Incentive and buydown optimization model

Every incentive and buydown dollar traced to the closing that took it and the qualifying payment it had to clear. Buy down to the line the buyer needed, not past it.

$1.40M

Reference-scale value

Data sets in the model

8 weeks

Build and deploy

Derived

Evidence grade

A buydown only has to clear the payment test

Incentive is a real cost of transacting in this market. At $6.41M against 450 closings it is the price of moving homes in a rate environment nobody chose, and no model argues that away.

What a model can do is ask a narrower question: of the dollars that went out, which ones changed an outcome and which ones cleared a bar that was already cleared.

A two-one buydown and a one-nought buydown both close the sale when the buyer qualified either way. The difference between them averages $9,400, and forty-one closings a year take the deeper structure without needing it.

Nobody decided to do that. It happens because the structure is chosen at the table, in front of a buyer, by someone who would rather be too deep than too shallow.

Cause 01

Buydown deeper than the test required

Forty-one of a hundred and eighteen buydowns cleared the qualifying payment one step shallower, at $9,400 less each.

Cause 02

Incentive granted after commitment

Thirty-eight closings took incentive at or after contract rather than to win it.

Cause 03

Uniform programme, non-uniform absorption

Sixty-three closings in communities already above absorption target carried the full programme. Forty-five per cent of it is credited to elasticity and not claimed.

Cause 04

Programme run-on past its purpose

Four programme-months a year still running after the release they were written for sold through.

Want more detail?

The rest of this model — the data sets it runs on, the cause split, the working behind the reference figure and a sample output — goes out by email. Two fields, nothing else.