Good price VS Incentives?!

Sonja - I had been working with an entry level buyer for several months.  The price range we were looking in, was providing only the dregs of the REPO market.  The banks were selling "as is" without any disclosures or warranties.  There would often be multiple offers, and absolutely no incentives.

THEN - I heard about an area of new delightfully designed town homes, where the builder was offering a considerable amount of incentives to buyers - and also a selling bonus to buyer agent on top of a regular commission.

My buyer thought she had died and gone to heaven with the incentives.  She also got to choose her colors, have new construction, and a new home warranty.

I kept waiting for the shoe to drop on my commission - but it never happened.  Yes, those incentives can work - but everything else needs to be in place first.  It needs to be a good home, in good condition, in a reasonably good location.  

Incentives in the resale market work best when the buyer, who is likely cash strapped, can be helped with costs.  Toys don't usually matter as much to that type of buyer.

Our feeling is that is the basic good price of the home that gets a buyer's attention. If someone needs a home they do not necessarily need a car or a boat.

Agreed with Myrl above if it is new construction incentives from the builder to the buyer can work. Now to offer the pool table or tv... I'd say better to price the home right. ~Rita

I think incentives can work, but not some of the silly one's you referenced above. I don't see how in the world some of those things could even be legal really. I agree on the new construction one's from Myrl especially. Great post!

Sonja - Yes, the new home was priced to sell, and was in a very convenient location for the buyer.  The difference for this buyer, was that we had been looking at single family homes.  But when we totally exhausted that market of dilapidated properties needing a great deal of work, the buyer altered their expectations to the new townhome.

It worked out really well!

Good price is still better then insentives. It is about the bottom line

Sonja, I'm one of those agents that don't believe incentives work.  (At least not in my market area).  The pricing is key, then location, then condition.

Without key pricing a home won't sell, no matter what the incentive is to the buyer and/or the agent.

Nice post Sonja, well thought out and articulated.

Sonja,

I believe that it will be the price that is going to sell the property first and foremost.