After the $8,000 homebuyer tax credit expired in April this year, pending sales of existing properties fell 30% in May according to the National Association of Realtors (NAR). If you are a current seller in this market, you may already feel the severe effects of the end of the federal tax credit.
If you want to sell your home, there are a number of incentives you can offer to homebuyers in lieu of the homebuyer tax credit.
Lower your price. This seems obvious, but to really make it count, you may have to price your home low from the beginning to get multiple offers. Buyers are much more aware of the economy than they ever have been, and often, a lower price is much more appealing than any free perk. Also, buyers have access to an unlimited amount of data, and they will know if your home is priced too high.
Pay closing costs. Offer to pay a portion of the buyer’s closing costs. Under the FHA mortgage program, sellers can provide credits up to 3% of the sale price (previously 6% but was changed to 3% in April 2010) to off-set closing costs. Sellers cannot, however, directly pay any portion of the buyer’s down payment.
Update the interior. Offer to install new carpet, use a fresh coat of paint, and replace light fixtures. Include appliances. Many new homeowners don’t own a refrigerator, stove, dishwasher or microwave. Including appliances that are already in the home is very enticing to many homebuyers.
Another option for sellers is to hold off . Depending on your situation this may be the right option.
Most importantly, be patient. Statistics show that on average, it takes 21 showings to sell a home. However, offering incentives in lieu of the homebuyer tax credit, which caused a surge in home purchases over the past 18 months, is one way to help you sell your home faster.
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