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Thursday, September 22, 2011

Incentives can work great when selling your house....

Some call them incentives, others call them gimmicks.  Some are more creative while most are the usual.  In a competitive real estate market sellers are resorting to all sorts of tactics to get lookers and hopefully buyers.

Take the couple in Glenview IL who are offering a $1,000 bar tab at the bar across the street as an incentive.  Will that work?  Who knows but it has garnered them increased publicity!

Some of the more traditional incentives I have seen include:
  • Seller contribution to closing costs.  Depending on the type of loan the amount may be restricted.  With FHA loans I believe the limit is still 6% but check with your lender when you get pre-approved for your mortgage. Fannie Mae and Freddie Mac have limits as well (3%). 
  • Home Warranty.   Not a substantial cost to sellers but does offer some reassurance to a buyer.   I believe a home warranty should be offered with every re-sale. [List your Viera house with me and I will provide your buyer a free home warranty.] 
  • Pay points.  A point is 1% of the loan amount charged as prepaid interest.  Check with your tax expert but I think seller paid points are still deductible. [Disclaimer: I am not a CPA, tax expert or financial planner nor do I play one on TV.] 
  • Leave a little something behind.  Throw in that big ole flat screen TV.  Throw in the washer and dryer.  Yep, that is right.  I have seen some deals where the TV or washer/dryer was the clincher!
But the ultimate and most effective incentive is a price reduction.   Of course, if the property has been priced appropriately to the market, there will likely be less need for a reduction when the offer arrives. 

Finally, a word of caution about incentives…. incentives will still not overcome an overpriced property that must still pass the appraisal process!  

About two years ago I wrote "Gimmicks Sell Houses."   Some do.

Call me when you are ready to sell your Viera, Suntree or Rockledge, Florida home.

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