From the Record:
Developer Pulte Homes is hoping to eliminate the home-selling obstacle facing buyers of its active adult village under construction in Wanaque.
After watching its 55-and-older buyers struggle to sell their homes in today’s slumping housing market, the builder joined the incentive package fray in November with a multi-phase program to help sell their homes.
“They can’t buy a home from us until they sell their existing home, so it’s a win for us and a win for them,” said Robert Teeling, sales manager for Wanaque Reserve by Del Webb. “We’ve definitely felt the effects of the market.”
For customers who have signed a contract to buy a unit, Pulte will pay for a home-staging company that suggests ways to prepare their homes for a quick sale. That might include new carpeting, painting or nothing more than removing clutter, said Teeling.
“Our buyers need to make that mental transition from home to commodity … and that’s hard,” he said.
If none of that works, then contracted buyers are offered “creative” mortgage deals.
The payment-free living program will pay up to six months of interest on a bridge loan and the $363 monthly fee covering maintenance, the staffed guardhouse, sewer and water fees and the activities director. It requires a 10 percent down payment and is the most popular of the two programs, said Teeling.
The second program requires a 25 percent down payment, but for that Pulte will pick up mortgage and interest payments for up to a year. Buyers can pay cash for either program, but a mortgage must be obtained through Pulte’s mortgage company, which offers competitive rates, said Teeling.
Builders across the state have been using a variety of incentives for about a year now to move unsold homes, said Patrick O’Keefe, CEO of the New Jersey Home Builders Association.
“The incentive is there because there are units in the pipeline that the builder wants to make a deal and move off the books,” said O’Keefe.
He advised prospective buyers to make sure they can afford long-term payments while their homes are taking longer to sell.
“If I were a buyer, I would still go back to basics: Can I afford the house? Am I getting a mortgage that will make sense for time I’m occupying the house?” said O’Keefe.
The state’s largest developer, K. Hovnanian in Red Bank, prefers enticing potential buyers with free popular upgrades, such as a $6,000 granite kitchen counters in a newer Montvale development.
“We’ve always done incentives and premiums,” said Hovnanian spokesman Doug Fenichel. “It’s just maybe these incentives are a little more pronounced now.” Mortgage incentive plans are also offered.
But in response to the market, Hovnanian has held back finishing buildings. It has also backed off buying land in West Milford, Mount Olive and Hackettstown where it would take too long to get a return on high land prices and costly permits, said Fenichel.