If you've been thinking about buying a brand-new home in Arizona, the end of the year could bring some interesting opportunities.
Why? Because builders have goals, too!
As the year winds down, homebuilders are looking to close out their books strong. That can mean some pretty attractive incentives for buyers, including mortgage rate buydowns, closing cost assistance, and upgrade credits. But here's the thing: The deal a builder advertises isn't always the whole story.
In this Real Estate Tip Tuesday episode, Katie Halle Lambert, Associate Broker with Team EvoAZ at eXp Realty, welcomes Sonya Maynes, REALTOR® and new build specialist with Team EvoAZ, to talk about the Arizona new build deals they're seeing, where the biggest opportunities tend to show up, and why it's so important to look beyond the advertised incentive.
Let's dive in!
Why Are Builders Offering Incentives Toward the End of the Year?
As Sonya explains, builders want to finish the year strong, and that can create opportunities for homebuyers.
One way builders attract buyers is by working with their lenders to offer special mortgage rates on certain homes.
Builders may arrange financing incentives across multiple properties and attach those offers to specific homes they want to sell more quickly. That often means their spec homes or quick move-in properties, which are homes that have already been built or are nearing completion. And some of the incentives Katie and Sonya discussed are pretty interesting!
Temporary and Permanent Mortgage Rate Buydowns
Mortgage rate incentives are one of the biggest opportunities Sonya has been seeing in new construction.
During the episode, she shared examples of both temporary and permanent rate buydowns being offered by builders.
Temporary Rate Buydowns
Sonya mentioned seeing temporary rate buydowns advertised with introductory rates as low as 2.99%.
One example she discussed was a 2-1 buydown, which temporarily reduces the buyer's mortgage payment during the first two years of the loan.
Here's how that example works:
First Year: The effective interest rate is 2.99%.
Second Year: The effective interest rate increases to 3.99%.
Third Year and Beyond: The temporary buydown ends, and payments are based on the full fixed interest rate of 4.99% for the remainder of the loan.
The important thing to understand is that the lower introductory rate doesn't last for the entire loan. With a 2-1 buydown, the buyer receives temporary payment assistance during the first two years before transitioning to payments based on the full interest rate.
Note: These rates are examples from the prerecorded episode and are not verified current offers. Actual rates, loan terms, and eligibility requirements vary.
Permanent Rate Buydowns
Builders may also offer permanent rate buydowns.
Unlike a temporary buydown, a permanent buydown reduces the fixed interest rate for the life of the loan, unless the loan is refinanced or paid off. Sonya shared that she had seen permanent rate offers as low as 4.25% at the time of the recording. She also mentioned that she personally prefers permanent buydowns because buyers can benefit from the lower rate over a longer period rather than just the first year or two. Of course, which option makes the most sense depends on the buyer's goals and financing situation.
Note: These interest rates are examples from the prerecorded episode, not verified current offers. Actual rates, loan terms, and eligibility requirements vary.
Builders Are Also Offering Closing Cost Assistance and Upgrade Credits
Mortgage rates aren't the only incentives being discussed. Sonya shared that some builders were offering to cover buyers' closing costs.
She also mentioned seeing offers of $10,000 to $20,000 in upgrades, depending on the builder and available promotion.
For buyers already navigating home prices and interest rates, those incentives could make a meaningful difference. And here's another interesting opportunity Sonya brought up. Some builders were also offering permanent rate incentives and closing cost assistance on homes that buyers choose to build from scratch.
According to Sonya, that's something she hadn't seen offered as frequently in quite some time. So while completed homes tend to receive the most attention when it comes to builder incentives, buyers interested in building a home may have opportunities worth exploring, too.
Why You Should Bring Your REALTOR® Before Your First Builder Visit
This was one of the biggest pieces of advice Sonya shared during the conversation.
Talk to your REALTOR® before visiting a new build community for the first time.
Many builders have specific registration policies for buyers who want representation. Sonya explained that some builders require a buyer's REALTOR® to be present during the first visit. She also shared that certain builders may keep a buyer's registration information for months, which can make it difficult to add an agent later if the buyer originally visited without one. These policies can vary by builder, so it's important to understand the requirements before walking into the sales office.
The Builder's Sales Agent Represents the Builder
Another point Sonya emphasized is that the sales representatives working at new construction communities represent the builder. Their role is different from having a REALTOR® representing you as the buyer. And as Katie and Sonya discussed, purchasing new construction can come with a long list of questions. There are builder contracts to review, deposits to understand, incentives to compare, and details that might not be obvious at first glance.
Sonya explained that she often finds there are even more questions involved in a new construction purchase than in a resale transaction. Having someone familiar with the process who can advocate for you can be especially valuable.
