Monday, September 14, 2009
A lot of people selling homes today are asking what they need to do to get their house sold. Immediately following the question comes the conversation of price.
Although I’m an advocate of effectively pricing your property as the initial important element to attract the eye of buyers, I argue that it’s not the only thing to consider. In a buyer’s market, getting creative with offers is a secondary step often overlooked by agents and sellers alike.
For instance, instead of simply dropping the price of your property to compete for prospective buyers, why not offer to contribute money towards closing costs? This money can be used to cover any interest rate buy-down points a lender might charge and holds a lot of buyer appeal when it comes to positively impacting their monthly mortgage payment. Overall, as a seller it will cost you less in the long run (than simply dropping the price by an arbitrary number) and the perceived value to buyers remains high.
A great example of this is illustrated with a property with a $300,000 sales price. A $10,000 price reduction has the same qualifying effect as buying the interest rate down ½ percent which will cost the seller $2,400 in discount points. This saves the seller $7,600! Win/ Win!