Builder Incentive how does it work?

Saif · Sep 11, 2019 6:51 pm

Hi
We are first home buyers and planning to build in Victoria. We approached few builders and one of them offered 25k incentive on the total cost 275k.
He said it would cost me 250k. But when I go to the bank, I must go for 275k not 250k and the builder would just not take the last installment.
Not sure how this works.
Is it common ?
Will this imapct my deposit?

Thanks

Melos · Sep 11, 2019 6:56 pm

I don’t think this is how most builders do it. They have a package and it covers a bunch of things it’s added onto the price and that’s the price. Then you can spec the house up from the base product with things like upgraded tiles etc. but this is all calculated prior to going to the bank. This sounds ******* to me

StructuralBIMGuy · Sep 11, 2019 8:14 pm

Hi Saif
Welcome to the forum
That is salesman's nonsense and can potentially get you into a lot of trouble
With the lenders and lending Authorities
ATM, salesman are offering up everything from the kitchen sink upgrades to trips to Bali...but you still pay?

Norfolk · Sep 11, 2019 8:23 pm

Get them write the true cost into the contract, the drive away price, don’t accept smoke and mirrors sales offers. If they can’t be straightforward at this stage find another builder that is. The market is tough for builders right now. Negotiate low and hard.

luxbuild · Sep 12, 2019 12:21 am

Sounds a bit like this Port Davis offer. You have to be prepared to pay the full amount in case you don't qualify for the discount.

viewtopic.php?f=31&t=94493

Sounds good, but may leave the owner with little leverage over the builder at the end.

Saif · Sep 12, 2019 7:03 am

luxbuild

Sounds a bit like this Port Davis offer. You have to be prepared to pay the full amount in case you don't qualify for the discount.

viewtopic.php?f=31&t=94493

Sounds good, but may leave the owner with little leverage over the builder at the end.

Thanks luxbuild lot of info in that thread

StructuralBIMGuy · Sep 12, 2019 8:20 am

You will need to have saved the extra money
as I doubt the banks will lend it to you as the banks valuations would be way less
Thanks for the link

Melos · Sep 12, 2019 8:46 am

luxbuild

Sounds a bit like this Port Davis offer. You have to be prepared to pay the full amount in case you don't qualify for the discount.

I’d love to know how many people qualify for the discount

StructuralBIMGuy · Sep 12, 2019 9:05 am

You don't want to be
Slogged with unexpected bill after the build
I suggest you check the Engineering Very Carefully. hth

building-expert · Sep 12, 2019 1:35 pm

If it's an incentive to sign a building contract with the builder why don't you ask they give you a bank cheque for 25K at contact signing?
Anything else is BS

Norfolk · Sep 12, 2019 2:22 pm

Plus a set of steak knives