Plano Home Buyer Incentives
Flashy incentives like a new car parked in the driveway or a flat-panel television hanging in the den might sound like a good way for home sellers to woo buyers in a dismal real-estate market. But when it comes to actually enticing someone to buy a home, it's the more practical perks that count, real-estate professionals say.
"Serious buyers are looking for a place to buy a home, not a trip to Tahiti," Moreover, lenders are leery of gimmicky incentives, fearing that they're built into the price of the home and that loan dollars are being used to pay for that tropical trip, he adds.
Instead, effective incentives address what's on the minds of potential buyers -- the overall cost of the home and the monthly payments they'll have to manage, he says.
Help in bringing down the interest rate of the mortgage by paying points, for example, can give one home an advantage over another, And contributions to the down payment and closing costs could especially be of help to a first-time home buyer Incentives can be considered when the home is first listed, as a way to distinguish it from the start.
They can also be added when the home hasn't sold in two or three months, as a way of enticing a buyer without lowering the price. Or the incentives could arise in negotiations, when a buyer needs that one extra little nudge to commit.
Make no mistake; the location and condition of a home are going to be its main selling points. But if sellers "put on their buyer's cap" and really consider what issues the buyer might have, it could make all the difference.
Sellers need to look at the bottom line and put themselves in the buyers shoes it will them obtain a better view of what the buyer maybe looking for. A seller should figure how low he or she is willing to go, factoring in both the selling price and all other incentives used to get a buyer to commit.
But also be aware that all seller concessions need to be disclosed. "Everything should be in writing and attached to the contract. When someone says, "let's not tell anybody" about an incentive, that an easy way to end up in court.
In addition, buyers and sellers need to make sure that they don't exceed the lender's allowable seller-paid assistance.
Below are six of the most common incentives being used in markets today:
- Reducing the Price
- Paying Point
- Down Payment Aid
- Closing Cost Contribution or Help
- Adding a Warranty
- The Little Thinks
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