SELELRS: BEWARE OF BUYER INCENTIVES

The National Association of Realtors had an interesting article on offering incentives to buyers and/or selling agents. Their warning was to beware of the risks of oversweetening the deal. In some States sellers, especially builders, are putting a car in the garage or even giving away vacation cruises. Seems that buyers aren't easily fooled. They know that the reality is that the incentive is somehow included in the price and so they are paying for it. There ain't no free lunch!

The best incentive to selling a house is to price it fairly to that local market. The best incentive is thus, a price reduction. The buyer has to like the property first anyway and an incentive is just a nudge to have them move forward. If a home has some "issues" that the seller can not or will not fix, then an incentive sometimes work. For first time homebuyer homes, having the seller cover closing costs or throwing in all the appliances often work. Coming up with an extra $2500 for either may be the barrier to a young couple moving forward.

Incentives to agents is a "slippery slope" as the NAR article states. Some states do not allow it and even if it is legal, there are ethical issues. Personally, I would never advise a client to do that. I'd rather set up several agent tours and expose the home to as many agents as possible. On the other hand, we see that homes that are listed with "no service discount fee" brokers where 2.5% is paid to the selling agent do not get shown.

Bottom-line is that a home well priced at a fair market value will sell. In this market, it will take longer than it did in the last two years, but what sells is price, condition and fair marketing.