Oakwood Homes sales tactics and incentives are not what they seem
Posted by Johnny Utah on
COLORADO SPRINGS, COLORADO -- Oakwood Homes, a "premier" new home company based in Denver, advertises quality and value as their biggest selling point. With 2x6 exterior construction, blown-in insulation, and concrete roofing tiles, they do have a lot to offer. HOWEVER, they will use these "advantages" to justify higher pricing for their products. Be wary of their sales tactics, incentive programs, and company policies. Here's why:
- Sales Tactics
They will tell you that they are the only builders that offer these products. They will try to justify that "2 years ago, they didn't offer incentives, so you should feel lucky to be getting them". Additionally, they will tell you that all new home builders in Colorado don't negotiate sale price, incentives, or closing costs.
- The Truth: with the increase in "green" living, most builders are offering these higher quality products, and for less! In addition, Oakwood is one of the only ones that DO NOT negotiate price, incentives, or closing. They are the exception, not the norm. You are a customer, not a commodity...and you are valuable. Remember that.
- Incentive Program
Oakwood offers 24,000 in Homebuyer's CREDITS in several combinations which appears competitive to what other builders offer.
- The Truth: realize that 24,000 in credits does not equal an actual cash value of $24,000. While ingeniously marketed to APPEAR equal to cash value, these incentives may actually only be worth 50-75% of the actual cash value. Bottom Line- 24,000 in homebuyer credits does not equal $24,000 in value! (more like $12,000-$18,000...if you're lucky).
Oakwood has strict policies in that they do not negotiate home price, incentives, or closing costs. As far as home price goes, this is a good policy in that dropping the price of a $300,000 house to $280,000 for one buyer screws the buyer that just bought it for $300,000, not to mention bringing the price of homes down for the neighborhood.
- The Truth: while home price may not be negotiable, those other factors (incentives, closing costs, cash back) should be negotiated as they DO NOT affect home price.
The lesson: being a well-informed buyer when it comes to the new home market is important if you want to "get what you pay" for and avoid any unnecessary costs associated with your purchase. There are a few key things you need to really know to make your home buying experience a good one:
1. Know what is included/not included in the home you are considering for purchase. Do not assume, as you will be surprised. Many "premium" builders will nickel and dime you for everything- even charging extra on something as simple as cable hookups and phone jacks that most builders would include as standard.
2. Know what incentives the builder is offering and how they will negotiate them. Always ask- the worst they can tell you is "no".
3. Understand what is included in your closing costs, paying close attention to what the buyer can/should pay (if at all) and what the seller can/should pay. New home sales reps will try to tell you each state is different, but after long-hours of internet research I am here to tell you that closing costs are legitimately negotiable across the nation. Beware of the company that claims they do not negotiate closing costs as they are probably more worried about their bottom line than making you their customer and giving your home buying experience real value.
4. Pay attention to this one. Knowing what other similar builders in the area offer as far as quality construction, incentives, and negotiation of closing costs gives you leverage and will make your decision making easier.
DO YOUR RESEARCH. The internet is a wonderful tool!