Kevin McCormally: I am Kevin McCormally of Kiplinger's. I am here with Pat Esswein, the Housing Editor of Kiplinger's Personal Finance magazine to talk about buying a new home.
Pat, we know from the statistics that home builders around the country are suffering a severe downturn, maybe even a recession. Is this a great time to buy a brand new home?
Pat Esswein: It can be but you really have to be committed to living in that house for at least five years so that you can wither any further downturn in home prices.
Kevin McCormally: Can I expect a great price cut on a brand new home?
Pat Esswein: It really depends where you are buying. If you're buying in the Central Valley of California where there has been a severe downturn and builders are really stuck with a lot of inventory, you may get a great deal. If you're buying in Raleigh where the downturn is slight, you might not get as great of a deal.
Kevin McCormally: Where do you get the best deals?
Pat Esswein: You will find the best advertised deals on what the builders called Quick Move-In Homes. Those are houses that they have already built, maybe they have had a cancellation for the sale of them. They are carrying those homes on their books and they really are anxious to get rid of them.
Kevin McCormally: Okay, I have heard a lot about incentives. What kind of incentives are home builders offering to bring people into the doors?
Pat Esswein: Typically they offer upgrades to the home. Those might include better quality cabinetry or carpeting, perhaps additional landscaping. Sometimes they offer what I would call goodies, things like a plasma TV or free vacation or the like.
Kevin McCormally: Do these incentives go to everybody?
Pat Esswein: No, typically you have to agree to work with the builder's lender and take their financing in order to get the incentive.
Kevin McCormally: Is that a good deal?
Pat Esswein: It can be a very good one but the only way you will know that is if you shop the deal. So look at other financing options.
Kevin McCormally: Okay, do I as a home buyer need an agent when I go to a builder?
Pat Esswein: Definitely, when you walk into a builder's sales office, the people, the very friendly people working in there are the builder's sales agents. So you need to hire your own buyer's agent who represent your interests.
Kevin McCormally: Okay. Thank you Pat.
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