Builder incentive

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lilly jo

Senior Member
Brazilian Portuguese
Hi everybody.

I saw this expression in a website. What exactly is a "builder incentive"??

Here is the fragment: "A sound investment idea! Let's compare the builder's incentive with the actual mortgage product as well as other products available on the market that are competitive. You may pay more in mortgage closing fees than the actual builder incentive is worth."

Thank you,
  • Egmont

    Senior Member
    English - U.S.
    The context, which is important, is this: a real estate broker is trying to convince potential clients that they should use her services to buy their new home rather than buy it directly from the builder. The builder's incentive is a price discount that a builder offers on a new home to people who buy directly from him, instead of using a broker to whom the builder must pay a commission.

    What the broker is suggesting here is that the total cost of buying from the builder, when mortgage closing fees and all other costs are taken into account, may be higher than the total cost of buying through a broker. The additional costs associated with buying directly from the builder may be greater than the builder's incentive. (I doubt that is often true, but it may be true some of the time. In any case, that's what the phrase means.)
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