Houses still aren't cheap, but buyer incentives are starting to surface as builders try to unload inventory. Inland Homes is among the companies offering incentives.

ANDY JONES / Tribune

New home buyers who play their cards right may be able to shave tens of thousands of dollars off the price, bargain for glitzy upgrades or win the use of a car for two years.

My, what a difference a year makes.

Builders who overestimated this summer's new home demand face contract cancellations and slowing sales as a backlog of nearly finished houses piles up.

The builders' problem could mean big breaks for buyers.

Just glance through newspaper classified advertising sections to see how serious builders are to make a deal. Some incentives:

•Price cuts of as much as $75,000 off the bottom line.

•Deal sweeteners such as upgraded counter tops or having property taxes or closing costs paid for you.

•Drawings for a free, two-year lease on a new car.

"We want to get to the price point that buyers are demanding," said Ralph Sevelius, president of Inland Homes Suncoast. "Obviously we want to stay in business, but we have to sell homes to stay in business."

Inland is offering allowances of up to $56,000 on some homes. The money can be used to lower sale prices or pay closing costs. Some home prices have been reduced as much as $60,000. Realtors who sell inventory by certain dates get bonuses of up to $3,000.

This thinking is in stark contrast to last year's building boom, when buyers camped out to get dibs on home sites and builders kept waiting lists and held lotteries for home purchases. Last summer, builders released three to four homes a month for sale so they could raise prices later.

Competing Investors And Builders

With interest rates edging up and home prices leveling out at record highs, fewer people are choosing to buy. The Wall Street Journal reported Thursday that the inventory of homes for sale - both new and existing - in the Bay area has increased 294 percent compared with this time last year.

Investors who bought months ago now are competing with builders to unload their homes. Analysts say some investors and consumers are leaving their contract deposits behind and walking away from homes under construction.

"The cancellation rates builders are seeing are comparable to those builders were seeing after 9/11," said Rick Murray, a Raymond James analyst who follows housing trends. "Investors are bailing, and so are legitimate buyers. … They fear it's not the best time to buy."

For some buyers, incentives may be just what is needed to seal a deal, but discounting and premiums also make the market tougher on builders.

Some people wait to buy, expecting builders to offer a better deal later, said Beth Day, assistant vice president for marketing for Bruce Williams Homes, based in Bradenton.

"We want to help the consumer who's really ready to buy but fear they'll miss out" by not waiting, Day said.

Guaranteed Pricing, Other Incentives

So Bruce Williams Homes is experimenting with guaranteed pricing. If the price goes down on the same house in the same neighborhood after you sign the contract and before you close on the home, the builder will give you the same discount.

For now, the builder only offers the deal in The Preserve at Lexington, in Parrish. If it helps increase sales, she said, it may be offered in the builder's other developments.

They're not the only ones trying to beat the incentive game with guaranteed pricing. Mike Southward, Tampa Division President for Lennar Homes, said his company is offering it, too.

"We feel we're already offering buyers the lowest price we can," Southward said. "So we're giving buyers this insurance."

Since January, Lennar has lowered prices on some homes by as much as $65,000 on a $315,000 home, but Southward said Lennar can't afford to lower prices further. Instead, it's sticking with guaranteed pricing.

"It just got to be that we were knocking our head against the wall," Southward said. "When you're negotiating, one guy gets a better deal, and that's not fair." The company, however, is offering increased broker commissions and incentives on inventory homes.

Kevin Robles, division vice president for McCar Homes, based in Atlanta, said he has seen some builders discount homes as much as $100,000, "but they probably had the home overpriced by $50,000."

McCar, he said, has six months of inventory to sell. Instead of deeply slashing prices, the builder is lowering the price on lot premiums and offering up to $7,000 in free upgrades, Robles said. McCar also is "buying down" mortgage interest rates. For example, the rate would start low, then increase yearly, topping out at the going rate on the purchase date.

Some cancellations happen because buyers can't sell their homes, said Brenda Kunkle, vice president of marketing at Newland Communities, which develops subdivisions and works with numerous builders.

"They can't close on their new home if they haven't sold their current one," Kunkle said.

There are just under 30,000 homes on the market, according to the Greater Tampa Association of Realtors. That's nearly four times the amount in spring 2005. The organization doesn't track new home sales.

Tampa isn't alone. In April, the number of sales in Florida fell 31 percent compared with the same month last year. Sales in the Tampa-St. Petersburg-Clearwater area dropped 37 percent for the same period.

Existing Homes

All the builders' incentives could make the existing home market worse since most sellers aren't in a position to offer the kinds of incentives builders do.

They're trying unique approaches.

In Westchase, Daniel and Cynthia Lobb, who put their home on the market in April for $429,900, are frustrated by the lack of buyer interest. They lowered the price to $414,900, but still got no takers. Now they're telling prospective buyers that 1 percent of their profit will go to charity.

"There are so many houses in supply in our area," Daniel Lobb said. "We thought, 'What can we do differently to set us apart?'"

Reporter Jonathan Kaminsky contributed to this report. Reporter Shannon Behnken can be reached at (813) 259-7804 or sbehnken@tampatrib.com.