When Price Reduction Isn’t An Option


When you won’t or can’t lower the price to get you hoem sold any further and you’re still not getting any nibbles, it’s time to get serious. Outlandish incentives may make headlines, but the incentives with the most power to get a home sold are the ones that meet homebuyers’ practical [Special Emphasis] needs.

Get off the fence and make a decision: Areyou going to sell or stay?

Sell or Stay? That is the question.

If it’s time for you to get serious you’re in luck. We’ve got three that have a prove track record of moving buyers off the fence.

1. Interest rate buy-down

There’s nothing wrong with sellers offering to buy down the buyers loan rate by “paying points” to their lender.  It is legal and it means they’ll award the buyer a certain number of percentage points of the sales price, which will, in turn, be used by the buyer’s lender as discount points that bring the buyer’s monthly payment down. Of course buyers have to lock in their interest rate, and that means it’s time to get ultra-serious, about buying your home. Seller-paid rate buy-downs save buyers a lot of money over the lifetime of their loan. Plus, the points are usually tax deductible to the buyer the next time they file taxes. We are not accountants so confer with your accountant for confirmation of this notion with current tax law.

2. Closing cost credit

Many buyers trying to break into the market are already scraping the bottom of their savings barrel to come up with a down payment. On top of that, they’ll have to come up with anywhere from 3 to 6 percent of the loan amount, in cash, to cover closing costs. But some smart sellers will pay a credit of 3, 4, 5 or even 6 percent of the home’s sale price at closing, to defray the buyer’s closing costs. This credit is a great financial help to buyers and a strong differentiator that can  set your home apart from other listings. We can run the numbers in an Estimated Cost Sheet to formulate and plan on how much you can afford to offer, and how to market the perk to prospective buyers.

3. HOA dues credit

If your home is part of a homeowners’ association, you likely have monthly or annual dues. Some communities even have a Capital Preservation Fund that has a .5% to 1% one-time fee that goes to keeping the community in the best possible condition. It’s also likely that you can recall buying that home and being overwhelmed at the prospect yet another monthly housing expense.

To overcome buyer concern about a regular expense -that often appears to be an intangible- and differentiate your unit from other units for sale in your complex, you can offer  a credit at closing that covers the HOA dues for 6 months, a year, or even longer.  This is a solid strategy when there are several homes in the neighborhood that present a viable alternative choice to your own.  It is important to present the offer in a way that will deliver the maximum “sizzle” for buyers but won’t conflict with any seller credit guidelines imposed by the buyer’s lender. Every lender is different so it is important to think abgout this early in the process.

About FineHomesDigest

The Fine Homes Team, Mark Finchem, Associate Broker with Long Realty Company, provides service to buyers, seller and builders where fine homes are concerned. With extensive experience in residential real estate transactions we can help you with the home you'd rather have.
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