Here are some ways in which you can sweeten the pot and beat your competition to a sale
Out here in the field we are seeing home prices dropping as sellers respond to housing market pressures. Some sellers are still expecting premium sales prices for their homes, but the transitioning real estate market is resisting high prices and causing sellers to re-evaluate their expectations.
It’s a whole new ball game and, if you want to play, you need to know the new rules. Getting an agent to stick your home on the local MLS system and waiting for the offers to come in won’t cut it anymore. Today, traditional sales methods are not enough to sell your home in a reasonable time for a decent price. Home buyers have too many choices and home options to choose from. They are driving the market and your home is only one of many that they are evaluating.
The obvious response to the market, which has been adopted by many sellers, but at a price, is to reduce the price of your home below other comparable houses in your neighborhood. Although many sellers have built in some wiggle room between their asking price and their bottom line, buyers are asking for reductions that will significantly erode the seller’s profit, sometimes to zero. Those who have a need to move quickly, for employment for example, will even take a loss in order to remove the burden of two mortgages or ending up renting. This situation, by the way, offers real estate investors an opportunity to pick up some good bargains.
Even in today’s market, you don’t have to drop the price of your home to the point of taking a loss. There are other ways in which you can add value to your home, even if it is only perceived value, that will enable you to make a good profit and still sell in a reasonably short time. The use of sales incentives can be a very smart and cost-effective way to add value to your home without sacrificing much of your asking price, if any. Here are some things that can sweeten the pot and make your home a more attractive choice to potential buyers:
1. Offer a 3% commission to the buyer’s agent. Some agents will not show your home for less than that and they will most likely pick your home apart in front of the buyer if they do show it.
2. If you’re in a homeowner’s association, pay the new buyer’s fees for the first year or more.
3. Buy a home warranty, which protects all the appliances in the house including the air conditioning and heating systems. The cost is usually less than $450 for one year.
4. You can pay all or part of the buyer’s closing costs, which can be deducted at closing from your sales proceeds, so you have no out of pocket expense.
5. Pay the buyer’s property taxes for a year or some period. You may already have paid a portion or all of it anyway. Again, no out of pocket expense.
6. If you have oil heat or propane, give the buyer a full tank of fuel.
7. Offer free grass cutting or landscaping for a period of time.
8. Provide all new carpeting or kitchen appliances or leave furnishings that the buyer may want.
9. Offer to pay the buyer’s property insurance for a year or more.
10. Buy down the buyer’s mortgage points by a point or two. This adds significant value to the buyer in terms of dollars saved and it will cost you little.
If you think about it, you can probably come up with more. I have suggested and used these and other methods for distinguishing my clients’ homes in this tough seller’s market. In addition, if you spruce up your home with new paint, especially the front door and kitchen, landscape your yard, clean thoroughly throughout, and stage your home to put it in it’s best light, your home will outshine the others in your neighborhood.
One final suggestion – hire a competent real estate agent. An agent will ensure that you don’t leave money on the table and help you with all the ways in which 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 top-performing pro will make you money and not cost you. Just ask the many ‘for sale by owners’ who ended up hiring an agent after an unsuccessful attempt to sell on their own or the ones that ended up getting much less than their asking price. But if you are determined to go it alone, the above tips should help.
Till Next Time,
Bernie Rosellen, Real Estate Auctioneer