Yesterday while searching though MLS, I came across a listing where the seller is offering one year of electric bills paid for the buyer. Now, incentives are not an unusual perk in our Austin market, and I‘ve seen some pretty creative enticements. Still, this one got me to thinking about incentives and asking myself, just how effective are they? Speaking from my own experiences, I would have to say they aren't necessarily the driving force behind what buyers are looking for in a home.
I've had a variety of incentives over the years with listings, but I honestly can't say that any of them were the basis for the sale. Last year I listed a $263,000 home and after 90 days on the market, the seller proposed offering a 2008 Toyota Corolla into the deal. That's a generous chunk of change when you think about it. So, I revised my marketing campaign to include the flashy new car and the results were less than successful. The home was priced right and it was staged to show, but the incentive still did not get to the heart of what's on the minds of potential buyers -- meeting their home criteria and the overall cost of the home with the monthly payments they'll be making
Pricing is the prime motive for buyers and offering an incentive upfront with a higher sales price as a cushion can sometimes land of deaf ears. I don't want my sellers to take that risk so it's important for me to help them understand the potential consequences. In our Austin market, it is not uncommon for buyers to take the initiative when making the initial offer by asking for what is important to them -- price being the biggest consideration and then incentives such as seller paid close costs assistance.
Make no mistake, condition is also going to be at the top of the buyers list. I've shown many a homes with expensive and appealing incentives in place yet the condition of the home was a complete turn off for the buyer. I can't help but to wonder what might the seller (or their agent) be thinking. Why not have use those same incentive dollars on painting the walls, replacing the carpet, changing out the formica countertops with granite or updating where needed? Doesn't this make more sense? Like the old adage goes-- most first impressions can make or break a deal.
With all this said, I don't see incentives going away any time soon. National wide, most private sellers will try anything to sell their home, and new homes builders seem to be steering the incentive market along. Statistics show over 75% of builders and developers have some sort of buyer incentive program in place and going strong.
Thanks for taking the time to read my blog. I'd be interested in getting feedback.
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