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Dos and Don'ts of Homebuyer Incentives

Article From BuyAndSell.HouseLogic.com

By: G. M. Filisko Published: September 01, 2010

Homebuyer incentives can be smart marketing or a waste of money. Find out when and how to use them.

Selling a home can be a stressful process, even if you’re using the best real estate agents from the Ed Dale Team. However, including a homebuyer incentive might make the process run a little smoother but you need to be sure you’re sending the right message to buyers when you throw in a homebuyer incentive to encourage them to purchase your home. When you’re selling your home, the idea of adding a sweetener to the transaction-whether it’s a decorating allowance, a home warranty, or a big-screen TV-can be a smart use of marketing funds. To ensure it’s not a big waste, follow these dos and don’ts:

Do use homebuyer incentives to set your home apart from close competition. If all the sale properties in your neighborhood have the same patio, furnishing yours with luxury teak garden furniture and a stainless steel BBQ that stay with the buyers will make your home stand out.

Do compensate for flaws with a homebuyer incentive. If your kitchen sports outdated floral wallpaper, a $3,000 decorating allowance may help buyers cope. If your furnace is aging, a home warranty may remove the buyers’ concern that they’ll have to pay thousands of dollars to replace it right after the closing. Furthermore, if your furnace is in a particularly bad way, you might want to consider reaching out to a specialist heating company for advice regarding any potential repairs that can be carried out. To learn more, visit web site of an HVAC expert in your area.

Don’t assume homebuyer incentives are legal. Your state may ban homebuyer incentives, or its laws may be maddeningly confusing about when the practice is legal and not. Check with your real estate agent and attorney before you offer a homebuyer incentive. When it comes to the litigation of selling your home, you should take a good look at attorney bios to make sure you can find one that will advise you on all aspects of selling.

Don’t think buyers won’t see the motivation behind a homebuyer incentive. Offering a homebuyer incentive may make you seem desperate. That may lead suspicious buyers to wonder what hidden flaws exist in your home that would force you to throw a freebie at them to get it sold. It could also lead buyers to factor in your apparent anxiety and make a lowball offer.

Don’t use a homebuyer incentive to mask a too-high price. A buyer may think your expensive homebuyer incentive-like a high-end TV or a luxury car-is a gimmick to avoid lowering your sale price. Many top real estate agents will tell you to list your home at a more competitive price instead of offering a homebuyer incentive. A property that’s priced a hair below its true value will attract not only buyers but also buyers’ agents, who’ll be giddy to show their clients a home that’s a good value and will sell quickly.

If you’re convinced a homebuyer incentive will do the trick, choose one that adds value or neutralizes a flaw in your home. Addressing buyers’ concerns about your home will always be more effective than offering buyers an expensive toy.

More from HouseLogicSetting the right home price Using an appraisal to set your home price Choosing the right offer on your home

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G.M. Filisko is an attorney and award-winning writer who gritted her teeth and chose a huge price decrease over an incentive to sell a languishing property-and is glad she did. A regular contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

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