Selling a home when the real estate market is less active can be a daunting experience. Whether the problem is winter weather or an unexpected downturn in the market due to economic or other concerns, sellers who need to sell can face long market times and little buyer activity. If you have your home listed for sale and are being impacted by waning buyer interest because of a slow real estate market or the local economy, using one or more buyer incentives may help you overcome market issues and attract the qualified buyer you need.
Consider offering continued savings to a prospective buyer
While mortgage rates continue to be very affordable across the nation, buyers still want the best possible deal on any home they decide to purchase. If your market is highly competitive with pressure from several other available homes that are similar to yours in size, condition, and price, offering to buy down a prospective buyer's mortgage interest rate may help your home stand out from the crowd and capture a buyer's interest.
To do this, sellers can work with the prospective buyer's lender to pay an upfront fee, sometimes called a point or points, at closing for the buyer. This upfront payment offsets a small percentage of the interest rate on the buyer's future mortgage payments until the loan is paid off or refinanced.
For example, sellers might agree to pay one-quarter of one percent of a buyer's interest rate, effectively making a 3.25 percent mortgage interest rate into a 3.00 percent rate and saving the buyer thousands of dollars in interest costs over the life of the loan. Before offering this type of incentive, be sure to discuss it carefully with your real estate agent. In addition, remember that buying down the interest rate in this manner must be approved by the buyer's lender for the type of loan they are using.
Consider appealing to specific buyer needs or wants
Another way to offer an incentive that will help to attract buyers is to find out what a particular buyer needs or wants and then offering them a credit or other incentive at closing for that purpose. Some examples of this are:
- offering a credit for erecting a fence for buyers who have children or pets
- offering a credit for making landscaping changes or improvements that the buyer was hoping to find
- offering a credit for replacing appliances
- offering a credit for new flooring, paint or other cosmetic improvements
- offering a credit to assist with closing or moving expenses
To find out what an interested, but wavering buyer might like as an incentive, have your listing agent contact the buyer's agent to learn more about their situation. Your real estate professional can also offer additional suggestions for using buyer incentives more effectively in your area and market situation.