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Talk about a buyer's market. Thanks to a steadily growing inventory of newly constructed homes, many homebuilders are being forced to offer extravagant incentive packages to sell their houses. This translates into great opportunities for those homebuyers savvy enough to shop around and negotiate the best deal.

"In order to preserve home values in a particular neighborhood, homebuilders are offering all kinds of incentives and upgrades," explains Roberta Murphy, an agent with Villa Sotheby's International Realty, in San Diego.

By including free upgrades and incentives in the purchase price of a home, builders can obscure declining prices, which upset neighbors and, in some cases, trigger price-decline guarantee payments.

Pricey upgrades that builders traditionally charge an arm and a leg for, like granite countertops, professional-grade appliances, hardwood flooring, landscaping and swimming pools, are being tossed in for free. Buyers of homes positioned on golf courses are furnished complimentary club memberships, while purchasers of snowbound properties are presented with ski equipment and lift passes. If neither applies, the builder might toss in an all-expenses-paid vacation to Hawaii.

Some incentives are more directly fiscal in nature, Murphy says. To attract buyers, builders will offer low "teaser" interest rates, spring for points upfront to permanently lower interest rates, or agree to make six month's worth of mortgage payments. This is especially true when the buyer agrees to use the builder's lender.

But builders don't voluntarily give away the farm, warns Murphy. "The average buyer may or may not be aware of who's offering what deal at any given time," she says. Murphy strongly advises that home buyers use an experienced agent who is familiar with the market and can negotiate the best deal. It doesn't cost the buyer any more money and will likely save them a bundle.

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