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Old 04-18-2010, 06:43 PM   #21
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In many guess offering a rebate works better than lower the price. Typically, offering to pay closing cost, a credit for appliance or new roof or whatever is a strong incentive for cash poor buyers.

On the other hand in an equal number of case a lower price is better. For example on 250K house a 200K mortgage would be harder to qualify than 192K mortgage with a 8K credit it would also result in slightly higher fees and property taxes (at least in places like California).

So I think the simplest thing is to use a credit as part of the counter offer if the buyers need cash.
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Old 04-18-2010, 06:52 PM   #22
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Originally Posted by ziggy29 View Post
That's good. Frankly, if your primary motivation is to sell quickly and you have a lot of equity, the best thing to do is simply price it for quick sale (but not so low that potential buyers think something is wrong with it).

That's what we did when we sold our house in California. I already had the transfer to Texas lined up so we were pretty motivated to just get it sold, and had it under contract in 6 days. Of course, that was into a seller's market.
Last November we sold our other properties in the deepest part of the housing yucky ness. We priced the other property for quick sale, and what we got was incredibly low balling offers that were 20% below our quick sale price. We learned that we need to be able to have a good 15-20% leeway below our on the market price so that the buyer believes he's getting a deal when he low balls by 15%. The broker can play the games with them.

Actually we sold the property on Craigslist. The broker simply handled the transaction. We visited them and went over all the information about it how it was built, and did all her leg work for her. But she had shown it to many people before the one we found on Craigslist worked it.

I'm sure if we put it out for 20% below the price that the guy across the street got, we sell it in days. But we need more than that. We aren't that desperate. The problem is that if we offer it at 20% below the average local offered price and then they offer 10% below that its to low to do what we need.

Its all a game. If you price it too high you'll get no offers. If you price it too low, people will think something is wrong with it. Finding a savvy broker is not easy.

Z
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Old 04-18-2010, 11:56 PM   #23
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I have an agreement to sell my old house and the offer was they were going to pay X for the house, but I had to pay $7K to them for ANY kind of cost they found... so I was really getting X-7.... I said X-5 and we struck the deal..

Now, the only problem is will the house appraise for X... if it does... done deal... if it does not... then we have a problem...

The other thing you can do is have some money put into escrow for 'fixing' up the place... but loose enough terms that everybody knows they are getting the money.. This is what I did when I bought the house I am selling 25 years ago... I gave them a list of what was wrong (and believe me... anybody who inspects a house now can find a LOT... I was surprised how much they 'found' at my old house... made it seem like I had not put in a penny in 25 years... even though I fixed it up with hardi plank... put on a 40 year roof.. and recently redid a lot of the floors and stuff in the kitchen and baths...)...
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Old 04-19-2010, 12:23 PM   #24
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The bottom line for us is that its probably not an issue. If we offered the house for even 10% above what is the bottom line number we need, the neighbors would probably be angry since it would set a bad precedent for sales in the neighborhood. We have 100% equity. If we sold it on Craigslist, without a broker's commission of 6%, and didn't do any renovations that we still plan to do..... well there are trailers in local trailer parks that would cost more. We have almost a full acre with mature trees, and even a small pine forest at the bottom of the yard.

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Old 04-19-2010, 12:24 PM   #25
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We learned that we need to be able to have a good 15-20% leeway below our on the market price so that the buyer believes he's getting a deal when he low balls by 15%. The broker can play the games with them.
I don't know about 15-20%, but yeah -- I would never list at a price that was the absolute minimum I would take. Too many people think everything has to be negotiable and will not buy, no matter how good the price, unless they can haggle you down. I despise those games, but it is what it is, so I have to do as the Romans when I'm in Rome. Wishing people would just respond to an already pretty good deal with a firm, no-haggle price won't make it so. Some people would feel better about haggling a seller down from $200K to $190K than about paying $185K firm with no haggling. Silly.

In the example I gave, I actually accepted an offer $10,000 below my asking price; though our initial listing price was on the low side of the suggested range it wasn't the lowest we'd accept.

