New Homes May Be a Good Deal

With home prices sagging and builders often eager to reduce inventory, a newly built home might offer more for the buck than an existing home.

Some builders are offering buyers free finished basements -- a $30,000 to $35,000 value -- on some upper-end homes. Builders are also offering to pay closing costs and giving financing incentives, such as interest rate buy-downs, which can equal 4% to 6% of a home's purchase price. And those purchase prices are discounted up to 7% to 8%, say some builders.

"Builders are offering incentives to buyers that existing homes can't," says Stephen Holben of Holben Building in Denver. "If [buyers] deal directly with the builder, they can get the built-in broker sales commission deducted, or have it used to buy down their mortgage rate, or both." ...