Offering an incentive, like paying closing costs, or buying down an interest rate, can have a dramatic effect on making a sale work. For instance, if a home is listed at $450,000, and you're (as the agent) recommending a reduction of $20,000 to help 'position' the home, the seller would be better off in several ways offering a 'concession' to a buyer. One is to pay the closing costs. Typical closing costs (in this price range in the NJ market) shouldn't exceed $10,000. If a buyer is 'short' cash to make a purchase, they may come closer to asking price if they know their costs are covered. The difference in mortgage payment is negligable. A second way is to have the seller pay 1 or 2 points toward a permanent 'buydown' of the buyers' interest rate. In some cases, the lower payment, and permanent reduction in payment, helps the borrower feel more comfortable paying the higher sales price for the home.
In both scenarios, the benefits to the buyer(s) are obvious. However, there are also benefits to the seller, besides getting the home sold. Paying closing costs or points may be tax deducitible as an expense of selling the home, reducing the tax basis of the sale (benefiting the seller). Further (and if I'm mistaken please let me know), if the seller pays the buyers' points, not only is that an expense for them on the sale of their home, but I believe the buyers can also deduct those points, since they were technically 'paid' as part of the purchase price of the home (I know someone's going to check me on that).
Having worked with Realtors almost my entire career, I hear all the 'stuff' they bring back to the office in terms of opinions, and excuses. Take my advice...do something out of the ordinary, and put that information into the MLS so EVERYONE can see it!
Mortgage Finance Consultant
SunQuest Funding LLC
Wouldn't you think that if a buyer is not interested in a property, with or without a lawn-guy or a cleaning service for a year, they're still not going to like the property itself. So, would it really make a difference in putting the incentive out there? I'd like to think so but I really don't know...
Today's serious buyers are looking for value. The best thing we as agents can do is try to accomodate them by pricing accurately.