Last-ditch ways to sell your home

How to entice buyers when listing languishes on market
By: Ilyce R. Glink: Inman News
At a party over the weekend, I meet a recently divorced homeowner who had received the house in his divorce settlement and was now trying to sell it.

The house has been on the market for seven months - which might as well be an eternity for a home seller. On the plus side, there have been more than 60 showings. Clearly, there's interest in the property - just not at the list price.

He said he was desperate to get rid of the house. What could he do to finally sell it?

When you've tried all the regular selling tricks, like cleaning your house, organizing it, and pricing it right, it's time to employ a few last-ditch efforts to pull in the right buyer:

    • Pay your buyer's closing costs. Houses are so expensive these days, thanks to
      an extraordinary run-up in prices, that a buyer may want to purchase your home
      but not have enough cash to close. Coughing up a few thousands dollars to help
      pay a buyer's closing costs is a good way to get to the closing table.


    • Buy down the buyer's mortgage. If the buyer can't easily manage the monthly
      mortgage payments on your home after purchasing it, you may want to buy down
      the buyer's mortgage. You pay the difference between what the buyer would have
      paid with a market-rate loan in the first few years and an interest rate that
      is lower. For example, in the first year of a buy-down loan, if the going
      interest rate on a 30-year mortgage is 6.5 percent, you might buy down the
      buyer' s loan so it appears to be 5.5 percent. The second year, the loan
      carries an interest rate of 5.75 percent (instead of 6.5 percent). The third
      year, the loan rate rises to 6 percent, and so on until you reach what should
      have been the starting interest rate. You pay the difference between where the
      rate is and where it should be, which might run a several thousand dollars.


    • Offer seller financing. Buyers like seller financing because it's still
      cheaper and more convenient than going to a conventional lender. There are
      plenty of risks (chief amount them is that the homeowner might default on the
      loan), but if you're a desperate seller willing to do the required due
      diligence on a home buyer, it might be a good idea. Be sure to hire a real
      estate attorney to draft the loan documents.


    • Offer to solve a specific problem. Roseanne used to live in a three-unit condo
      building that only had two parking spaces. Every night, someone else had to
      park on the street, and parking was tough to find. The way she finally sold
      her unit was to offer to pay a year's worth of parking for the buyer who
      purchases your home. While it doesn't solve the problem for good, it could be
      just enough to seal the deal. If your homeowner's association is about to levy
      a special assessment, offer to pay part or all of the special assessment.


    • Offer freebies. What could make your property more attractive to a buyer? Try
      a freebie. Home sellers (and developers) are offering everything from gift
      certificates, free trips and free cars to a decorating allowance, meals at
      fancy restaurants, massages, etc. While these things cost money, they might
      draw some extra attention to your property.


    • Offer a Bonus to the Broker Who Brings the Buyer. Real estate commissions are
      usually split equally between the buyer's agent and the seller's agent. So if
      the total commission you pay is 5 percent, each side would get 2.5 percent of
      the sales price (which is then further split between each agent and the firms
      they work for). If you hire a discount broker, a 4 percent total commission
      might be split differently, with 2.5 percent to 3 percent going to the buyer's
      agent and just 1 percent to the listing agent.

But if your house isn't selling, you may want to offer a bonus to the agent who brings the buyer to the closing table. How much should you offer? It could be a bigger commission (4 percent to the buyer's agent instead of 3 percent) or it could be a flat cash bonus of $500 to $2,000, depending on the price of your home.

While no self-respecting agent will force his or her buyer to purchase your property just because of the bonus, most agents will make sure any client they have who might be right for your property gets in to see it.