Creative Ways of Marketing Your Home: Seller Incentives

With inventory on the rise and the expiration of the homebuyer tax credit, sellers will have to be increasingly creative in coming up with ways to differentiate their home from the competition.

It's true that you can sell anything at the right price, but sometimes just lowering the asking price isn't necessarily the best tactic.

Imagine for a moment you have your Gywnedale townhome for sale and there are 5 other listings for sale in the neighborhood located in Upper Gywnedd Township just outside of Lansdale. All of the homes are fairly similar to yours- 3 bedrooms, 2 ½ baths, 1 car garage – and they're all asking between $310k and $315k – right in line with your price of $310k.

The comparables (homes in the neighborhood that have recently sold) are telling you that your asking price is in the ballpark of where it should be, but there just isn't that much activity.

One option would be to lower your asking price, perhaps to the $300k for your current price of $310k. At that price your home would be a steal compared to the other homes for sale in the neighborhood and would most likely get an offer before any of the other listings.

The other option is to get creative-- Offer an incentive to a buyer that creates a higher perception of value than what a simple price reduction would.

For example, you could advertise that with an acceptable agreement you'll buy a discount point to lower the buyer's interest rate or pay for the buyer's first year of property taxes and association fees.

In reality you're giving up a lot less than you would have with a $10,000 price reduction, but most buyers won't see it that way. Buyers will look at these incentives and think, "wow, I'm getting something for free with this house, I can't pass up this opportunity!" They won't even consider the actual value of the incentive.

Another good idea is to attach a deadline to be eligible for the incentive. Something like "for acceptable offers received by (30 days from now), seller will…" is fairly successful in planting a sense of urgency upon potential buyers.

It's important to remember that for incentives to be effective, that home has to be properly positioned in the market to begin with. A buyer won't care if you're giving them a free year's worth of taxes if your home is priced $25k above the competition.

Homes that are listed in the bottom third of the price range and are in the top third of condition amongst the competition are selling the quickest, but adding an incentive to a buyer can get you to the settlement table faster and with more money than the typical price reduction.