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If we offered the house for even 10% above what is the bottom line number we need, the neighbors would probably be angry since it would set a bad precedent for sales in the neighborhood.
Me? I'd be happy because I'd have some ammunition to challenge my property tax assessment.
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Old 04-19-2010, 12:56 PM   #26
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If you want to offer some sort of incentive to move the property quickly and differentiate it from other listings, you could:

1. Offer $x,000 in "buyer incentives"- every potential buyer will want something diffferent anyway. It could be a new fence, new appliances, new carpet, a deck, landscaping, whatever.
2. Offer to pay a higher RE comission if it is under contract and closed by "x" date. Maybe motivate the realtors, not the buyers.
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Old 04-19-2010, 01:27 PM   #27
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Some people would feel better about haggling a seller down from $200K to $190K than about paying $185K firm with no haggling. Silly.
.................................................. ..Me? I'd be happy because I'd have some ammunition to challenge my property tax assessment.
OH is that true. If offered it at $205K and was willing to take $180K, too many people would much prefer haggling me down to $185K than simply taking a fabulous deal at $180K And even more would refuse to deal if I offered it at $165K no broker involved(my lawyer instead) and nor more renovations. They'd rather pay more.

As to property taxes, the house is in a place that has the lowest taxes in the county. The local school district will be unaffected by the pension debacle since they have a huge amount of money they take in every year from land owned by big utilities. Tax wise its a real deal. the house I'm moving to will not be a deal tax wise, but I love there, and don't love where I'm living.

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Old 04-19-2010, 02:01 PM   #28
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The last cash kick-back I did was an Addendum to the purchase and sales aggreement which was not referenced any where in the P&S. Lawyers hate this stuff; banks will tell you it's fraudulent because you're allowing the buyer to over finance the purchase price and walk with cash.

The last closing I did had a $1600 surplus. The closing lawyer said he had no choice but to give it to me (the seller) since the buyer is unable to walk with financed cash not documented in the P&S. All the closing cost were financed ... she even got her $500 deposit back ... truely a "no money down" deal; but the surplus went to me.
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Old 04-19-2010, 06:33 PM   #29
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I think the psychology of offering something extra lures the buyer in . I sell on ebay . Certainly not like selling a house and I've sold a few but the psychology is the same . It was recently a slow selling period and all the sellers were complaining and lowering their prices . Instead I offered free shipping on very light items . Guess who's sales went through the roof ? This thread has made me consider throwing in my boat when I sell as an incentive .
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Old 04-19-2010, 09:01 PM   #30
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I think the psychology of offering something extra lures the buyer in . I sell on ebay . Certainly not like selling a house and I've sold a few but the psychology is the same . It was recently a slow selling period and all the sellers were complaining and lowering their prices . Instead I offered free shipping on very light items . Guess who's sales went through the roof ? This thread has made me consider throwing in my boat when I sell as an incentive .
What kinds of house incentives might you think of? My situation is probably not like that since I can actually lower the price to the point I should have real estate people lining up for themselves. But I have some resistance from my wife who wants to get as much as possible and doesn't mind waiting, while I want to get the hail out of Dodge and move on.

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Old 04-19-2010, 10:44 PM   #31
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What kinds of house incentives might you think of?
Z

I think in this market to get your price you have to go with the words of Gypsy Rose Lee and get a gimmick ( closing costs , several months mortgage payments , a trip to the Bahama's (perfect for the uppie buyers ) , new appliances , a renovation allowance ) Anything to entice the buyer in !
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Old 04-20-2010, 01:22 PM   #32
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I don't know about 15-20%, but yeah -- I would never list at a price that was the absolute minimum I would take. Too many people think everything has to be negotiable and will not buy, no matter how good the price, unless they can haggle you down. I despise those games, but it is what it is, so I have to do as the Romans when I'm in Rome. Wishing people would just respond to an already pretty good deal with a firm, no-haggle price won't make it so. Some people would feel better about haggling a seller down from $200K to $190K than about paying $185K firm with no haggling. Silly.



My BIL was selling his boat slip... and the guy asked how much he wanted for it.. he said $25K... which was a very very good price... the guy wanted him to come down on his price and he said "I did, I just didn't tell you my initial price was $28K".... The guy laughed and accepted the $25...
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