5 Ways to Sweeten a Home Sale

sweeten saleHaggling has become the norm in real estate transactions. And while price may be the brass ring we all try to grab, there are often lesser "prizes" within our reach that ultimately can amount to substantial amounts of money.

Here are some things to consider in your negotiations besides the sales price you settle on:

1. Seller financing

Chances are you aren't one of those investor-buyers who will be paying cash. You need a loan to finance this purchase. With lenders being essentially unwilling to part with money these days and setting the bar too high for many credit-worthy borrowers, there is a huge value for a buyer to have a seller willing to hold a loan. It could actually mean the difference between homeownership or not.

Having the seller hold paper on the loan will save the buyer traditional loan closing costs, which can include points on the loan -- usually 1 percent of the loan amount -- and the cost of an appraisal. Seller-financing is usually offered at slightly higher than the going rate and is traditionally capped at a few years, at which time the buyer will need to find financing in the open market.

For sellers who own their homes outright, financing the sale of their homes privately has several risks -- but some advantages as well. Many times, getting a regular monthly payment is actually financially preferable to paying capital gains taxes on a sale that deposits one fat check in their savings account.

What protection does the seller have if the buyer defaults? For one, they can -- and should -- insist on a substantial down payment that is theirs to keep. And should the buyer stop making house payments, the seller would get his house back, same as the bank would. Since the foreclosure and eviction process is cumbersome and time-consuming, seller-financing is a gamble. Follow the banks' lead here and vet the buyer thoroughly. You might even require the buyer to take out insurance in the event that he loses his job or becomes unable to work because of illness.

2. Flexible closing date

Not having to move before you are ready to -- say you'd like to wait until your kids finish the school year -- has monetary value. Do you really want to rent a place for three months so that they can graduate with their friends and, essentially, you have to pack and move twice? Moving is expensive. You have to turn on utilities, leave deposits, find a short-term rental, store your furniture; it all adds up. Having an understanding buyer who is in a position to delay closing or agree to rent the home back to you for a few months is a reason to rejoice.

3. Agent commissions

This is the taboo topic. When you sign a listing agreement, you legally agreed to pay a certain percentage of the sales price to the agents who listed and sold your home. Then along comes an offer that is less than what you hoped for -- less than your listing agent told you that you could expect.

Should you ask your agent to reduce his or her commission, to take less to keep the deal together? Isn't 2 percent of $500,000 better than 3 percent of nothing, which is what he or she will get if you don't agree to the lower offer?

Opinions are split on the topic. Some believe that smart agents would rather take less and make the deal work than watch the deal fall apart. Others believe that commission-cutting (technically speaking, they give you a credit back at closing) is a bad precedent and will have no part of it.

We can tell you this: People ask all the time when they get a low offer. Some agents agree and others don't.

4. Trades/bonus gifts as part of the sale

My camel for your bag of spices and some silk? Some see adding unrelated items into the negotiations pot as just muddying the deal. There was a great story line in last season's "Million Dollar Listing" on Bravo where agent Madison Hildebrand's buyer wanted the seller's rare sports car included in the purchase price. Ultimately, it was a deal-breaker.

Buyers have a legitimate right to ask for items that are built-in and/or even custom-made for the house. Draperies, window-treatments, outdoor kitchen appliances are all fair game. Sports cars? A gray area at best.

But there are circumstances in which some deals need to be sweetened. Sellers have been known to offer a week's vacation in Hawaii to the buyer at the close of escrow. Other sellers throw in a time-share ownership (that they also wanted to unload) and even a brand-new car. Think about it: A house is selling for $500,000 and the seller will walk away with $300,000 in escrow. What's the big deal, throwing in a $5,000 trip to New York?

It behooves the agents involved to be a little creative and see what can make things more palatable. For any deal to be successful, both sides need to feel satisfied.

5. Furnishings included

Whether you are moving up or downsizing your home, chances are you don't want or need all your stuff. Don't list your house as being sold furnished because the commissions paid to the agents will be based on your final sales price -- no need to jack it up artificially. But do consider asking a buyer to purchase your stuff outside the escrow process.

Moving is expensive, especially if you don't want the furniture and it won't work in your new home.

Some things are, however, negotiable. Will you be leaving your washer and dryer? To replace them in your next home can cost about $1,500. What about that riding lawn mower and all your garden tools? You won't need them in your new condominium, so why not offer them to the buyer?

Also see: Homebuyers: 3 'Weasel' Contingencies a Contract Needs

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