What you should know before selling your home
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Offering incentives
A little-known tactic useful for quickly selling your home at a higher price is to offer a higher commission for the sale. You may be asking yourself how paying more can actually net you more, but it's really a rather simple concept.
By raising the commission, you might consider that a 1% loss. But that same 1% loss for you is a 14% gain to any agent that sells your home. Remember that many other agents may be bringing buyers to consider your home; this is how you can appeal to those agents. Put yourself in their shoes just for a moment and pretend that you have selected three homes that could potentially work for your buyer; one is offering an average commission for your area while another is offering 1% less in commission—which translates into a 14% loss of pay. But the third home is offering a fantastic incentive: a 1% bonus on the commission which means a 14% raise for the agent.
What would you do for a 14% hike in your paycheck? The more offers you receive, the higher price you get for your home, and the quicker it sells. Keep in mind also that costs you incur while selling your home are tax-deductible, including the marketing fee. Be sure to see your accountant for advice.
Allowances for buyers
Another way to make your home more appealing is to offer allowances for the buyers. This could range from appliances to clever financing, but it will be up to you to be creative and know what is within your boundaries. Some suggestions include:
- Kitchen Remodeling Allowance: Consider offering an allowance for remodeling the kitchen, in which case you would leave professional designs of what your kitchen could look like. Not only are you offering a new kitchen, you are allowing the buyer to mentally move into your property and customize their own kitchen. This is the biggest appeal of building your own home—custom designing it to your preferences. The response will surprise you!
- New Carpet Allowance: One commonly used incentive is the new carpet allowance. By offering to credit the new buyers with the price of a new carpet, you do several things. You save yourself the hassle of having carpet-layers in, you avoid the possibility of staining the new carpet by your family or during showings, and you allow the buyers to customize their new home by selecting their own carpet. You will often find that buyers choose to keep the existing carpet and use the allowance for furniture or miscellaneous items. Either way, you have lured them into choosing your home over the competition.
- Property Tax Allowance: Consider paying your buyer's first year of property taxes, homeowner's insurance, or even making their first three mortgage payments. Buyers get excited when they get freebies or bonuses. Imagine buying a house and not having to make a payment for the next four months or knowing that your first year's property taxes are paid. This incentive may put your home well above the competition.
- Offer to Pay Loan Points: Another incentive you could offer is buying down the buyer's interest rate by paying discount points on their loan. This will lower the buyer's interest rate as well as open the doors to a bigger pool of buyers since those from a lower price range may now qualify to purchase your home.
- New Appliance Allowance: You could offer to buy new appliances for the buyers like a new computerized washer and dryer set, an instant water heater, or a talking refrigerator. Have the brochures out during showings and included in all advertising. Buyers commonly pass up another home simply because you offered something they wanted but would never actually buy for themselves. All you are looking for is an edge.
