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Some home sales need extra incentives to get buyers off the fence. Below you will find a sample of the possible incentives that might entice a buyer to make an offer. Which incentives, if any, are appropriate depend on your market, your home, and the prospective buyers that you are marketing to.
Most home sales will include the cook top, oven, and dishwasher, but the refrigerator, washer, and dryer are typically not included. Offering these appliances to potential buyers is a nice incentive especially for first-time home buyers that are looking for a move-in ready home. You can sweeten the pot even more by offering all new appliances if the existing ones are old.
An allowance is a credit given to the buyer to compensate for defects or worn out finishes. Some common ones include carpet, landscaping, kitchen, and roof. Allowances are a great incentive to get buyers to look past defects especially when you don’t have the cash to improve them.
Along with the down payment, closing costs are the additional funds that a buyer needs to bring to closing to cover the cost of getting their loan. Offering to pay for a portion of the closing costs can be attractive to buyers that are trying to limit their out of pocket expenses for their home purchase. It is a good idea to put a cap or state an actual dollar amount on this incentive.
An interest discount point is equal to 1% of the buyer’s loan amount. The lower interest rate will reduce the buyer’s monthly payment and total payments over the life of the loan. This can be attractive to buyers that are trying to stay within a monthly payment budget. On larger loan amounts, the lower rate can have a decent impact.
Almost all home buyers will have a complete home inspection done during their option period. The cost can vary from $500 to $1,000. The buyer typically pays for this but sellers can offer a credit and a repair allowance to address any items found in the inspection.
Offering upgrades is similar to offering allowances. The money is tagged for improvements. The big difference is that this incentive is offered as work to be completed by the seller before closing. This can be a nice bonus for buyers who don’t have the money or time to do improvements after closing and prior to move-in. The most common upgrades are flooring, kitchen counter tops, and appliances.
After closing on a home there are a lot of things that new home owners have to coordinate. Pre-paid services like house cleaning and landscaping can be a nice incentive to reduce some the action items that home buyers need to setup.
