Builder cobrokes went from pretty much unheard of in 2005 (realtors were often told by builders that they were unneeded) to rates approaching 8-10% in 2006. In one instance, last year, we saw a 13.5% cobroke, which equated to $75,000.
This year however, we’ve got one builder who has come out of the gate swinging. Hovnanian Homes has some excess inventory it would like to move. According to Bloomberg:
Hovnanian Enterprises, New Jersey’s largest builder, last month reported a fourth-quarter loss on cancellations of orders for new homes. Hovnanian customers canceled 36 percent of their contracts during the period, an increase of 25 percent, the company said.
Hovnanian’s solution– offering a cobroke of up to 16% to realtors. Here’s the ad:
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