Top Home Seller Incentives?
Tuesday, January 24, 2012
Reduce the Selling Price
I find this to be the most common buyer incentive. It’s frequently the first thing buyers will notice and it appeals to everyone. However, in order to avoid you losing out on money, I generally recommend adding incentives before reducing the price.
Paying a Bit of the Mortgage
Sometimes the seller can offer to pay a percentage of the mortgage amount. However, buyers considering this tactic should be aware that the assistance on the mortgage doesn’t last forever. I find that typically this spans about one to three years. You should be able to plan for a time when the window closes and payments return to their normal amounts.
Aiding the Down-Payment
If this is a first-time homebuyer, sometimes the most difficult thing for them can be coming up with the down payment. This could be a fantastic incentive for a seller, since first-time homebuyers will likely need help in this area. It helps get people into homeownership, but the downside is that the seller is financing the additional amount.
Helping Out with Closing Costs
If you choose to cover the closing costs, that can range from things to taxes, to title insurance and they can add up. I find they typically range between 2% and 7% of the loan value. Many buyers will be interested in having the seller help out.
Throw in a Home Warranty
This can be a really neat incentive – adding in a residential service contract. It basically acts as insurance for a home’s systems, such as plumbing, heating and cooling. This generally costs a few hundred dollars and I consider it an inexpensive add-on. If it will give a potential buyer some peace of mind and avoid the tactic of reducing the selling price? I say go for it!
There are some naysayers, who claim that there can be confusion over what elements are covered. In addition, if a problem arises that is pre-existing, the assistance offered could be limited.
If your buyer is a Do-It-Yourself handy person, who can take on projects himself or herself, this warranty may not be necessary. Or if the home is newly built – how much could possibly arise in the first few years?
For any potential complications, make sure you and your buyer go over the service contract together. Call the insurance company if you have any questions.
Last, I recommend that if the seller is paying for this add-on, it goes an awfully long way to have the buyer choose which company to use. That way they can be assured of the product they’re getting.
It’s the Little Things That Count…
I tell everyone that each buyer is unique in terms of wants and needs. Little add-ons can be common or something I have never heard of. It all depends on what turns the buyer’s crank.
Paying the homeowner association fees – although this is more common with condos – are sometimes offered and it can go a long way.
If the house you’re selling has a pool, I find it can be helpful to offer a year’s worth of upkeep for it. Many people new to pool ownership may find this a relief when faced with task of maintaining a pool.
However, keep in mind that the buyer must genuinely want this add-on. If they don’t, it will not have the intended impact.
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