In yet another sign of the times, K. Hovnanian, a somewhat struggling national home builder, who has a local Santa Clarita development, more specifically in Canyon Country, is actually offering referring buyer agents 10% commission! They’re offering this incentive to agents on 11 15 specific homes (increased while researching this post!), that appear to be stale inventory yet to be sold, or homes that possibly had previously cancelled contracts. Cancelled contracts are typical of large new home sales, that tend to make people act on impulse, leaving the home destined to sit longer, until the next buyer comes along.
Back in the middle of September 2007, K. Hovnanian had a national sale, dubbed “Deal of the Century” sale, where the builder sold an incredible amount of homes nationwide during the highly advertised 3 day sale, reportedly about half it’s inventory of empty homes, which is huge, and defintely better than they expected.
Hard Times Persist: Struggling to sell homes in most corners of the map, K. Hovnanian has run into troubles lately, much like other national home builders who have similar problems to speak of, such as large inventories, debt on items such as land, and profit losses. It’s been reported that K. Hovnanian has reduced its workforce by about 40%, and the company has lost approximately 70% of it’s value since the beginning of 2007. The company says that it experienced 40% of pending contracts cancel in the 4th quarter due to stricter lending standards, which has made it tougher for consumers to obtain a loan to finalize the purchase.
K. Hovnanian’s two communities in the Canyon Country area of Santa Clarita are called Remington at Stetson Ranch, and Winchester at Stetson Ranch. Both communities offer large homes, most in the low 3,000 sq ft range, and mainly priced in the mid and upper $600,000 range, while there are a few in the upper $500′s, and a few in the lower $700′s. With dramatically lower prices in this K. Hovnanian community, compared to 2006 (when some sold in the low $800′s), and this added 10% commission incentive for buyer referrals from agents, one doesn’t have to look too far and realize just how different this real estate market is, compared to just one year ago, or even early 2007!
Offering a 10% commission is pretty unprecedented in Santa Clarita, especially for homes in this price range, or really any others that I’m aware of. If a Realtor brought in the buyer, who purchased a $572,900 house, that means they would receive a measly $57,290 commission check! Previously, K. Hovnanian was offering 5% commissions to buyer agents at these two communities on most homes. Apparently they feel doubling it to 10% might turn a few heads, and do the trick! Time will tell.
Questions? Comments? Insights?
Remember…when buying or selling Santa Clarita real estate, call me 1st.
Robert Mickalson, Realtor
Vintage Sotheby’s International Realty
661.219.2260 or 661.373.2374
Search the Santa Clarita MLS like a pro @ www.TheScvAgent.com
Search the UP-To-Date Santa Clarita Tract Directory! Go to www.TractDirectory.com
Related Posts That May Interest You:
