Seller incentives when selling a house, and why a seller would what to offer them.

A few weeks ago, I said I would go over several questions, 1. What is the condition of the property? 2. How long will it be on the market? 3. What improvements should be made to the property? 4. What are the estimated closing costs? 5. What kind of title insurance is included? 6. Are there any liens or assessments that need to be paid off before closing? 7. Are there any special financing options available? 8. What type of inspection should be conducted? 9. Is the seller offering any incentives in order to facilitate the sale? 10. What types of repairs need to be completed prior to closing?

In the last few articles, I went over a general overview of financing available to buyers looking to buy a house, what repairs will be needed for what type of loan and over the question whether you can sell a house ‘as-is’.

In this week’s article, I will go over what are seller incentives, and now they can help a buyer looking to buy your house.

Seller incentive by be anything from adding the washer, dry or refrigerator, to helping the buyer with their down payment.

Seller Incentives When Selling A Property

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 loans’ programs, you cannot give the buyer the down payment, but the seller can pay for the closing cost or part of the closing fees.

With loans, when the down payment is less than 20% down, the lender will either charge the buyer PMI for conforming loans or MI on a number of government backed loans, which is a fee the buyer will pay the lender to insurance the loan in case the buyer defaults on the loan and the lender has to foreclosure on the house.

This will be an upfront cost for FHA loans and for both FHA and Conforming loans will increase the monthly payment for the insurance, which will be a percentage of the loan.

I went over this a little in my last article.

With FHA, the cost for MI, at this time, will never be released until the loan is paid off.

In a conforming loan, the cost will be removed once the equity in the property is at 20% or higher.

By the Seller helping the buyer carrying back a note for the buyer which make up the difference, so the lender is only financing an 80% loan for the buyer cost for the mortgage per month will be less and save the buyer that upfront cost.

This may also help the buyer quality for the loan.

As a seller you could finance the loan or rent the house to a buyer with the option to buy the property in a number of years or rent the property to a buyer giving the buyer first right of refusal.

As a seller of a property, you can offer a number of different incentives or a combination of incentives to a buyer, depending on what you need from the sale and what the buyer lender will a law.

In a seller market, there is very little reason to give incentives, but when the housing market changes to a buyer’s market, a seller will want to know what they can do to get a buyer into the house they are selling.

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

Steve Olmos: www.lookingrealestate.com/contact information
Homequest real estate

Diana Olmos: www.mortgagemarketingmentor.com
Statewide Funding Inc