Best incentives to buy

The Rushmore, with 5-year financing at less than 5% (although earlier they said that was through the end of '08), and I think 3% closing costs.

ap2492, are you looking at any developments in particular, or just want the general scoop on what's being offered out there? It varies considerably depending on the development, but I've seen mixing and matching of the following (anyone should add - I'm sure I'll miss some since there are so many, and they get more and more creative):

* paying some or all of transfer taxes, mortgage tax, attorney fees, etc.
* below market interest rates on 30-year mortgages (ie: 4.0%)
* free or cheaper parking spots, outdoor spaces, storage
* paying several months' common charges (I've seen up to a year in some cases)
* price matching if future closings are at lower prices (not as good as it seems)
* paying for movers
* gift cards, gym memberships, and lots of other similar gimmicks

Wow, who's providing the financing for the jumbo mortgages that low?

aifamm, here's the info. I'm sure there's a few catches in there, but it's part of the list:
http://curbed.com/archives/2008/12/30/door_prizes_in_which_we_explain_belltels_4_interest_rate.php#more

I am not interested in Brooklyn, or Queens developments, strictly manhattan up to 96th street East Side prefer...would even consider a condo conversion

$

probably not the type of incentive you are looking for but I have considered offering a 46" Sony Bravia LCD flat screen with the purchase of my FSBO. any thoughts?

http://web.me.com/seif69/11K/HOME.html

"Wow, who's providing the financing for the jumbo mortgages that low?"

There's another building where the developer is offering similar mortgages in Brooklyn and another one on UWS - 905 West End Avenue -
The reason they're able to do this is because of how cheap Treasuries are - think about it for a minute (I had to) - if Treasures are yielding something like 2%, which they are now, the developer can essentially become a seller of Treasuries (via some kind of derivative - they exist, they really do) and in so doing give himself a pool of capital which costs him 2% (plus the creation fee).

He then takes this capital, and offers out mortgages at 4% or 5% (or the one on the UWS is I think 4.87% or something), helps to clear his inventory of apartments he's trying to sell, and also captures some spread on the mortgages themselves.

Neat huh?

liquidpaper, even using some sort of derivative, wouldn't the fee be tied to the developer's credit (and likely paid on an ongoing basis) in such a way that the developer would effectively be paying its cost of capital, not the Treasury's?

As I understand it, and I am by no means expert in this, the fee to creat the derivative is calculated like a commission on a vanilla transaction and paid at the time of creation. To be sure the resulting cost of capital would be greater than when the Trasury department sells a bond, but as it was explained to me, the point is that their total costt of capital is still lower than the "cheap" mortgages as decribed above they are then able to offer.

Sounds like another disaster waiting to happen.

Just curious what would happen if a developer went under in this situation? I would think that the bankruptcy court/other creditors would require a call on the mortgage and the owner would therefore immediately need to come up with the cash through a separate financing scheme, which could prove difficult. I'd much rather have some other incentives (reduced PP, parking space, etc.) and not take this risk.