Buyers, sellers and other market participants typically monitor fluctuating home values through sale records that legally have to be listed with county clerks. But incentives offered to buyers -- ranging from free cars or furniture to cash rebates -- are making those prices less reliable as a sign of what buyers actually paid, netting out the giveaways. And that may be misleading lenders and people shopping for homes, some real-estate lawyers and appraisers warn."
Some examples where the incentive is not public:
• KB Home, Colorado: $196,000, according to deed.
Actual price = $168,400
Buyer disclosure form: KB paid $27,600 to 3rd firm, which made a cash payment to the buyer.
• Lennar, Florida: $479,000
Actual price = $450,000-459,000
Home buyers received Vouchers to purchase Mustangs, or a $20,000 Harley-Davidson.
• Bennett Homes, Maryland: $600,000
Actual price = $469,000
And of course - The Back Door - Screw the Buyer
Originally listed in February 2005 for $635,000; Wells Fargo held two mortgages: first for $479,800, second for up to $120,000. Buyer's agent said the transaction included a $120,000 "payment by the builder to an organization that collected fees for finding buyers."
- From Barry Rhitholtz - The Big Picture