What are incentives when selling a house. In this week’s article, I will go over what are incentives and a few examples of incentives a seller can offer a possible buyer.
What are incentives when selling a house?
In this week’s article, I will go over why offering seller incentives to help buyers looking to buy your house.
Incentives can be anything from adding the refrigeration or washer and dryer to the sale, to helping the buyer with their down payment.
Why offer Incentives When Selling A house.
The seller can offer incentives to a possible buyer to help the buyer qualify for a mortgage to help them decide on buying your house.
If the buyer is going to finance their purchase, then any incentive the seller offers maybe limited by what their lender will allow.
In most mortgage loan programs, the seller can not give the buyer the down payment, but the seller can pay for the closing cost or part of the closing.
What most mortgage loans where the down payment put down less than 20%, the lender will either charge the buyer PMI (Private Mortgage Insurance) for conforming loans or MI (Mortgage) on a number of government back loans.
This is a fee the buyer will pay the lender to insurance the loan, in case the buyer defaults.
There will be an upfront fee to the buyer and increase in their monthly payments for all FHA Loans under 20% down.
Also with FHA, the cost for MI, at this time, will never go away until the loan is paid off or refinanced.
In a conforming loan, the cost will usually be removed once the equity in the property is at 20% or higher.
For example, a seller could help a buyer by carrying back a note for the buyer to make up the different, so the lender is only financing an 80% loan.
By doing so, the buyer’s payment for the mortgage per month will be less and as well as saving the buyer that upfront cost.
This may also help the buyer quality for the loan.
The seller could offer to leave a few items with the house, like the washer and dryer, a refrigerator, furniture etc.
Here are a few other examples of incentives a seller could offer
A seller, could finance the loan or rent the house to a buyer with the option to buy the property in a future.
A seller could rent the house to a buyer, giving the buyer first right of refusal when the seller wants or need to sell at a later date
As a seller of a house, the seller could offer a number of different incentives or a combination of incentives to a buyer, depending on what the seller and buyer agree to.
In a seller market, there are very few reasons to give incentives to buyers
When the housing market changes to a buyer’s market, a seller will what to know what they can do to get a buyer into the house they are selling.
Call (909) 226-3551 to set an appointment
When buying or selling a house, you need to know what you are agreeing to and what you are signing.
Steve Olmos
Selling real estate in Southern California since 1980
Real estate is my business and our clients by using our services keep us in business
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