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Luring First-Time Buyers, Five Tips To Beat The Competition And Sell Your Home

 

June 15th, 2009

 

A federal tax credit of up to $8000 which expires at the end of 2009 is attracting many first-time home owners to purchase a home. This is great news for many home sellers. There is no clear indication whether the government will extend the $8000 tax credit incentive beyond 2009 although many believe that this will be an added benefit in battling the foreclosure ridden nation and nudging it into a rebound.

 

Owner occupied and well maintained homes will benefit traditional sellers as first-time home-buyers often imagine themselves living in one compared to a vacant foreclosed home. For practical and financial reasons, a well maintained owner-occupied home has great appeal for first-time home buyers. They are skeptical of buying homes that need further improvement according to Eric Mangan, a spokesman representing ForSaleByOwner.com

 

A broker poll for a Coldwell Banker survey last year revealed that affordability was the No.1 concern for first-time homebuyers. 81% said that move-in conditions were very important to these first-time homebuyers. 7% said that first-time homebuyers were looking to purchase fixer-upper homes they could buy affordably for renovation.

 

Many first-time homebuyers share this notion today as many lenders require larger down payments unless the mortgage is backed by the Federal Housing Association (FHA). Higher payments translate to buyers having less cash for renovation or improvements. Leslie Mackenzie of Coldwell Banker says that first-time homebuyers are doing what they can to save for the down payment and this generally depletes any extra funds they will have for repairs or renovations. She further concluded that they are concerned about out-of-pocket expenses once they take ownership of the home.

 

While poorly maintained foreclosure homes are a turn-off to potential first-time homebuyers, some banks will make improvements to their foreclosure stock by fixing them up so that they meet FHA standards and a buyer’s needs. These homes can add to the stiff competition for the rest of the for-sale inventory.

 

No fear. There are still ways to compete with other homes in the market. Assuming you have priced your home correctly, here are 5 incentives to lure a first-time buyer. Be aware that we are currently in a buyers-market and competition is fierce if you are in need of selling your home.

 

1. Maintain & Care

 

A home that has been well taken care off throughout the years should standout in contrast to a vacant foreclosed home. If it is owner occupied, the landscaping is not unattended. The warmth of the home can be very advantageous in selling the property.

 

In addition, a fresh coat of paint, de-cluttering and removal of unwanted odors can win you points in making a good first impression. Be cautious not to over-improve the home as the investment may not be worth the cost.

 

2. Mention to your potential buyer that you will help pay for closing costs

 

Whether this has already been mentioned in the brochure or listings, this can be a real motivator to luring potential buyers. Heather Joubran, a real-estate agent with Re/Max Central Realty in Lake Mary, Fla says that there is a good chance that buyers will ask for closing cost help. It may pay-off to be pro-active and offer it in the beginning.

 

If rising mortgage rates is making your buyer nervous, consider paying mortgage points to bring down the rate. But before doing this, find out the buyer’s timeline for staying in the home as paying down points only makes sense for those staying in the home for more than a few years.

 

3. Offer Home Warranty

 

Heather Joubran of Re/Max Central Realty in Lake Mary, Fla says that first-time buyers who are so used to renting naturally call the landlord whenever there is a household problem. To help them transition easily into homeownership, you can consider offering a warranty that will cover major systems should any problems arise.

 

4. Offer Mortgage Protection

 

For some, it may make sense to address the buyer’s fears by purchasing insurance so that the buyer will feel secure about their mortgage even if they lose their job. Coldwell Banker has such a program through its parent company, Realogy.

 

The program offers several months of mortgage payments if the new homeowner loses his or her job. Mackenzie says that there are people with secure jobs who are still nervous about getting laid off. This can give them a little more comfort in making their home purchase.

 

5. Don’t Snub Low Offers

 

Buyers are aware that prices have fallen off considerably in the current housing market. Understand where they are coming from even if they approach you with a low-ball offer. Try not to get personal.

 

According to Joubran, “Every offer deserves a counter offer”. At least counter them back as it gets the conversation going. She says that if they liked the home enough to make you an offer, there is a likely chance that you both may end up in a mutually agreed price.

 

 

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