Let's say that a seller has had their home listed for $440,000 and although the comps support their price, the property has been sitting on the market for 120 days with no offers. Sound familiar?
As we all know, there is a huge pool of buyers who have capped their search at $400,000 that view this property as "out of reach". Instead of looking at this "standard sale", they are all looking at foreclosure properties hoping that can outrun the other buyers to the next foreclosure in their price range.
Here's the strategy. The seller of the $440,000 property, instead of reducing his price, offers to pay 3% of the purchase price to pay down the buyer's rate by 1%. (The cost will vary, but just focus on the strategy)
It's almost hard to imagine without seeing the math, but this house is now within the budget range of all of those $400,000 buyers. Plus, if this is the only seller actively advertising this incentive, his property now becomes the "gem" that all the buyers are competing for.
| Current Price | With Seller's Incentive | |
| Purchase Price | $ 400,000 | $ 440,000 |
| Down Payment - 3.5% | $ 14,000 | $ 15,400 |
| Loan | $ 386,000 | $ 424,600 |
| Rate | 5% | 4% |
| Payment | $ 2,072 | $ 2,027 |
It's time to get out of the box and start thinking about budget, not price.
Buyer's Strategy: Not many sellers have considered this option. It's time to meet with your Realtor and loan professionals to put together a tight package to present to sellers and their agents that can get you into your dream home within your budget.
Selling a home in today's market requires more than a sign in the yard and MLS entry.
Buyer a home in today's market takes more than a tank of gas and master key.
Nancy Moeller, CPA, Broker Associate
Seven Gables Real Estate
Direct Anytime: 714 276-7006
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