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When selling a home, there are many different tactics that may be employed to expedite the process. Many sellers who list their home for several months, but receive no contracts may erroneously believe that asking a lower price for the home will be the only way to speed up the sale. While a lower sales price may lead to more potential purchasers, there are other areas of the sale, primarily concerning the terms of the purchase which may lead to a quick sale at the original asking price.
First consider the unsuccessful methods you have already employed in attempting to sell your home. If you have listed the home with a real estate agency, consider selling the home yourself when the agency contract runs out. Many purchasers look only for homes that are for sale by owner because they do not want to work with real estate agents. If you decide to list the home yourself, you may be able to reduce the asking price and without reducing the amount you will receive when the house sells. Real estate agents are typically paid between six and seven percent commission when they assist with the selling of a property. This is usually paid by the seller at the closing. If you list your home for sale by owner, you can reduce the price by the amount of commission that would have been charged by an agent and still receive the same amount when the property sells. This can allow you to attract a new group of potential purchasers.
If you do not want to reduce the price, consider mentioning favorable terms in advertisements you place. Many sellers may be willing to pay the full purchase price for the property if the terms are favorable. Other purchasers may not be able to afford the home unless the terms are favorable. You must be aware of your own personal financial situation when considering offering favorable terms.
One favorable term that may attract many prospective purchasers is offering to assist in financing the property. Many purchasers may not be able to secure enough financing to purchase your home for the price you are asking. By offering to assist in financing the property, you are assuming some risk, but you are also increasing your purchaser base. If you do not need a large amount of money in order to purchase a new home, you may offer to lend the purchaser part of the asking price. For example, if you are asking $200,000 for your home, you may offer to finance $30,000 of the price at 7% interest for five years. This means that the buyer will pay you $170,000 when he takes possession of the property and will make monthly payments to you for the next five years to pay the remainder of the price. This method allows a purchaser who can only secure $160,000 in financing to make a $10,000 down payment and buy your home. This also requires that you assume some risk, because the buyer may not be able to afford the payments for the next five years. To absorb some of this risk, you may wish to charge a higher interest rate than would be available from a bank. So, if the buyer borrows $160,000 from the bank at 5% for thirty years, you may wish to charge seven or eight percent on the $40,000 you agree to lend.
Another similar method which may expedite the selling of your home is to offer to finance the down payment for the buyer if he pays the full purchase price. Many purchasers may be able to obtain financing for your home, but may not have enough cash to make a down payment on the property. Lenders often require a borrower to make a down payment of between three and twenty percent in order obtain a loan. A purchaser, who wants to buy your home for $200,000, may only be able to obtain a loan for $180,000. If he does not have $20,000 cash, he will be unable to complete the purchase. By offering to finance the down payment for the purchaser, you agree to take $180,000 in cash at closing and take the remaining $20,000 in the form of monthly payments. Offering to finance the down payment expands your number of potential purchasers, and therefore increases the likelihood that you will quickly sell your home for the full asking price.
Another term you might consider to expedite the selling of your home is a lease option. This a more risky proposition than offering to assist in financing because there is the possibility that the home will not sell when the lease expires. When offering the home for lease option, you offer to rent the property to a potential buyer and allow them to have the option to buy the home at the end of a specified period of time. This form of contract effectively makes the seller a landlord for the period of the lease. The seller should draft the agreement to protect himself when offering a lease option. The contract should provide for a monthly payment that is higher than a mortgage for the property would be, the seller should require a non-refundable down payment, and should require the tenant to maintain the property. This form of financing allows a buyer who may not be able to secure an adequate loan to live in the property and make payments toward the total price while attempting to secure financing. Lease options are beneficial to the seller as well, because the seller gets a down payment up front from the property and receives monthly payments for the term of the lease. The seller is not responsible for repairing damages to the property, and reserves the right to take legal action if the buyer does not adequately maintain the property. If the buyer decides not to purchase the property at the end of the lease, the seller takes back full possession of the property and owes the buyer no refund. The property has probably appreciated in value, and the owner can then again list the property for sale. This financing option will probably not be advantageous if you need a large amount of cash to purchase a new home.
These are simply a few of the techniques which may allow you to sell your home without reducing the asking price. There are numerous other negotiable terms which you may advertise that will increase the attractiveness of your home. You may offer to leave all of the appliances in the home or pay all of the closing costs in order to attract prospective buyers. The key to selling your home quickly without reducing the sales price is to offer terms that will make the purchase available and attractive to the largest number of potential buyers. |
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