While the housing market overall is improving, as a seller you still have much competition when putting your home for sale. Because of this you need to put as many attractive incentives in your offer as possible to lure buyers into your home to close the deal. There are many different types of incentives you can offer and you are limited only by your imagination. I recently saw a listing on Realtypin.com where the seller offered to hire a cleaning service to come in once a month and clean the house for six months after the closing. This was one of the more creative buyer incentives I had seen in a long time and goes to show how sellers and real estate agents are thinking out of the box in order to make a property attractive to a potential buyer.
Deciding what incentives to offer can be tricky. You want to make offers that will appeal to the widest variety of buyers. The good news is there are a couple of tried and true offers that will entice buyers to follow up on your listing over someone else’s.
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• Offering a home warranty. One of the biggest fears buyer’s deal with when purchasing a home is the thought of everything in the house breaking down ten minutes after all of the paperwork is signed. This is why they are willing to spend hundreds of dollars on a home inspection to minimize this risk. However even the most thorough home inspection is not a guarantee that nothing will go wrong. The easiest way to alleviate this common buyer fear is to offer a home warranty. There are different types of home warranties available. Some will only cover appliances and others will cover everything including air conditioning units, heating and plumbing. The good news is even the most thorough of these warranties is not overly expensive.
You can purchase a whole home warranty that covers everything I mentioned here for an entire year for under $450. A buyer who knows they have this type of protection will feel much more comfortable purchasing your home and in turn will cause your home to sell faster.
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• Paying for closing costs. This is one of my favorite buyer’s incentives because if you do it right it actually can cost you nothing at the closing table. Paying for buyer’s closing costs is done through your purchase contract and normally will state that you are willing to contribute a certain percentage of the purchase price towards the buyer’s closing costs. This is normally anywhere from two to six percent of the price. This is a great incentive to buyers because many times they can not come up with the funds to cover the entire cost of the purchase. Also most lenders, including FHA, will also allow this type of credit at closing. The buyer looks at this as money they save when purchasing the home. The way you can do it so it doesn’t cost you any money is to raise the purchase price of the home by the amount of the credit you are giving. So for example if you plan on selling the home for $200,000 and want to offer a six percent closing cost credit to the buyer then raise the price of the house by six percent to $212,000 so the net to you at closing would still be $200,000.
While this may seem like a turnoff to buyers let me explain the benefits they will still receive. They can finance the closing costs as part of their mortgage. Let’s say they are obtaining an FHA loan and getting 97% financing on the purchase price. With a $200,000 purchase they would get a loan for $194,000 and then would have to bring $12,000 cash to closing. With a $212,000 purchase they would get a loan for $205,640 and have to bring no cash to closing. For a buyer who is strapped for cash this could mean the difference between purchasing a home or not. Also, the higher loan amount may only mean a difference of $20 or $30 a month in their payments. They would gladly trade this slightly higher payment for the benefit of not having to bring an additional $12,000 cash to the closing table.
Source: Realty Pin