Posted on: 30 January 2017
Your local real estate market has ups and down, with it favoring the buyer and seller at times based on inventory and demand. If you find yourself trying to sell at a time when the buyer has the advantage, you may be looking for ways that you can make your home stand out from all the others. Here are some buyer incentives you can offer that will attract the buyer that you are looking for.
Buy Down the New Mortgage
Even though falling mortgage rates are making mortgages more affordable, the typical buyer will still look for the best deal out their for a home mortgage. When the market is competitive for homes similar to your own home, you can give your home an advantage by making an offer to buy down the potential buyer's mortgage.
If you have never heard of a mortgage buy down, it's quite simple. You offer to work with your buyer's mortgage lender to lower their interest rate, which is done by paying the lender a fee. The process is commonly referred to buying points, and it is done at the closing on the home. By paying for the points at the time of the sale, the interest rate for the buyer is reduced. If the seller pays off the loan or refinances, then they lose those points and any potential interest savings.
For instance, you can offer to purchase points that could lower the buyer's mortgage from 4% to 3.75%. While it's only a .25% reduction in interest rate, it will translate to saving them a lot of money over the loan's lifespan. This can make your home look more appealing when compared to others.
You must negotiate this with the mortgage lender prior to the closing, since it may not be possible depending on the kind of loan they're using.
Offer a Home Warranty
A common concern for buyers is what happens when a major appliance breaks down right after they move into the home. You can offer to purchase a home warranty, which typically costs around $1,000 on average and gives the buyer peace of mind that major appliances that break in the first year will be fixed. If they do not want a home warranty, you can always offer to give them the cash value of the warranty as a credit at closing.
For more tips on how to give buyers incentives, speak with your agent.Share