Deals, Discounts and Incentives – Part 2

When dealing with new home sales, there is a vast difference between a discount and an incentive. Remember an incentive is a closing tool, not your opening statement. What is a discount? A discount is really an admission of guilt. An incentive on the other hand is value added. Incentives are time sensitive.

When you offer an incentive, you are basically saying that if you do this for me, i.e. close on your new home in the next 30 days, I will give you free hardwood, or other items that your new home owners desire. A discount, on the other hand, is an apology. You are saying, Mr. home buyer, I’m sorry we made this so expensive, we’re going to discount it for you. This harms the value of the home. Where as an incentive adds value to the home.

You have to be careful that you are presenting incentives, not necessarily giving discounts. Remember, discounts affect the value, incentives are value added and don’t mess with the comparables.

 

 

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