When several comparable homes are competing for the same buyers, reducing the price isn’t the only way to improve your position. The right incentive may address a specific financial or logistical concern and make your property more competitive without unnecessarily giving away value. The question is which incentive, if any, gives you the greatest advantage.
- A home warranty is one possibility. Buyers aren’t evaluating only the purchase price; they’re also considering the expenses they could face after closing. A warranty may cover specified systems and appliances and reduce some of that uncertainty. According to Forbes, the national average cost of repairing or replacing heating and air conditioning systems is $8,000. Coverage varies considerably by plan, but for some buyers, having protection against certain repair costs can make a difference.
There may be a benefit for the seller as well. Some home warranty providers offer coverage during the listing period for certain systems and appliances. The exclusions, service fees, coverage limits, and cost of the plan will help determine whether that additional protection is worthwhile. Additional information is available here:
3 Sound Reasons Why You Should Offer a Home Warranty
Avoid Surprise Costly Repairs with a Home Warranty
- A seller concession may sometimes provide more benefit to a buyer than an equivalent reduction in price. The amount and type of concession will depend on the negotiated contract, applicable loan guidelines, and your priorities, but possibilities may include:
- A contribution toward allowable buyer closing costs or other approved transaction expenses.
- An agreed credit toward an identified repair or improvement. In other cases, completing a worthwhile repair before listing may do more to reduce buyer objections and improve the property’s competitive position.
- Flexibility with the closing or possession date can also have value without changing the price. One buyer may need an unusually fast closing while another may need additional time before taking possession. If your schedule allows some flexibility, that may distinguish your property from a comparable home that can’t accommodate the buyer’s timing. When appropriate, that flexibility can also be communicated through the MLS agent remarks.
- Under the right circumstances, seller financing or a lease-to-own arrangement may expand the potential buyer pool. These aren’t simple alternatives to traditional financing, however. They can involve significant legal, tax, financial, and default-risk considerations, and existing loan obligations may also affect what’s possible. If either approach appears appropriate, qualified legal and financial guidance can help determine whether the potential benefit justifies the additional complexity.
- Certain personal property may add perceived value for a particular buyer. Lawn equipment, recreational equipment, a pool table, or other unattached items associated with the property might make the overall purchase more appealing. These items generally don’t contribute to the real property’s appraised value, however, and they can affect the contract or financing if handled incorrectly. How they’re included and documented matters.
The value of an incentive depends on the problem it solves. A closing-cost contribution may matter to one buyer while timing flexibility may be far more valuable to another. That’s why the best approach is to look at the competition, current buyer behavior, financing considerations, and your own priorities before deciding whether an incentive makes sense. I can help you compare those options and determine whether there’s an opportunity to strengthen your position without giving away more than necessary.