For the last several years, the housing market in the United States has remained red hot just about everywhere in the country. For homeowners, that's been fantastic news, with home values rising by double-digit percentages in certain places. At the same time, however, buyers had been feeling the pinch with wage growth failing to keep pace with the skyrocketing property values. Something had to give.
Now, it appears that the US housing market is beginning to cool off for the first time in a decade, putting buyers into the driver's seat at long last. For current homeowners, that means it's going to start getting more difficult to sell their homes if they choose to do so. To stay ahead of a market that's rapidly shifting in favor of buyers, sellers are going to have to start considering incentives to prevent their homes from languishing on the market for longer than they're prepared to wait. Here are three of the most effective seller's incentives they can offer.
Since home values still outpace wage supports in most places in the US, some of the weakness in the market is due to an inability of buyers to afford a home. Even when they explore the market, it's common for buyers to have their finances stretched thin to make a competitive offer. One of the ways that sellers can lure buyers is to help them to lower the monthly costs that will be associated with buying the home. This is best accomplished by offering to pay points on the buyer's mortgage, which will lower their monthly payments for the life of the loan. For the seller, it can cost less than what they would have to lower their asking price by to secure a sale, and buyers will benefit far more than they would have with a small decrease in price. It's a real win-win in a slowing market.
Any homeowner can tell you that the true cost of a home goes well beyond property taxes and mortgage payments. It also extends to all of the upkeep and day-to-day costs associated with keeping the property in good shape. That's what makes offering a home warranty such an attractive perk for prospective buyers. Home warranty companies now offer packages that meet almost any circumstance and substantially lower the risk of unexpected costs for the buyer after the sale arising from things like appliance breakdowns, plumbing problems, and HVAC issues. It's no wonder, then, that homes that come with a warranty sell faster and for more money than comparable homes without them.
As previously noted, many potential homebuyers in today's market come to the table with financial resources stretched pretty thin. If they're considering making an offer on a property, they'll also need to consider all of the costs that will be associated with the purchase, aside from the cost of the home itself. Closing costs, which can range from two to five percent of the purchase price of the home, may force buyers to lower their available down payment and cause them to decide against making an offer on a property. That's why it makes sense for sellers to cover closing costs, either in part or in full, as an incentive to buyers. Doing so can mean the difference between a sure sale and a wavering buyer, and is well worth the cost to the seller.
Now that the US housing market is showing the unmistakable signs of a slowdown, it's up to potential sellers to start making important decisions about what they're willing to do to complete a sale. The incentives listed here are all excellent ways to incentivize potential buyers, and none of them should break the bank. Of course, it's still possible for sellers to hold their ground and wait for an offer that gives them everything they want, but with headwinds growing, it's not advisable. The bottom line is, sacrificing a fraction of the value of a home through these incentives can guarantee it moves smoothly in a tough market, and only those willing to wait out a downturn should avoid doing so. Otherwise, sellers should get comfortable waiting because they could find themselves doing just that in short order.