The Advertised Builder Deal Isn't Always What Ends Up in the Contract
Here's where things can get tricky.
A builder might advertise a great mortgage rate, closing cost assistance, a price reduction, a finished backyard, or blinds throughout the home.
But what happens when you start reviewing the actual purchase contract?
Katie and Sonya have both experienced situations where an advertised incentive didn't match exactly what was being offered to the buyer. That's why reviewing the details matters.
Sonya explained that, in many of the transactions she's handled, receiving certain builder incentives has required using the builder's preferred lender. The lender can prepare different financing scenarios so the buyer and their real estate team can compare the numbers line by line. The goal is to determine which option actually works best for that buyer and their plans for the home.
Not All Builder Credits Can Be Used the Same Way
Another important detail is that builders may have restrictions on how their incentives can be applied.
For example, a buyer may want to use less of an available credit toward upgrades and more toward closing costs. But depending on the builder's policies, that may not be allowed.
Katie and Sonya emphasized the importance of understanding those restrictions before making a decision. They also discussed how builder contracts can be lengthy and contain language that isn't always easy for buyers to interpret. That's why Sonya takes time to review the terms with her clients and make sure the incentives being offered are actually reflected in the transaction documents.
As Katie pointed out, there have been situations where Sonya has had to advocate for clients when what the builder ultimately offered didn't match what initially attracted the buyer. And that kind of representation can be especially helpful for buyers who might otherwise feel uncomfortable questioning the builder.
Don't Forget About Property Taxes on New Construction
One detail Sonya specifically highlighted was property taxes.
When you're buying a newly constructed home, the current tax information may be based on the land before the completed home is fully reflected in the property's assessment. That means the tax figures initially shown to a buyer might not accurately represent future property taxes.
Sonya explained that she pays close attention to how those estimates are calculated. She wants to know what the lender is using to estimate the taxes and whether the figures provide a reasonable picture of what the buyer could expect.
Why does that matter?
Because buyers can sometimes experience changes in their monthly mortgage payments after purchasing new construction when their property taxes and escrow amounts are updated. Sonya's goal is to help buyers understand that possibility before they purchase rather than being surprised by it later. It's one of several details she reviews with her new construction clients.
Are the Best Year-End Deals on Quick Move-In Homes or Homes Built From Scratch?
Toward the end of the episode, Katie asked Sonya where buyers are seeing the strongest incentives. Are the biggest opportunities on completed spec homes, or are builders also willing to negotiate on homes that haven't been built yet?
Sonya's answer was that quick move-in homes generally have the strongest incentives among the opportunities she's been seeing.
Builders want to move those homes off their books and finish the year strong, so completed inventory can be an important place to look. She also emphasized that buyers may have room to negotiate. Depending on the builder and the property, there may be opportunities to discuss incentives, request modifications, or negotiate additional concessions. And while quick move-in homes tend to lead the way, Sonya confirmed that builders have also been offering incentives on homes being built from scratch.
The takeaway?
Don't assume the advertised offer is the only option available. It's worth having a conversation about what the builder may be willing to do, especially as the end of the year approaches.
Prefer to Watch Instead?
Want to hear Katie and Sonya talk through the year-end builder incentives they've been seeing, including mortgage rate buydowns, closing cost assistance, quick move-in opportunities, and what buyers should know before visiting a builder?
Watch more new build episodes here:
https://youtube.com/playlist?list=PLFh7q20xizgw&si=xNp33FT8fGblC4uv
Have Questions About Buying or Selling a Home?
Team EvoAZ can help you navigate the real estate side of your purchase and understand the documents and deadlines that come with an Arizona home transaction.
Katie Halle Lambert | Team EvoAZ
Text ConnectWithKatie to 480-508-9828
Have Questions About Your Mortgage?
Whether you're purchasing your first home, refinancing, or simply have questions about your financing options, Ryan is here to help.
Ryan Gilliam | Your Best Mortgage
Text ConnectWithRyan to 480-508-9828
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Looking for homes in the Phoenix area? Text GetPhoenixDeals to 480-508-9828 to browse current listings and great opportunities.
〰️ Looking for homes in the Phoenix area? Text GetPhoenixDeals to 480-508-9828 to browse current listings and great opportunities.
Disclaimer: The builder incentives and interest rates discussed reflect examples shared at the time of recording and may no longer be available. Incentives, financing terms, and eligibility vary by builder, property, and individual circumstances. This content is for educational purposes only and is not financial or legal advice. Consult a licensed lender, real estate agent, or qualified professional for guidance specific to your situation.
