Should You Offer Homebuyer Incentives?

You want to sell your house on an urgent basis. You’re thinking of giving some incentives to prospective buyers so that they’re better inclined towards your home. You want to add a sweetener to the process in the form of a decorating allowance, a big-screen TV, or a home warranty.

This appears to be a smart marketing tactic per se. But sometimes homebuyer incentives can prove to be money wasted. You need to ensure you’re sending out the right signals to buyers with your homebuyer incentive in place.

Here are some dos and don’ts you need to follow if you don’t want a wasted effort:

Do’s:

Use incentives that will make your home stand out amongst others. If all the properties up for sale in the neighborhood have a similar patio, by equipping yours with a brand new luxury patio set with a shiny stainless steel BBQ, you stand a good chance of your home being picked over others.

Compensate for drawbacks by offering a homebuyer incentive. If you have ancient floral wallpaper in your living room, you could offer a decorating allowance which will cover your buyer’s cost of replacing it. If your furnace looks as if it’s on its last legs, offering a home warranty can allay your buyer’s concerns that they’ll have to spend thousands of dollars for replacing it in the near future.

Don’ts:

Don’t presume that it’s legal to offer homebuyer incentives. Some states may put a ban on homebuyer incentives. Sometimes laws can be maddeningly confusing regarding whether this practice is illegal or not. Confirm the way to go with both your attorney and real estate agent before you actually declare details of the homebuyer incentive you’re offering.

Don’t underestimate the smartness of buyers. There’s a strong probability that buyers will probe deeper to find out the motivation behind the homebuyer incentive you’re offering. Offering an incentive might make you appear desperate. Suspicious buyers might begin to wonder about the hidden flaws existing in your house that compelled you to throw in a freebie for making a sale. Your apparent anxiety could also result in buyers making a considerably lower offer.

Don’t mask an exorbitant price using a homebuyer incentive. If you offer a very high priced homebuyer incentive, something like a luxury car or a high-end TV; buyers might regard this as a gimmick for avoiding a reduction in the sale price. Almost all experienced real estate agents recommend listing homes at more competitive prices rather than offering homebuyer incentives.

The price of a property is what buyers look at first and foremost. If a house is priced even slightly below its real value, it attracts both buyers and buyers’ agents. The home will be considered a good pick and will be bought quickly.

The bottom line

If you’re sure that offering a homebuyer incentive is beneficial, make sure you choose one that’s a value addition or that neutralizes an existing flaw in your home.