The Five Best Home Buyer Incentives

Home Selling

One of the questions we get asked often these days is, “Should I offer some kind of incentive to get my house to sell faster?” While incentives are becoming more and more popular in the Tampa real estate market, they’re not always the best way to use your home marketing budget.

A far better way to attract buyers – not potential buyers, but actual buyers – is to invest your incentive money in making your home irresistible. As long as you know that your home is priced accurately for your neighborhood and the amenities it offers, then consider making improvements to your home instead of lowering your asking price or offering material incentives to buy. There are many improvements that you can make to your home for relatively low cost in comparison to the return on your investment. Here’s a list of five improvements that will cost about the same as or less than the most commonly offered home buyer incentives.

1. Give your kitchen a face lift.

Every year, the National Association of Realtors releases a list of high ROI home improvements – home improvements that are best reflected in the value of the house at sale time. Year after year, kitchen improvements top the list. A full kitchen makeover will run you between $10,000 and $20,000, but you don’t need to do a full makeover to make your home significantly more attractive to buyers. Here are some major changes that cost minor bucks:

Under $100
CLEAN. Scrub down the entire kitchen and make everything sparkle. Get rid of clutter, put away extra small appliances, take the pictures off the refrigerator. Touch up painted woodwork, replace the window curtains and invest in a bright, eye-catching centerpiece of fruit to place on the kitchen table or a countertop.

Under $500
Get rid of outdated kitchen wall treatments that make your kitchen feel old fashioned. New wallpaper or paint is an amazing face lift. Couple it with fresh new window treatments and replace your old kitchen set with a stylish new set (Hint: instead of buying, rent a top quality kitchen set from a local rental or home staging center to save money).

$1000+
Reface the kitchen cabinets and counters, or replace them entirely. Replace old appliances with new matching ones.

2. Spruce up your bathroom.

The bathroom is one of the most underappreciated rooms in the home – but it’s second only to the kitchen as a selling (or sticking) point. While you may not be in a position to add a full bath to your home, there are improvements you can make that will definitely make your home a more attractive proposition to buyers.

under $100
Give the bathroom a spruce-up. Clean thoroughly, replace old caulking, strip wallpaper and replace it with new wall treatments. You’d be amazed what a difference a good cleaning and a coat of paint can make. Finish it off with attractive towels, towel bars and matched accessories.

under $500
Replace the sink, cabinet and fittings to give your bathroom a completely different look. You can do the same with a new toilet, or reface your tub enclosure. Surprisingly, one of the most cost effective changes you can make in the bathroom is new lighting.

$1000+
A total bathroom facelift can make the bathroom a showplace. Buyers love amenities like luxurious tub enclosures, whirlpool tubs and separate shower facilities.

3. A whole house facelift goes a long way toward making a home attractive.

Buyers will be imagining themselves in your home. Give them a fresh palette for their imaginations to paint. Start with fresh, neutral paint on all the wall surfaces. If your home has architectural details like crown molding and woodwork, set it off and call attention to it with contrasting colors. Get rid of old carpeting and refinish wood floors, and replace worn and stained floors in all the rooms with something fresh and new.

Under $100
Declutter your entire house. Go through it with a fine tooth comb and get rid of all extra furniture, accessories and personal items. If you can only afford to repaint one room, make it the first room you see upon entering, whether that’s an entryway or your living room. Remember, first impressions are powerful.

Under $500
Repaint the walls throughout the living areas, and the master bath and bedroom. The more attractive the major living spaces are, the better the first impression your home will make on buyers.

4. Give the outdoors a makeover.

Curb appeal is one of the most often used words in the real estate lexicon for good reason. Many buyers will never even make it to the front door if the outside looks shabby and ill-cared for.

Under $100
Trim shrubs around paths, borders, windows and other areas of the house. Give the lawn a manicure. Put in a border of flowers along the walkway or front of the house, or ring a tree with a small flower garden. Rent a pressure washer and give the house a thorough cleaning.

Under $500
Spruce up woodwork and trim. Have gutters and shutters painted and/or replaced if necessary. Landscape the front or back yard. Spruce up the patio area. If you have a pool, make sure that it is spotlessly clean and sparkling and that the pool area is uncluttered.

$1000+
The single most valuable home improvement that you can make is new siding, according to the NAR. The second is new windows. Full landscaping will also make your home far more attractive to buyers from the outside – and can help make a difference on the inside when you take into account views through windows and light appeal.

5. If you do decide that you need to use an incentive, choose incentives that buyers appreciate.

In general, buyers are most likely to respond to incentives that add value to the home they’re buying, or that reduce their cost. Some of the more popular ones that you might consider are:

Pick up closing costs in return for a quicker sale. By paying the closing costs up front instead of letting them factor them into their mortgage, you’ll save them thousands of dollars in interest over the years to come. It’s a relatively low cost incentive for you that makes a very big difference for them.
Augment their down payment. One of the hardest parts for first time home buyers is coming up with a sufficient down payment to qualify them for the best mortgage rates. Contributing to the down payment amount is one of the most popular incentives being used to entice buyers because it makes it easier for new buyers to get into a home.
Paying points to reduce the monthly mortgage is another popular incentive. Buyers are looking at their bottom line these days. Paying for points on their loan will substantially reduce their monthly mortgage payments for a year or two – and that’s a very attractive incentive.

In general, the best use of your money is to make your home as attractive as possible to buyers. Incentives are most valuable when you have an interested buyer who just needs a little extra nudge to make a commitment.

Date: Wednesday, July, 25th 2007 @ 01:44:25 PM
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