Home sellers in hot markets typically do not have to worry about moving their houses, since the area is in high demand. If you live in a slow market or your home just isn't appealing to potential buyers, however, you may need to provide them with a little incentive to choose your home over the competition. Here are three seller incentives you should consider offering to help move your home.
Help Reduce Mortgage Interest
People love to save money, and one way you can help potential buyers save a lot of it is by reducing the interest they're paying on their mortgage loan. You can accomplish this in one of two ways.
The most common way is to pay for discount points on the loan. Buyers can reduce the interest rate they're charged by paying 1 percent of the loan amount up front, which will typically net them a 0.25 percent reduction in the interest rate. For instance, on a $200,000 home, paying $2,000 will reduce a 4-percent interest rate to 3.75 percent. While this may not seem like a lot, it can add up to big savings over the life of the loan.
A less-common way is to offer to pay the buyer's mortgage for a period of time (e.g. 6 months). This won't have a direct impact on the buyer's interest rate, but that's less money they have to pay out of pocket for the home. Additionally, if you pay the amount all at once, it will reduce the principal and lead to the buyers being charged less interest.
Gift Card to Local Furniture Store
One thing almost everyone needs when moving into a new home is furniture, particularly if they're young and just starting out in life. Offering a gift card to a local furniture store can be very attractive to potential buyers, especially if that store sells appliances.
However, whether this will work in your case depends on who your target market is. As mentioned previously, this offer may be most attractive to young people moving from their parents' homes or small spaces (e.g. apartments), first-time buyers, and single people. Older people, married couples, and those moving from similarly sized homes may already have all the furniture they need and, thus, not be swayed by the offer.
But don't toss the gift card idea aside if your local market is filled with people who won't benefit from it. Look for other products and services you can prepay for that potential buyers may find valuable, such as landscaping, appliance warranties, and even gift cards to local grocery stores.
Pay HOA or Condo Fees
A third incentive that may give you a leg up over the competition is to offer to pay homeowners' association or condo fees for a period of time. Many times first-time buyers forget to budget for these fees and may be concerned about being able to afford them on top of their other expenses. Offering to pay these fees for a year can provide them with some breathing room to rearrange their budgets (e.g. pay off other bills) to take on the expense.
Whichever incentive you choose to offer, be certain you are clear upfront about what it entails so there is no confusion or surprises later on. If you'll be paying the HOA fees, for instance, make sure the contract stipulates how much you're paying (in case the fees increase) and the date your responsibility ends so the buyers can't complain they didn't know.
For more information about offering seller incentives or help selling your home, contact a real estate agent in your area.Share