- The Washington Times - Thursday, August 25, 2005

If you find yourself with a house on the market that’s just not moving, several strategies can be put in place to speed the sale.

Psychologically, the seller first has to prepare himself for selling the house — not for marketing it, not for holding out for a higher price, not for defending the price, not for blaming the agent for not doing enough, but for selling it.

Granted, marketing and pricing are important, and you do want a professional agent with a viable marketing plan to draw as many buyers as possible.

Yet, as with any other commodity, marketing that brings a lot of buyers is good. More buyers means more potential offers. The seller needs to hire an agent and company that will create such an environment.

Let’s say you have done that. You even have fixed up the house better than anyone else on the block, but it’s just not moving.

You must switch from selling the product to selling the deal.

We see this strategy in plenty of other sales. The auto industry is famous for it — 0 percent financing, $500 above invoice, employee discount price. None of these strategies has anything to do with the product. They all entice potential buyers with the deal.

The deal for real estate has everything to do with the buyer. Forget that you may still be in a seller’s market and that you are, therefore, in the driver’s seat. If your house is sitting on the market and you have to move in 45 days, you’re not in the driver’s seat so much anymore. Get off your haunches and get the job done.

You could drop the price. In reality, though, this doesn’t help the buyer as much as cash back at the settlement table.

For every $10,000 you drop on a loan at 6 percent, the buyers save just $60 per month in a mortgage payment. Is that enticing enough?

Think about it. The buyers are borrowing $250,000 — a quarter of a million dollars — and dropping the price by $10,000 reduces their principal and interest payment from $1,498 to $1,438. Is that move enough to get them excited?

Let’s turn that around and offer $7,500 — 3 percent of the loan amount — at a full-price contract and see what it does for the buyers. They could use it for closing costs. It could be a lot of money in their pockets. They could use it to make payments over the next several months. It represents more than five months’ worth of payments at $1,498 a month.

Isn’t that more beneficial than $60 per month?

If you dropped your price $10,000, it would take the buyers more than 10 years’ worth of monthly payments to gain the actual financial benefit of simply being handed $7,500 at the settlement table. Plus, you get to keep the remaining $2,500 for your own bottom line.

It’s like this: If you’re about to take a hit on the sale of your house, it might as well benefit someone, and the buyer who gets $7,500 at the table is going to get a lot more excited by the deal than the one who has seen the price dropped by $10,000 if he or she realizes that the savings represent a mere $60 per month.

Be sure to check with your mortgage professional to make sure the loan program your buyer is using will allow you to provide this much cash at closing.

One last thing: If you decide to market the deal, make it more appealing than merely saying, “Closing costs to buyer.”

How you say it can be just as important as what you’re saying. How does this sound? “No payments for 4 months,” “$7,500 back to decorate your house,” “Seller will pay off buyer’s debt (up to $7,500).”

Those are three ways of saying, “Closing costs to buyer.”

Which one gets you excited?

M. Anthony Carr has written about real estate since 1989. He is the author of “Real Estate Investing Made Simple.” Post questions at his Web log (https://commonsenserealestate.blogspot.com).


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