Deal or ….No Deal ?
July 24th, 2007 categories: Buying San Diego Real Estate, San Diego Real Estate, Selling San Diego Real Estate
Whatever is on the minds of real estate buyers these days, flashy perks are not getting their attention.
Serious Buyers are looking for a home, a place to live, not a trip to Mexican Riviera or a new plasma tv.
Effective incentives addresses the behind the scenes thinking of todays buyers. Costs associated with the purchase,the cost of the home, the property tax bite and what all this adds up to as a pay out each and every month.
Some incentives that interest Buyers today would be lowering the interest rate in a possible Seller-Buy down,contributing by the Seller in the down payment and assisting in the closing costs gets the most attention, especially from first time Buyers.
When we REALTORS are first taking the listing on the property is the best time to discuss this issue with the Seller. It would be best to include the seller assisted incentives when the property is first new on the market.
Making these adjustments after the property is on the market and the property has already been passed over with no offer may be too late to be considered by the savvy buyers today. Many Buyers have already moved on at that point and the Seller has lost their best advantage of being considered.
If the Agents would help the sellers step into the shoes of the buyers , especially in slow markets (no, they are not all slow) They would have a much better chance of attracting those qualified Buyers and being able to negotiate an offer.
If the Sellers agents are not doing that or at least trying, the Seller should be hiring one that understands the market better and knows how to market the property in a slow market.
In my view all listing should be cancel-able if the Seller becomes dissatisfied for any reason. All my listing contracts should come with a 100% guaranteed satisfaction clause.
I digress, the agents must help the seller understand that any one or more of these concessions may be essential to being able to sell in a slow market. Sellers may even get realize their desire for top dollar with the right incentives.
Incentives must to be in writing in the listing agreement. Agents and Sellers must also use care not to exceed the Lenders allowable Seller-Paid assistance.
The Top Incentives for Market Savvy Buyers would be:
- Lowering the price- Price should be in conformity with the Adjusted Comparable Values. Bring this price down as low as possible when first putting it on the market , not weeks or months later. It is too late then, you will chasing the market.
- Buying Down the Interest Rate-The Seller can offer to pay mortgage points for the Buyer. For each point ( 1% of the mortgage ) the Seller can buy down the interest rate by 1/8 of a percent. 2 Points = 1/4 % lower interest.
- Assist the Buyer with Pre-Paid Closing Costs. Typical Buyers costs range from a few thousand to many thousands of dollars. Sellers typically can contribute up to 6% of the purchase price ( check with your lender for specific guidance on the Seller contributions)
- If the Buyers are looking to buy a condominium, offering a year or two of pre-paid HOA fees will also attract a lot of attention.
DEAL or NO DEAL ?
Incentives rarely work unless you are dealing with a cash strapped buyer and then he wants his closing costs paid not a trip to Tahiti..
Sellers who offer new cars instead of market pricing will always be chasing the market. overpricing costs sellers far more then if they priced their homes correctly in the beginning..
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