Free Kitchen Upgrades, Oh -- and Airline Miles

The housing slump may be the best thing ever to happen to new-home buyers. Big, national builders are making unheard-of cuts in prices and offering other incentives, giving local builders no choice but to follow suit. According to the National Association of Home Builders, 75 percent of builders are offering incentives.

Some deals are spectacular. St. Lawrence Homes, a regional builder in North Carolina and Ohio, recently offered a new car with the purchase of a home. Under a new program, Schumacher Homes, a national custom home builder, will make your first year of mortgage payments.

A more common incentive: free upgrades. "The builder may spend only $6,000 to give you $10,000 worth of upgrades, so the margin works for them and the buyer gets a deal, too," said Brian Kennedy, a lender in Chapel Hill, N.C., who works with several builders.

Richmond American Homes recently offered up to $35,000 toward upgrades in some parts of the country.

Jamie and Nate Kelly of Cupertino, Calif., discovered an offbeat incentive -- airline miles. Incentive Real Estate, which has operations in California and Maryland, works with builders to bring in buyers and offers 250,000 miles for the purchase of a home that costs more than $500,000, or 100,000 miles on a less-expensive home.

Jamie Kelly, a mother of three who dreams of a trip to Hawaii, said she's seen other deals, but the miles struck a chord. "A vacation is a great incentive, especially with as many tickets as we'll need," she said.