By Gary Lanham | Collaborating columnist
It’s getting cold in the Sunshine State. Contract home buyers are shy, and Florida had four of the nation’s top 10 markets with the highest cancellation rates over the past three months, according to CNBC.
Rising interest rates, still high home prices and uncertainty surrounding the economy are making buyers think twice before signing the contract or closing the deal. Still, in Fort Lauderdale, including Wilton Manors, Oakland Park and Pompano Beach, registrations have increased. If you’re selling a house, what creative incentives can you offer to improve your chances of a sale?
Consider the 2-1 buyout. This seller incentive can help reduce the interest rate in the first two years, with the seller agreeing to “pay points”, or award the buyer a certain number of percentage points of the selling price, which, in turn, will be paid to the buyer. lender as discount points that lower the buyer’s interest rate. The rates revert to the contractual rate for the third year and for the term of the loan. If they sell the house, any purchase balance reduces the principal; it’s not lost as if the mortgagee pays points to reduce the rate permanently. This incentive decreases the pressure buyers feel to guess the right day to lock in their interest rate [a common source of serious stress among buyers] and sends the message that if they buy your home, they’ll automatically beat the market rate. Points paid by the seller are generally tax deductible for the buyer.
Closing cost credit. Many buyers trying to break into the market when prices are low are already scratching the bottom of their savings account barrels to find their down payment. With most home loans, the buyer will need 3-6% of the loan amount, in cash, in addition to their down payment, to cover closing costs such as loan fees, escrow services, and lending. title or mortgage insurance. Some sellers [and their agents] Include in their home’s ad and marketing materials the offer to pay a credit of 3% to 6% of the selling price of the home at closing to cover the buyer’s closing costs.
Turn requested repairs into improvements. Showing air conditioner or roof repairs as upgrades or offering a home warranty or applying an allowance for these repairs at the closing will build buyer confidence and help convince their lender.
HOA dues credit. If you are selling a home in a homeowners association [HOA] who charges monthly or yearly dues, paying them for six to 12 months or more can help cover significant costs for the buyer. Discuss with your agent how to do this in such a way as to attract the maximum number of buyers, but without violating any seller credit guidelines imposed by the buyer’s lender.
Then find a real estate agent who is as enthusiastic as you are. Will they offer perks like lunches and cash gifts from a drawing with business cards of open day attendees; partner with another brokerage that has a listing nearby or in the same neighborhood – and perhaps split the expenses by a house offering cash gifts to attend; or get in touch with real estate agents who have had recent sales in the neighborhood to draw their attention to the house? Will they change the MLS entry data, or allow any broker to advertise their listing, or increase the buyer’s agent commission from 3% to 4%? These incentives can build an audience for any brokerage where you can assure those agents that you have a property that can compete effectively.
If you’re eager to sell your home, the right incentives from you and your agent can prove you’re serious and convince your buyer.
Click here for Part I.
As the Gary Lanham Group Team Leader at Coldwell Banker Real Estate Fort Lauderdale Beach Office, Gary is a seasoned listing agent skilled in the most complex transactions. He knows how to get sellers the most money in the shortest time, even in this changing market. Reach him at instagram.com/garylanhamgroup or call 954-695-6518. Gary Lanham is an announcer for New Pelican.