Mortgage Payment Is More Important Than Price…..Say What?
You have your home listed along with hundreds of others. What will it take to get a buyer? Reduce the list price? NO! Reduce the buyers monthly payments. But…….
A strategy to consider……help the buyer save money and you will sell your home. But…..
Be smart up front and plan a strategy when you list your home of offering the buyer a reduction in interest rates (buy down) instead of a reduction in your asking price.
What occurs with most offers to purchase from a buyer is a price approximately 5 to 10% (or more) less of your asking price. The initial reaction of sellers is to disregard the offer.
Rethink that strategy. Show the buyer that with you buying down his/her interest rate they save money. How can this occur?
Game plan on blackboard. Work with your realtor, banker or mortgage broker and put together a schedule showing the potential buyers the savings they achieve. What will they achieve?
First they will see that with the sellers (your) offer of a buy down of interest they will realize the need for less income to qualify for a loan. Using only numbers would the buyer be impressed by the fact that his/her annual income doesn’t have to be $ 100,000 but could be closer to $ 75,000 to qualify for a loan. You bet! Does it help you? You bet! A very critical point of contract negotiating strategy.
With a buy down strategy the second item that a buyer achieves is a reduction in monthly mortgage payments. Will this be important to the buyer? You bet! Depending on the loan amount buyers can realize $ 100 to $ 500 (or more) less in monthly mortgage payments. Will this impress your buyer? You bet!
And then they can be shown the overall savings in interest that they will achieve over time because of your recommended buy down of interest rate.
What do you get? You sell your home, at the price you want and have a happy buyer.
But you say “it costing me money.” Yes but its money that you would be giving up when you reduce your asking price (remember that 5% to 10% counter offer). You simply have channeled the funds to help you keep a buyer and today “a buyer” is worth more than gold.
