How to use incentives to sell your home in a tough market

Here are some ways you can sweeten the pot and beat your competition with a sale

Out here in the field, we’re seeing home prices fall as sellers respond to housing pressures. Some sellers still expect high sales prices for their homes, but the changing real estate market is resisting high prices and is causing sellers to reevaluate their expectations.

It’s a whole new ball game and if you want to play you have to know the new rules. Getting an agent to list your home on the local MLS system and wait for the offers to roll in is no longer enough. Today, traditional sales methods are not enough to sell your home for a decent price within a reasonable time. Homebuyers have too many choices and home options to choose from. They drive the market and your home is just one of many they evaluate.

The obvious response to the market, which has been adopted by many sellers, but at a price, is to lower the price of your home to among other comparable homes in your neighborhood. While many sellers have built in some leeway between their asking price and their bottom line, buyers are asking for discounts that will significantly erode the seller’s profit, sometimes to zero. Those who have to move quickly, for example for work, will even take a loss to get rid of the burden of two mortgages or rents. This situation also offers real estate investors the opportunity to make good bargains.

Even in today’s market, you don’t have to lower the price of your home to the point where you lose. There are other ways you can add value to your home, even if it’s just perceived value, that can make a good profit and still sell in a reasonably short period of time. Using sales incentives can be a very smart and cost-effective way to add value to your home without sacrificing much of your possible asking price. Here are some things that can sweeten the pot and make your home a more attractive choice for potential buyers:

1. Offer a 3% commission to the buyer’s broker. Some realtors won’t show your house for less and they will most likely take your house apart in front of the buyer when they show it.

2. If you are a member of a VvE, pay the new buyer’s contribution for the first year or longer.

3. Buy a home warranty, which protects all appliances in the home, including the air conditioning and heating systems. The cost is usually less than $450 for a year.

4. You can pay all or part of the buyer’s closing costs, which can be deducted from your sales proceeds at closing, leaving you with no out-of-pocket costs.

5. Pay the buyer’s property taxes for a year or a specified period. You may have already paid part or all of it anyway. Again, no out-of-pocket costs.

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6. If you have an oil heater or propane, give the buyer a full tank of fuel.

7. Offer free lawn mowing or landscaping for a period of time.

8. Provide any new carpeting or kitchen appliances or leave furniture that the buyer desires.

9. Offer to pay for the buyer’s property insurance for a year or more.

10. Buy off the buyer’s mortgage points by a point or two. This adds significant value to the buyer in terms of dollars saved and it costs you very little.

If you think about it, you can probably think of more. I’ve suggested and used these and other methods to differentiate my clients’ homes in this tough seller’s market. Plus, if you spruce up your home with new paint, especially the front door and kitchen, landscape your yard, clean it thoroughly, and stage your home to show it in its best light, your home will outshine the others in your neighborhood.

One last suggestion – hire a skilled real estate agent. A realtor will make sure you don’t leave money on the table and help you with all the ways your home can be the best buy on the block. I can always justify my commissions because I get the home seller more money than he could on his own. A high performing pro will make you money and not cost you. Just ask the many ‘for sale by owners’ who ended up hiring a real estate agent after a failed attempt to self-sell or those who ended up getting much less than their asking price. But if you’re determined to go it alone, the tips above should help.

Until next time,

Bernie Rosellen, Real Estate Auctioneer