Is your home stuck in a selling rut? Sometimes it is the little things that close a deal. If your home is already priced at fair market value, consider offering prospective buyers some extras that make sense and are attractive, but don’t cost you too much. These “Buyer Incentives” or “Seller Concessions” are perks that the seller offers to the home’s eventual buyer to help close the deal.
Commonly offered items in today’s market include:
- Seller-funded home warranties. A home warranty usually ranges from $250-$450 depending on the coverage and covers a multitude of home items and systems. This could be especially appealing to a first time home-buyer who has no experience maintaining a home.
- Upgrade or make improvements that the buyer desires. “They loved it…but… the other home for sale in your neighborhood had automatic garage door openers,” your agent tells you. These types of DIY projects usually stay below $500 are a quick fix to up-the-ante on your home’s perceived value.
- Provide a Repair Allowance. If you know the property needs some updating or repair but don’t know what the new owner’s tastes are in decor, consider putting a repair allowance addendum in the listing. This is a great for things like carpet replacement or fixture upgrades, however, make sure to state a monetary cap in the agreement.
- Payment of some or the entire buyer’s closing costs. Closing costs typically run anywhere from 2-5% of a home’s purchase price. This incentive is appealing because it may be difficult for some buyers to obtain 100% financing, causing “short on cash” buyers to skip your home.
- Pay Points (Interest Rate Buy-Down). A loan point is equal to 1% of the loan balance. On a $200,000 mortgage, that amount is $2,000. Even though there is not a major drop in the buyer’s interest rate or payment after deducting a few points, savvy buyers know that they will save loads on their mortgage in the long run.
- Prepaid HOA or Association Dues. If dues are $100 per month, that’s $1,200 a year a buyer does not have to worry about and/or come up with after the expense of buying a home.
- Prepaid Property Taxes. You can put a lump amount into their escrow account at closing or pay it directly to the tax office. Either way, it alleviates the sting of paying taxes.
Above all, you should make sure that your home is correctly priced. Unlike kids who want the box of cereal for the toy inside, the buyer is not going to pick your home just for the incentive that comes with it. These buyer incentives and seller concessions should complement a saleable property to give it a kick start back into the market. Discuss with your real estate agent if any of these incentives may be a good option for your property. Contact a Carter & Roque Real Estate professional today at 301-759-0100!