Sacramento 4 Less Realty
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Incentives to Homebuyers

Home sellers looking for ways to attract buyer attention -- or at least keep interested buyers on the hook -- may throw in a few "extras." Particularly if the real estate market is a bit sluggish in your area, you may see listings advertising televisions, all-expenses-paid cruise vacations, or motor scooters.

The bottom line is that your selling price is what buyers care most about. They may be pulling together every last dollar in savings to buy your house -- the cruise vacations can wait. So focus first on setting your price at a reasonable level that will bring in buyers.

But once you've got an interested buyer, keeping that person interested can make all the difference in seeing the deal to a successful closing. (Putting your house back on the market is expensive and no fun, whether the market is hot or cold.) Two of the most realistic way to help keep buyers on the hook include:

  • offering to pay some closing costs, and
  • offering to leave some home furnishings that you'd normally take with you.

We'll give an overview of each below.

Paying Buyer's Closing Costs

The last thing you want is for your buyer to get panicky looking at all the tangential expenses that come with homebuying, such as inspection fees, escrow fees, and moving costs. To sweeten the deal, you can offer to defray some of the following:

  • Title insurance and title search fees. Whether the buyer or seller pays these fees is typically a matter of local custom. If the buyer normally pays, you can usually cover these costs for around 0.5% to 1% of your house's purchase price. If it's been only a few years since you bought, ask whether this fee can be reduced by updating your original search.
  • Escrow fees. The escrow agent's services usually cost several hundred dollars, though escrow companies will charge more for additional services like preparing the title report (which they're responsible for in some states).
  • Inspection fees. Inspection fees usually run around $300 to 400, providing nothing unusual is needed. (But the buyer still gets to choose the inspector.)
  • Homeowners' insurance. At closing, the buyer will be expected to prepay the homeowners' insurance premium, usually a full year's worth. If you offer to pitch in, expect this to cost somewhere from $500 to $1,300.
  • Home warranty. Home warranties -- which are basically service contracts, providing for repair and replacement of mechanical systems and attached appliances such as the furnace and plumbing -- are entirely optional and cost around $300 to $900 per year, depending on the house. It's traditional in many states for the seller to foot this bill anyway.
  • Property taxes. Like homeowners' insurance, several months' worth of property taxes must usually be prepaid at closing. Taxes tend to make people grumpy, so the buyer would no doubt be delighted to unload this charge onto you. It will probably be at least several hundred dollars -- depending on the assessed value of the property and its location.
  • PMI. If the buyer is putting down less than 20% of the purchase price, the lender is likely going to require private mortgage insurance, or PMI. The cost of PMI is tied to the amount of the loan and the down payment -- a 15% down payment will require less for PMI than a mere 5% down payment, for example. The buyer will usually have to prepay up to one year's worth of PMI in an impound account, usually at a cost of several hundred dollars -- so if you can come up with that amount, you'll make the buyer happy.
  • Mortgage payments. You may offer to make the buyer's first mortgage payment, to ease the cost of transitioning into the new home.
  • Moving expenses.While not part of traditional closing costs, all buyers have some costs associated with moving. You can help defray expenses and stress by offering to hire a moving company.

Offering Personal Goods That Go With the House

Your house itself offers an opportunity for some real incentives. As you may know, fixtures -- those parts of the property that are affixed to the property and can't be easily removed -- must be included in the sale. Anything that isn't a fixture is yours, however. That means you can take it with you when you leave.

Or not. You may have purchased furniture or other items that specially suit the house you're in: perhaps a Mission-style dining table that blends perfectly in your Craftsman-style bungalow, an energy-efficient stackable washer/dryer that fits perfectly in a designated spot, a patio set that blends with your landscaped yard, gardening equipment, or exercise machines are already assembled and ready to use in the basement rec room. A prospective buyer who sees these items may be impressed, and offering them as part of the package could seal the deal

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