Builder incentives can range from almost anything. A builder incentive could be a side entry garage, a brick front, a premium sized lot, upgraded appliances, a finished basement, an upgraded front, discounted closing costs, and much more. Always check to make sure that you are getting the best deal when a builder starts offering incentives. If they are offering incentives, there is usually a good reason. You all know the old saying, "you don't get something for nothing" and this definitely applys here. Trust me 99 times out of 100 they will make that money up somewhere else.

Builder incentives are also offered to increase the number of pre-completion sales in an area that has seen a slow down in sales in the new construction market. A slow down does not necessarily mean that the homes will not sell but are just taking longer to sell.

Builders may offer you a certain dollar amount in upgrades to your home. For example, they may offer you a deck or hardwood flooring in your kitchen worth $6,000. It's important to know that this is not the actual cost for them to give you the addition. It costs them much less. The $6,000 is what they would charge if they were making a healthy profit off of the upgtrade.

Builder incentives can even be given towards the financing aspect of your loan and/or given towards reduced title costs. An example may be a .25% off of your interest rate if you enter into a purchase agreement during the month of May. Again, you will need to use the builder's finance company and title company in order to receive these discounts.

Usually these incentives are paid for through your interest rate which in fact makes none of it free. When shopping for a builder it is almost best to find one that works on a cost plus ratio. This way you know exactly what your builder is making through the whole process. Usually between 10%-15%.