3 Concessions Sellers Can Make In A Weak Market
As the real estate market in vibrant urban communities such as Portland, Seattle, and San Francisco continue to heat up, home sales nonetheless continue to languish in many other parts of the country. If you live in an area where stagnant population growth results in a relatively weak real estate market, you may be wondering what your options are concerning making your property more attractive to prospective buyers. Making sure the place is in tip-top shape with maximum curb appeal sometimes isn't enough -- sellers sometimes have to offer certain concessions to sweeten the deal. Following are three possible concession options that may help your home move more quickly in today's tricky real estate market.
Covering Closing Costs
Closing costs in modern home sales involve at least four figures, and buyers are increasingly writing five figure checks to cover this expense. The reason why closing cost concessions are attractive to today's buyers is that post-recession lenders have returned to requiring buyers to have at least the minimum down payment, and this leaves some short on cash for closing costs and other incidentals involved in purchasing a home. Among today's lenders, only VA and FHA will figure in closing costs as a part of the home loan, so it's understandable why buyers and their agents may angle for this to be included by the seller as a part of the deal. However, it's not wise to automatically concede to this request without some negotiation on your part. Many sellers are able to work it out with buyers so that they only pay a percentage of the final closing costs, rather than the whole thing.
Offering Price Reductions Instead of Making Improvements
Many homeowners put substantial amounts of money into fixing up their homes prior to listing them for sale, but this has the potential to backfire in a weak market. Although household fixtures such as furnaces and plumbing should all be in good working order, consider offering a lower price instead of springing for that kitchen remodeling job. Instead of having carpeting replaced, knocking off the amount it would cost allows buyers to make flooring choices that reflect their own personal needs and preferences, and many people find this to be a very attractive option.
Carrying the Contract
The ultimate seller concession in carrying the contract yourself. The pros of this approach are that the market potentially widens considerably when you are willing to provide prospective buyers with a lease option contract because these deals give those who would can't qualify for a traditional loan the chance to purchase property. However, this does not mean that you are obligated to sell your home to someone with bad credit -- you're legally allowed to set the bar as high as you want as long as your standards are applied equally to all interested buyers regardless of race, gender, or religious affiliation. It is sometimes possible to find applicants with stellar credit but who nonetheless haven't been able to scrape up a down payment, for instance. Also, there may be others with a small blotch or two on their credit reports but who nonetheless might be good options. If you decide to go this route, you should work with a real estate agent who specializes in this type of transaction. It's much more complicated than simply renting out your home, and the assistance of an experienced professional will make the process go more smoothly for everyone involved.
Please feel free to reach out to your local real estate professional at your earliest convenience to find out more about concessions you can make that will help make your home more attractive to potential homebuyers.