

Last week, it was Corey Barton Homes new “Live Free” program, offering to pay the first six months of mortgage payments to draw buyers to their subdivisions.

This week, it’s Hubble Homes offering buyer agents a $10,000 bonus commission, in addition to a 3% selling commission, to entice them to bring their buyers to Hubble’s Charter Pointe subdivision.

According to Intermountain MLS data, there are 67 homes for sale in Charter Pointe, of which 55 are new/never occupied homes and 12 are resale listings.

The average asking price for the 55 new homes in MLS is $228,071.

Despite Hubble Homes’ practices of not selling to flippers/speculators, I wouldn’t be surprised if some of the 12 resale listings are investor-owned; thereby creating additional competition for the builder.

A buyer’s agent who sells that average home will be paid a 3% selling commission of $6,842, plus the $10,000 bonus commission, totaling $16,842 in commission for bringing in the buyer.

That works out to a 7.38% commission to the selling agent; not including any commission paid to the listing agent.

Obviously, Hubble Homes is motivated to clear out some standing inventory.

I can only imagine how exciting life becomes for a builder with $12.5 MILLION of unsold inventory in just one of their many subdivisions.

Sure hope those buyer agents realize the need to disclose their compensation to their buyers up front.

I sure wouldn’t want to face a buyer who learned, after the fact, that I was being paid $16,000+ dollars for steering them toward buying a $228k home.

Wouldn’t it be simpler to offer that extra $10,000 directly to the buyer in the form of a lower price, seller-paid closing costs, or upgrades?

(see my 9/21/06 posting “Builders Offering Inventive Incentives” for more info on this topic).

Boise Real Estate Is On Sale !

Smart buyers wait for a sale to buy what they want at a lower price.

Many real estate buyers jump into the market when they feel good about it and try to get out when sentiment turns negative.  The shrinks call that “herd psychology” ~ when people do what everyone else is doing.

Acting sheepishly, however, may not be in your best interests.

Have you ever noticed that the really smart investors buy when everyone is selling and sell when everyone is buying.

It’s a good idea to ask yourself a couple of questions if you are considering investing in Boise real estate at the present time, including:

  • What are the underlying economic factors for Boise real estate?

They are extremely strong. 

We are not in a national recession, our unemployment rate is a little over 3% vs. the national rate of 4.7%, we are creating new jobs, people are still moving here, and this is a terrific place to live ~ so good, in fact, that Money magazine says the Boise area is the 8th Best Place To Live in the entire U.S.

  • Will the Boise real estate market remain soft forever?

Obviously, there are no guarantees of future appreciation because no one can predict the future.

However, given the desirability of our area, our quality of life, and our comparatively lower cost of living vs. other areas, it seems likely that our real estate market will recover.

And, it may recover rather quickly after we blow off some of the froth in our market.

Our market simply grew too fast during 2004-2005, and we also experienced a tremendous influx of speculators in the lower end of our market, thereby driving Boise real estate prices to unsustainable levels.

We are now in a period of adjustment that will ultimately result in more affordable homes in the Boise real estate market.

So, the choice is yours ~ do you pick up a bargain when Boise real estate is “on sale”, or do you wait until everyone else has jumped back into the pool?

Let’s run some hypothetical numbers and consider the trade-offs of buying now vs. waiting for the Boise real estate market to strengthen.

 

As an example, lets consider a $200,000 home similar to one I now have listed in West Boise.

 

But, let’s forget about the 20-25% appreciation we enjoyed over the past couple of years.

Instead, let’s use what might be a worst-case scenario of (gasp!) only 3% annual appreciation, and let’s say you keep the home for 5 years.

In this scenario, that home would be worth $231,854 at the end of five years.

Using only a 2% annual appreciation rate, the home would still be worth $220,816.

So, you see ~ everything is not all doom and gloom.

For many buyers, this is a buying opportunity ~ a chance to snag a good deal while Boise real estate is “on sale”.

I wonder how many “I could have bought  .  .  .  . ” stories this market is going to generate in the next five years?

Builders Offering Inventive Incentives

You don’t have to look far to find a deal if you are a buyer interested in a new home.

Buyer incentives abound, and some are becoming pretty creative ~ like Corey Barton Homes’ “Live Free” program that offers to pay your mortgage payment for the first six months.  The remaining 29.5 years of payments are the buyers’, however.

(Gee, I wonder if that incentive is built into the price ???)

I am also receiving e-mails and flyers from listing agents offering to pay me bonus commissions (up to 6%) if I will steer my buyers toward their listings, and it has now become commonplace for builders to offer incentives to buyers for seller-paid closing costs, $5,000 to be used for upgrades/furniture, and other inventive marketing ploys.

It is indeed a good time to be a home buyer in the Boise area!

Why Californians Move Here

(the following is a tongue-in-cheek posting based upon an actual newspaper article published in California earlier this year)

The Republic of California will soon begin enforcing new air quality regulations to control “bovine flatulence”.

The CFBC (California Bovine Flatulence Commission) intends to crack down on San Joaquin Valley dairy farmers whose cows are emitting gaseous emissions which are contributing to air pollution (and no doubt, global warming too!).

Now here’s some news you need to know: The CBFC recently released findings that indicate the average cow passes 19.3 pounds of gas per year.

What’s next, guys ~ cow diapers?

Sure is nice to live where there’s less government 

Idaho Jobless Rate Drops To 3.3%

If you live in Idaho and you aren’t working, it’s because you don’t want to!

Idaho’s jobless rate dropped to a scant 3.3% in August.

Idaho Commerce and Labor Director Roger Madsen called the August report “one of the best I have seen in 30 years in Idaho”.

The August results come on the heels of 3.2% in March, followed by 3.6% in July.

A significant number of new teaching jobs have been created in Idaho recently, largely due to the strength of the Boise real estate market, combined with in-migration of new residents from other states.

The national unemployment rate currently stands at 4.7%, so we’re looking pretty good!