In a buyers market, it is difficult for sellers to get the asking price on their homes. Sellers must be creative and think outside of the box. 10 ways to get your asking price (or closeto it) are listed below:
Mortgage payments for 3 to 6 months. How would you like to move into a house and make no payments for 3 to 6 months? On a $300,000 mortgage at 6 percent interest, the principal and interest payment is $1,798.65 per month -- over three months, the buyer would save $5,395.95; in 6 months, more than $10,791.90.
Buy-down points to lower the interest rate. For some buyers, it's all about the monthly payment. Try coaxing them into your price with an offer to buy-down their interest rates with points paid by the seller. If they can get the interest rate low enough, they will be able to carry a higher mortgage for a lower monthly payment because of your point money left at the table. This is a technique of "selling the deal" more than selling the house.
Year-long HOA Fees. Looking for a more practical buyer benefit? How about relieving them of those expensive home owner association dues. Depending on the community, these fees could top out to more than $500 per month -- that's $6,000 for the first year. Offering this benefit could definitely help the cash-poor buyer get into his first condo.
Decorating allowance. Is your décor tired looking and left over from the 80's or 90's? Then offer cash for upgrades, new carpet and a paint job. With good bidding on the job, you may be able to keep your price, give the buyer what he or she wants, and make some money on the backside as well by not dropping your price. Many buyers would love $20,000 to spend the way they want on decorating.
Finished rec room. You may be able to complete an unfinished space for less than what the buyer wants to lower the price. This gives the buyer a lot more than just money in his pocket. When you're talking monthly payments, $50,000 in the mortgage amount would be $299.78 per month. By negotiating $50,000 in remodeling costs, the buyer could come up with a third more living space for less than the cost of a car payment.
Vacations. Buy a house, get a Caribbean Cruise. Take some tips from new home builders -- they're professionals at this incentive thing. Sometimes, a buyer might get cash back at the settlement table, but wouldn't dare spend it in a luxurious way. Offer a cruise, an expensive spa weekend, airline tickets to Asia -- or some other out of the ordinary travel package to entice them. When you consider the inventory has more than doubled in some markets, the only thing different from one house to another may be the cruise line.
Free Media room. Did you know that movie ticket sales are down for the third year in a row? One of the reasons is the advent of the at-home, non-sticky, low-ticket price media room. During the recent Christmas holidays, some media room packages, complete with big screen monitor and surround systems were selling for under $5,000. This one investment alone could be the sweetener your buyer needs to sign the bottom line.
Offer seller financing. This option is overlooked by a lot of sellers because they just don't think about it. Seller financing can be in several forms. It can be as a first trust, second trust or even 100 percent financing for the whole house. For the seller who can swing a 1st trust mortgage, this can actually become quite the cash cow. For instance, a $100,000 mortgage offered at 7 percent over 5 years with interest-only payments, followed by a balloon payment of $100,000 would actually result in the seller netting $135,000 over the life of the loan. Not a bad return.
Pay off bills. Some loan programs will allow sellers to pay off credit cards, auto loans, etc, for the buyer. It could make the difference in qualifying for the mortgage and having to buy a smaller, less expensive house. Again, maintain your asking price and offer to pay off debt for the buyer.
Pay closing costs (up to mortgage program limit). Here's the old standby. It's not as fancy as those above -- but it's very reliable and works very well.
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